From News Service of Florida
Companies that provide loan modification services now must be licensed or face a fine under a law that kicked in on January 1 to further protect consumers from fraud when they refinance or renegotiate a loan.
Facing a rash of complaints from already cash-strapped consumers, lawmakers earlier this year made changes to the Florida Mortgage Brokerage and Lending Act, which regulates the industry, at a time when renegotiations, foreclosures and other loan modifications are at an all-time high.
Florida had licensed mortgage brokers and mortgage lenders, but did not regulate individuals who renegotiate terms for new and existing mortgages.
The law says individuals and companies may not provide loan modification services without an active license. The new law further enhances the Foreclosure Rescue Fraud Prevention Act, which prohibits individuals and businesses from collecting up-front fees for loan modification services related to foreclosures.
Specifically, the law prohibits the payment of upfront fees for loan modifications. It also requires that brokers meet minimum standards to ensure financial stability. Brokers whose licenses have been previously revoked would be barred from renegotiating loans. Violators would face fines of up to $25,000 per incident.