1/14/2011 10:30 AM (PST)

Are they asking for any fees upfront? The BBB found that this was the case with this company in the past. Effective October, 2009 in California, it is illegal to collect any fees, regardless of the form, for negotiating or attempting to negotiate a loan modification for a residential mortgage. All modification services must be fully completed before any money can be collected. It is also illegal to divide fees or services into components for the purpose of avoiding this law. HUD approved housing counseling agencies are exempt from this law.

Several other states have enacted similar laws. Also, the FTC enacted a new rule that goes into effect on January 31st that prohibits advance fees too - and that will apply everywhere in the country.

If you are having trouble making your mortgage payments we would recommend that you first seek a loan modification through a HUD approved non-profit housing counselor ASAP. Call 888-995-4673 to speak with a HUD certified housing counseling agency. They can evaluate your housing options, open lines of communication with mortgage lenders, negotiate a loan modification, and help you with household budgeting, all at no cost.

Be prepared to provide to your lender a letter explaining the reasons for your mortgage default or financial hardship, proof of current income, itemized monthly expenses, prior 2 years tax returns*, a copy of a recent utility bill as proof of residence and proof of paid property taxes and homeowners insurance (if not escrowed with your monthly payment). After 3 months of steady payments and more verifications, you hopefully will be approved into a permanent loan modification. See the article below on special assistance programs launching soon in CA for distressed homeowners.

Loan Modification, Unemployment and Renter Assistance Programs in CA, FL, MI, AZ, and NV:
http://www.facebook.com/home.php#!/notes/bbb-of-the-southland/loan-modification-unemployment-and-renter-assistance-programs-in-ca-fl-mi-az-and/10150105550677195

I've heard that the CA loan mod assistance program will launch Feb 1st. The unemployment assistance program already launched this week. For details, see www.keepyourhomecalifornia.org