Warning Against False Claims of Expertise

The following is an excerpt from a memo published by the California Department of Real Estate

Consumer and Industry Warning: False and Misleading Designations and Claims of Special Expertise, Certifications and/or Credentials

By Wayne S. Bell
Chief Counsel --
California Department of Real Estate

The DRE has noticed an increase in the use of questionable and possibly misleading terms such as "expert", "certified", and "specialist" in the marketing and advertising of assistance to anxious homeowners in connection with their home loans and foreclosure rescue services and short sales A growing number of individuals and companies, many of whom are unlicensed, purport to be "experts" in the area of short sales, "certified" forensic loan auditors, short sale "specialists", loan modification "specialists", loss mitigation “experts”, “fraud investigators”, and the like, and many of these designations and claims seem to be nothing more than marketing ploys by unscrupulous fraudsters to capitalize on the desperation and vulnerability of unsophisticated and/or financially strapped homeowners.

The best advice to consumers is that you need to be wary and cautious when thinking about retaining the services of people or companies calling themselves "specialists", "experts", or "certified" in the areas of mortgages, lending, foreclosure rescue, and real estate.

Check out prior alerts and warnings of the DRE, and note that you are wise to never pay for such services in advance. In addition, you can do some of the advertised services yourself. In other cases, such as with forensic loan audits, there is a serious question about the value of such services. In still other cases, there are free services that might be available to you through HUD-certified housing counselors.

If you still choose to use the services of third parties for a fee(s), ask them questions, lots of questions, and then verify, verify, and verify some more. Check them out on the DRE website, at www.dre.ca.gov . If they are lawyers, check them out on the State Bar's website, at www.calbar.ca.gov . Check them out through the Better Business Bureau. Check them out through a Google search on the Internet.

The point here is that you need to view the claims of expertise, certification, and specialization with a critical eye, verify the claims, and ask specific, detailed questions.

Suggested Questions to Ask (This List is Not Exhaustive, But It Will Give You Good Information on Which You Can Make a Reasoned Decision)

1. How many transactions or services of the type you are advertising have you successfully performed? Ask them to give specifics and contacts.

2. Do you have a list of your last ten customers? If so, get it and call them. Do your own background check. And note that even if the person or company is "highly recommended" by so-called satisfied customers, the risk of a scam is not eliminated entirely.

3. Are you licensed by the California Department of Real Estate? If not, why not? What exemption from the licensing laws do you claim? If they are licensed, check to see if they have been disciplined by the Department (go to www.dre.ca.gov).

4. What qualifies you as an expert? How did you get that expertise?

5. You state that you are a specialist. What specialist qualifications do you have and what does that mean?

6. You say that you are certified. Who issued the certification? Do any government entities or recognized industry trade groups (such as the California Association of Realtors and the National Association of Realtors) recognize the certification? If so, which ones? Then you can and should verify that information.

7. What course of study did you undertake to become certified or specialized?

8. What are the requirements for certification or specialization?

9. How many hours of coursework were involved?

10. What professional organization gave you the designation or certification? And when were they formed? If they give you a name, check out that entity with the California Secretary of State, Better Business Bureaus, with the California Association of Realtors, and see if any complaints are noted through a Google search.

11. When did you get the designation?

12. Did you take an examination? If so, who conducted the test, how long was the examination, and when did you take the examination?

CalHFA Announces Full Implementation of $2 Billion Effort

SACRAMENTO – The California Housing Finance Agency today announced the full implementation of four programs to fight the ongoing foreclosure crisis in California, with the primary goal to help families remain in their homes.

The programs, under the umbrella title of Keep Your Home California, are federally funded as part of the U.S. Treasury Department’s Hardest Hit fund, and are aimed at helping low and moderate income homeowners struggling to pay their mortgages amid the worst real estate crisis in decades.

“Our goal is to get the very most out of these federal dollars to assist California families,” said Steven Spears, Executive Director of CalHFA. “With families struggling through a number of financial hardships and the disruption in the real estate market, these programs will help those in need while stabilizing neighborhoods and communities severely impacted by foreclosures.”

California received a total of nearly $2 billion through the Hardest Hit fund. After consulting with community leaders throughout the state, four programs were created to assist California families.

Mr. Spears said that all four programs are intended to help avoid foreclosure: three offer several forms of mortgage assistance, as well as a separate program that will provide transition assistance to borrowers who execute a short sale or deed in lieu transaction.

All of the programs are designed specifically for low or moderate income homeowners who are either unemployed or are facing another financial hardship, have fallen behind on their mortgages and owe significantly more than the value of their homes.

“In partnership with the federal government, Keep Your Home California is one more step we are taking to help low and moderate income California families who are struggling to remain in their homes,” said Assemblymember Norma Torres, Chair of Assembly Committee on Housing and Community Development. “No one program will solve the foreclosure crisis affecting our state, but together we hope to make a difference for as many families as possible.”

"The foreclosure crisis continues to hinder our potential for economic recovery, and strips stability from our communities,” said Assemblymember Mike Eng, Chair of the Assembly Committee on Banking and Finance. “I'm pleased that the Keep Home California program is ramping up to address these challenges and, as the program moves forward, I will continue to monitor its progress to ensure that it's an all around success at assisting California borrowers."

Specifically, the Keep Your Home California programs provide:

• Mortgage assistance of up to $3,000 per month for unemployed homeowners who are in
imminent danger of defaulting on their home loans.
• Funds to help homeowners who have fallen behind on their mortgage payments due to a
temporary change in a household circumstance. The program will provide up to $15,000
per household to reinstate mortgages to prevent foreclosures.
• Money to reduce the principal owed on a mortgage for a home where the low or
moderate income homeowner is facing a serious financial hardship and owes
significantly more than the home is worth. The program requires lenders to match any
assistance provided by the Keep Your Home California program.

A full description of the programs can be found at www.KeepYourHomeCalifornia.org

How to Apply:

The programs will be limited to homeowners who meet a number of criteria, including owning and occupying the home as their primary residence, meeting income limits and facing a financial hardship. Homeowners who consummated a “cash-out” refinance are not eligible for Keep Your Home California programs.

To apply for the assistance, a homeowner should contact the Keep Your Home California call center toll-free at 888.954.KEEP(5337) or their mortgage servicer – the company to which the borrower sends monthly mortgage payments. Each of the mortgage assistance programs requires the participation of the mortgage servicer.

As of February 9, the following servicers are participating in all four Keep Your Home California programs:

 GMAC
 Guild Mortgage
 California Housing Finance Agency
 California Department of Veterans Affairs

Other servicers, including Bank of America, JPMorgan Chase, CitiMortgage and Wells Fargo are currently participating in some, but not all programs at this time. The list of participating servicers is expected to expand in the coming weeks.

Full details regarding servicer participation can be found at www.KeepYourHomeCalifornia.org.

“The problems of unemployment and the unprecedented disruption in our real estate markets have impacted so many families,” Mr. Spears said. “These programs are designed to move homeowners who have been told ‘no’ into the ‘yes’ category and qualify them for a mortgage they can afford over the long term.”

Borrowers with questions about the program may call Keep Your Home California toll-free at 888-954-KEEP(5337).

Wells Fargo Agrees to Modify California Mortgages

San Francisco Business Times - by John Sailors

Wells Fargo & Co. said Monday it will make up to $2.4 billion in mortgage modifications for homeowners in California with "pick-a-payment" adjustable-rate loans, as pat of an agreement with Attorney General Jerry Brown.

San Francisco-based Wells Fargo (NYSE: WFC) also agreed to pay $32 million to borrowers who lost their homes through foreclosure.

The loans were issued by Wachovia Corp. and Golden West Financial Corp. Wells bought Wachovia after that bank bought Oakland-based Golden West Financial Corp. for $24 billion in October 2006.

The majority of the more than 50,000 at-risk Wachovia Pick-a-Payment customers are in California, Wells said.

Wells will offer loan modifications to nearly 15,000 California borrowers with the loans.

Many of the modifications will include “significant principal forgiveness.”

California joins nine other states in entering agreements with Wells Fargo. The others are Arizona, Colorado, Kansas, Florida, Illinois, Nevada, New Jersey, Texas and Washington.