The problem, of course, is that very few loans are actually being modified. You can find lots of figures relating to how many people start loan modifications but those are not the numbers that count. The key point is not how many people start loan modification programs, it’s how many succeed with trial periods and then go on to keep their homes. The failure rate is enormous. The latest mortgage modification report from the federal government shows that the re-default rate for modified loans is nearly 60 percent (59.5%) after just six months.

Now the California state attorney, Jerry Brown, has come out with a new directive. It has ordered 386 mortgage foreclosure consultants to post $100,000 bonds and register with his office. Brown has also sent letters demanding that 27 loan consultants substantiate success claims made on the internet and in direct mail advertising.

At the same time, the state bar association has begun to crack down on attorneys who are nominally in the loan modification business. Here’s why: Under California law the ability to collect an up-front fee is limited — unless you’re an attorney. So, some loan modification operations appear to be run by law firms but are actually just fee-splitting operations where the attorney’s real job is to collect cash up-front rather than to provide case-by-case legal services.

California has the right idea — and other states should also start asking tough questions when it comes to loan modification claims.

Mortgage Modifications: California Says “Prove It” is a post from: Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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What is the advantage of this program? Each loan officer gets a unique license number. If they lose their license in one state they cannot start lending somewhere else because state officials will not issue them a new license number.

This license number has enormous potential. For instance, all mortgages could include a loan officer’s license number. This would make it easier to determine who is responsible for the origination of a given loan. If one loan officer has an unusual foreclosure level, then perhaps loans with that number will sell at a discount — or won’t be sold at all.

The registry program was created last year as part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “SAFE Act”). It’s the start of what in time will be tough, uniform licensing standards in all states — with no where to hide for loan officers who do subpar work.

Mortgages: 66,469 Loan Originators Now Registered is a post from: Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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The same logic applies to open house. Your broker will want to register you with the individual showing the property.

What Does It Mean To “Register” With A New Home Builder? is a post from: Refinance, Home Mortgage Loans & Rates, Home Equity Loan

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