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March 28
1934 - Bouquet Canyon Reservoir, replacement for ill-fated St. Francis Dam & reservoir, begins to fill with water [story]
Bouquet Reservoir


Commentary by Carl Kanowsky, Esq.
| Friday, Apr 12, 2013
Carl Kanowsky, Esq.

Carl Kanowsky, Esq.

Unfortunately, too many people are still facing possible foreclosure on their homes. If the number of calls to my office is any indication, this trend is not likely to end soon.

Perhaps even more unfortunate are the vultures who are trying to take advantage of homeowners who find themselves in this unwelcome position.

What follows is a common scenario.

Jack and Jill own a home. Back in 2007, it was worth $500,000 — quite a jump from what they paid for it, which was $375,000. They had a mortgage of $300,000. On paper, they had $200,000 in equity.

It was money they needed for the kids’ education, to fund home repairs and to pay for a dream vacation. The couple refinanced their mortgage without any paperwork, borrowing a total of $450,000. By refinancing, not only were they able to do things they had once only dreamed of, their home-loan payment was reduced because of the teaser starter-rate they got.

But the economy tanked, property values plummeted and Jack lost his job. On top of all of this, the monthly payments began adjusting higher all the time. What had seemed like an answer to a prayer was now an albatross around Jack’s and Jill’s collective neck.

They couldn’t afford the payments, they couldn’t refinance because the home was now worth only $350,000, and they didn’t want to walk away from their home.

After all, they had spent tens of thousands of dollars between both their down payment and the monthly payments. On top of that, they had no savings, and they couldn’t afford to move. Finally, they knew that a foreclosure would be a horrible blemish on their credit report for years to come.

The couple tried to contact the bank holding the note, but all they got in reply were empty promises and never-ending demands for more paperwork.

Eventually, the bank stopped playing the game and simply sent the couple a notice of default. The bank was going to foreclose despite everything Jack and Jill had tried.

Desperate, they listened to ads on the radio by foreclosure consultants, including some attorneys who promised the world. Jill called some of the experts, who all said they could stop the foreclosure.

Most required an up-front payment of $2,000 to $4,000. Many said no contract was necessary. Understandably, Jack and Jill were confused, and thus easy prey for unscrupulous “consultants” who simply took the couple’s money and accomplished nothing on their behalf.

Jack and Jill didn’t know that such practices are illegal.

As the state bar reported: “To protect distressed homeowners, the Legislature has imposed numerous restrictions on foreclosure consultants.

“For example, agreements with foreclosure consultants must be in writing and contain specific disclosures. Also, foreclosure consultants are prohibited from collecting a fee for any services until after the services have been fully performed. In addition, distressed homeowners have a right in certain circumstances to rescind foreclosure consultant agreements. These protections cannot be waived.”

Also, a foreclosure consultant cannot request or require that the borrower sign any lien or deed of trust.

Legitimate consultants are registered with the Justice Department. They’re bonded, cannot have any felony convictions and must have their advertising approved by the Justice Department. Anyone who violates the law is subject to both civil and criminal penalties of up to $10,000 per occurrence and one year in jail.

Attorneys have similar prohibitions against unethical foreclosure consultant practices.

Lawyers can’t get money up front. They can’t pay referral fees or split fees with referring agencies. They can’t set up sham agencies where it looks like the lawyer is providing the service when actually the bulk of it is done by non-lawyers. They must provide the client with a written retainer agreement.

Probably the easiest way to avoid being ripped off is for homeowners to go to agencies financed by the Federal Housing and Urban Development Department.

These agencies don’t charge for their services. You can get a list of them by going clicking [here]. Why pay when you can get the help for free?

 

Carl Kanowsky is an attorney in Santa Clarita. He can be reached at cjk@kanowskylaw.com. Visit him online at www.kanowskylaw.com.

 

 

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