Friday, August 28, 2009

Florida Home Loan Modifications and Lawyers Draw Attention

Loan modification firms offering foreclosure defense services are under scrutiny, according to an August 23rd article in the Sun Sentinel.

Real estate lawyers have an established history of helping consumers who are facing mortgage foreclosure. In the past couple of years, some attorneys have been lured in-house by loan modification firms that are trying to skirt rules against collecting fees in advance of results.

The 2008 Foreclosure Rescue Act prohibits upfront fees for mortgage modification services, although legislators agreed that Florida lawyers doing foreclosure or modification work were exempt in some situations.

Consumer complaints are rising as loan modification firms fail to deliver as promised. Common issues include:

1. Work that should have been performed by attorneys was actually done by non-lawyers.
2. Loan modification firms collected money in advance for work that was never done.
3. Loan modification firms refused to issue refunds when requested.

From a legal marketing perspective, this means that real estate law firms need to take extra care to educate their clients about legal rights in foreclosures, and to set reasonable expectations for what will happen when in the loan modification process. It is actually a selling point for law firms to demonstrate why they are the right choice to assist consumers.

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