In the state of New Jersey, you cannot offer loan modification services if you are not licensed to do so by the state. And it can cost a pretty penny if you attempt to work around this requirement. Just ask the seven unlicensed loan modification businesses now facing nearly $90,000 in penalties and restitution fees thanks to the state’s attorney general-led “crackdown on financial fraud schemes”. The companies promised to negotiate with the lenders holding distressed homeowners’ mortgages in exchange for the payment of up-front fees. In many states, this up-front charge alone constitutes fraud. In New Jersey, however, companies wishing to offer loan modification services must also be licensed by state department of banking and insurance. Since the seven companies in question were not licensed, they violated the state Consumer Fraud Act and must cease and desist from offering their services. New Jersey’s financial frauds unit – part of its consumer affairs division – recovered more than $2.2 million for New Jersey homeowners who “have been victimized be predatory mortgage practices and mortgage-related schemes,” said consumer affairs director Thomas Calcagni.
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