Home owners who fall behind on their mortgages will most likely be approached by people offering to help them save there homes from foreclosure by a loan modification program. In the past, these people didn’t have to be licensed by the state of Utah, they could just get a Notice of Default list from the recorders office and start contacting homeowners. a lot of home owners would get swindled out of their money and some got swindled out of their homes!

This year the Utah State Legislature requires anyone offering to help with a Loan Modification or Foreclosure Rescue Service be a Mortgage Licensee or hold a Utah Real Estate license. You can find the names of licensed Mortgage and Real Estate people at the Department of Commerce website.

The following are NOT allowed:

• Request or require a person to pay a fee before executing a written agreement defining the services you will provide.
• Require a person to forfeit the fee if the lender forecloses on the property within one year from the date on which you and your client execute the written agreement for services.
• Suggest to a person that you have a spe­cial relationship with his or her lender or loan servicer.
• Falsely represent or advertise that you are acting on behalf of a government agency, a lender or loan servicer, or a nonprofit or charitable institution.
• Recommend or participate in a foreclosure rescue that requires a person to transfer title to you or to a third party with whom you have a business relationship or finan­cial interest.
• Advise a person to make a mortgage pay­ment to anyone other than his or her loan servicer.
• Tell a person to refrain from contacting his or her lender, loan servicer, attorney, credit counselor, or housing counselor.
• Effective May 11, 2010, engage in fore­closure rescue or loan modification without offering in writing to the client a right to cancel the agreement within three business days after the day on which he or she enters the agreement.

Source: Utah Division of Real Estate First Quarter, 2010

A great video from Mortgage Success Source about how mortgage interest rates change. This complex issue is broken down to understandable bite size pieces.

If you are thinking about purchasing a new home and haven’t filled out your mortgage application prior to July 31st, 2009, you need to understand the new rules in the “Mortgage Disclosure Improvement Act” (MDIA), which is part of the “Truth in Lending Act” (TILA). There are mandatory waiting periods on disclosures for borrowers that must be met prior to collecting fees, setting closing dates and appraisal review periods. It is critical to meet these requirements so you won’t pass your settlement deadline and be in default!

Some good sources I found on this topic were Taylor Bean & Whitaker website, and Rain City Guide.

Read the MDIA in full here.