SB 94 Loopholes for Loan Modification Companies: What Homeowners Should Know

The response to SB 94 from the loan modification industry, including attorneys, was that of outrage. Some attorneys threatened to sue the state. Other attorneys banded together to come up with their own ways of operating within the law that they felt was acceptable; but these options are sometimes questionable with regards to compliance.

Attorneys, brokers and loan modification companies are desperately searching for a loophole in SB 94 so they can continue to operate.

Why Loopholes?

Loopholes are a funny thing. Loopholes can be used for good or for bad. According to Wikipedia, a loophole in a law often breaches the intent of the law without technically breaking it.

When you scour the Internet, including several blogs online, you’ll notice a lot of talk amongst those in the business of loan modification who are searching for loopholes in SB 94. I noticed several discussions just today.

In order to continue to profit, some loan mod professionals are suggesting they charge for other services during the loan mod process, and then collect the remainder of the balance at the end of the modification, or use trust accounts to ensure services are paid for.

Some companies have good intentions with finding loopholes because they wish to continue to serve homeowners in need, but that’s not always the case. If we can determine why certain companies are searching for a loophole, perhaps we can uncover their true intention. But determining intent is neither an easy nor fair task for the borrower to undertake. The last thing a homeowner in distress needs is to have to psychoanalyze a business.

We Empower Homeowners Through Education

We at The Homeowner Defense Network (The HDN) aren’t looking for any loopholes nor do we plan to. This is because it’s business as usual for us and our clients. We have been operating and educating distressed borrowers for years.

Yesterday, today and tomorrow, our premier service offering, the Loan Modification Do-It-Yourself program, will still be making the loan mod process simple and educational for homeowners, empowering them in California and across the nation.

We aim to save our clients money — potentially thousands of dollars — not just on loan modification assistance but also on the home loan itself. More importantly, we save homeowners from companies that operate under questionable loopholes. And ultimately, we keep people in their homes.

Contact us today to learn how The HDN can benefit your home loan.