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Sep. 30, 2009
Copyright © Las Vegas Review-Journal

New law for home loan consultants poses hurdle

None has met requirements for surety bonds

By JOHN G. EDWARDS
LAS VEGAS REVIEW-JOURNAL
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Nevada's emerging home mortgage modification industry is running into a big hurdle just as it starts to operate under a new law.

A new state law required home loan modification and foreclosure consultants to obtain licenses from the mortgage division. While 50 applications are being processed, none of the applicants has posted the required $75,000 surety bonds, according to the division.

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    • The deadline to post the bonds is Thursday, and anyone that continues operating without a bond could be fined.

    Those that have not already started the process to post a surety bond probably will miss the Thursday deadline, said Elisabeth Daniels, a spokesman for the Mortgage Lending Division.

    AAA Home Rescuers made arrangements to obtain the required bond on time for about $7,500, managing partner Mandy Peacock said.

    However, Peacock doubts many other mortgage modification and foreclosure consulting firms will meet the deadline.

    "Many people weren't aware of the deadline," she said. "This whole process, because it's brand new, hasn't been clear on deadlines and guidelines."

    Mortgage Division Commissioner Joseph Waltuch in a statement said the division has reminded the industry about the bonding requirement at least three times.

    "Our goal is to do all we can to help businesses meet their legal obligations and at the same time ensure that Nevadans receive the services to which they are properly entitled," Waltuch said.

    The state requires the bonds so that consumers have additional sources of compensation if a broker, mortgage modification or foreclosure consultant violates the law and causes them damages.

    Peacock said some competitors wrongly think the bonds they posted to operate as consumer credit counselors would allow them to operate as mortgage modification counselors, too. In addition, the division has 326 licensed mortgage brokers that are required to post bonds by Thursday.

    These include businesses that originate home mortgage loans for consumers and also hard-money lenders, who solicit investor money to make short-term loans to developers and others with real estate collateral.

    The division has received bonds from six mortgage brokers plus another 12 bonds that have deficiencies. Mortgage brokers must obtain $50,000 bonds for their principal office plus $25,000 for one or more branches.

    The typical $50,000 bond for a mortgage broker costs $3,500 to $7,000, leading some to wonder whether many brokers will allow their licenses to lapse.

    Vestin Mortgage, one of Las Vegas' larger hard-money lenders, is obtaining a new bond, spokesman Steve Stern said.

    "I do not believe that (the bond requirement) will have that much effect on mortgage brokers," Stern said.

    Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

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    Thomas wrote on November 05, 2009 12:14 PM: BEWARE OF HOME RETENTION CENTER of Las Vegas as shown below does not help homeowners. My family has been trying to salvage our home. We paid Home Retention Center $2300 and they are not assisting us in any way. They refuse to answer the phone, other than the receptionist. We leave several messages and they never return our calls. We paid them four months ago and we cannot even get through to them. We have also gone down there several times to just be told we have to call and make an appointment, but how can we do this if they do not return our calls. I feel as if we are at a total loss here.


    Roger wrote on October 06, 2009 08:03 AM: I must have called 20 modification companies, many of them seemed to be a little shady. luckly I finally called www.MortgageRefinancing.com they didn't do modifications but the guy there was very helpful and told me how to find a good company. It seems like there are a lot of terrible stories about some of these companies. I would recommend that you speak to someone in the industry that will be able to refer you to someone they trust.


    Heidi Watt wrote on October 01, 2009 01:32 PM: Home Retention Center, LLC HAS provided the required bond to the MLD and is in FULL compliance with the new and all existing laws governing the Loan Modification business.
    You may visit www.hrcnv.com for more information or contact the office 702-252-7400 for a free consultation. Se Habla Espanol
    Heidi Watt
    President, Home Retention Center


    Mac wrote on September 30, 2009 01:12 PM: "We're from the government. We're here to help!"

    Every law and regulation restricts the free market. Puts everyone in a straightjacket. Eventually no one can move. Everyone will be safe. But life as we know it will have ended.


    Ian Hirsch wrote on September 30, 2009 11:46 AM: Yesterday, Fortress Credit Services was granted our surety bond for $75000.00. We are the only licensed debt adjustment agency that has also applied for the Mortgage Modification licensing. We are also accredited by the Better Business Bureau, the only company in this field to have that standing.
    Visit www.fortresscreditservices.com and look at the video testimonials, you may be surprised what you see.
    Ian Hirsch
    702-363-7977


    Too_much_government wrote on September 30, 2009 07:56 AM: Here are the details of this new law. Notice how those "less government" Republican legislators *unanimously* voted YEA, and that the bill was signed by a Republican governor.