Only licensed mortgage brokers may provide home loan modifications
in Colorado under the new Mortgage Broker Licensing Law, the Colorado
Division of Real Estate reminded consumers on Wednesday.
The reminder came because of the increased number of complaints the division has received about loan modification companies.
"Any person offering to assist troubled borrowers by modifying the
borrower's mortgage terms or conditions must be licensed as a mortgage
broker in Colorado. Those operating without a license face steep fines
and penalties for noncompliance," said Cary Whitaker, Mortgage Broker
Program manager.
The real estate division intends to step up investigations into
loan-modification companies as consumers continue to complain about
high fees and low results.
These newly formed companies appear to have sprung up in response to
the increased demand for solutions to the foreclosure crisis.
"Borrowers need to be cautious before spending money on these services.
Nonprofit HUD-approved housing counseling agencies are available to
provide loan-modification assistance or foreclosure- prevention
education, usually at no charge," said Erin Toll, director of the
Colorado Division of Real Estate. Consumers can check the license
status of mortgage professionals online at dora.state.co.us/real-estate
or at 303-894-2166.