Earlier this week, Governor Schwarzenegger passed SB94, which prohibits any person from charging fees upfront in all matters concerning real estate loan modifications. For months now, many California homeowners, whose homes were under water, sought out the help of professionals, hoping to get their loans modified. Many times these professionals lacked the skills and knowledge to achieve these goals, but offered their services anyway. The individuals with problem mortgages also lacked the financial knowledge to deal with the banks directly, hence the hiring of a professional.
“Getting a home loan modified is a long and trying process,” according to Laurel Starks, host of the talk show REAL ESTATE MATTERS on KTIE AM. “The homeowner hired a professional, assuming that they know more than they do – which often times is not the case. Yes they may be attorneys or other certified individuals, but they do not have the specific knowledge these intense situations require.”
Thus, what ended up happening was not what the homeowners intended – the professionals hired merely took the upfront fees and the homeowners still ended up in foreclosure. The State of California, with the passing of SB94, has now attempted to put an end to that, hoping to give homeowners a break and still get their desired result.
Laurel Starks predicts a direr outcome. “Now, even attorneys who had the knowledge, have no financial incentive to perform these services. So the homeowner has nowhere to go, and foreclosures will only increase. These leaves the homeowners only one choice – to directly communicate with the banks – and if that worked out well, we would not have had the attorneys offer their services in the first place.”
Starks goes on to recommend hiring an attorney on a consulting basis – which is within the law – and use them to guide you through the process – instead of depending upon them to do it all for you. “You still need someone with negotiation skills and many times the homeowner ends up frustrated,” declares Starks.
Currently with Keller Williams Rancho Cucamonga, Starks knows foreclosures and short sales intimately because she is a Divorce Real Estate Specialist and exclusively works in divorce situations. Laurel also works as a Real Estate Consultant and advisor to divorcees and participates in co-mediations as the real estate expert. Laurel is often Court-appointed as the listing agent in divorce cases.
