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Real Estate Litigation


Q. What should I do if someone approaches me while my home is in foreclosure and tells me that they can immediately stop the foreclosure?

A. If this person is not an Attorney, or the lender communicating directly with you negotiating a loan modification, California Law defines this person who approached you as a “foreclosure consultant.”

A foreclosure consultant is person who represents they will:

  1. Stop or postpone the foreclosure sale;
  2. Obtain any forbearance from any beneficiary or mortgage company;
  3. Assist the owner to exercise the right of reinstatement;
  4. obtain an extension of time for the period in which the owner may reinstate his or her obligation;
  5. obtain any waiver of an acceleration clause contained in any promissory note or contract secured by a deed of trust;
  6. assist the owner to obtain a loan or advance of funds;
  7. avoid or ameliorate the impairment of the owner’s credit resulting from the recording of a notice of default;
  8. save the owner’s residence from foreclosure;
  9. assist the owner in obtaining the remaining proceeds from the foreclosure sale.

(1) Make sure you obtain a contract from this person aka “foreclosure consultant” that complies with Civil Code § 2945.3 which requires the foreclosure consultant to provide you with the exact nature of the service and the total amount and terms of compensation.

  1. A foreclosure consultant can not lawfully charge you money in advances for services that have not been performed through completion. See Civil Code § 2945.3(c)(1).
  2. A foreclosure consultant can not lawfully ask you to sign any lien, deed of trust, or deed. See Civil Code § 2945.3(c)(2).
  3. A foreclosure consultant MUST provide you with a 3 Day Notice of Cancellation, very conspicuously (10-pt font, attached to the copy of the contract).

(2) After 65 Days following the foreclosure, if the foreclosure consultant offers, and may lawfully offer to assist the owner in obtaining the surplus proceeds, the foreclosure consultant MUST prepare and deliver a “NOTICE TO OWNER” in 14 pt font alerting the owner that:

You may be entitled to receive all or a portion of the surplus funds generated from the foreclosure sale of your real property located at: _____________ on ________ without paying any fees or costs of any kind to a third party. You should check directly with the trustee or beneficiary who conducted the foreclosure sale of you property to determine the name and address and telephone number of the party to whom who you can direct inquiries regarding filing a claim for surplus funds without paying a fee to a third party. No person or entity may require you to enter into any agreement regarding the payment of a fee to that person or entity in order to receive any surplus funds from the foreclosure sale to which you may be entitled during the 65 days after the date of the trustee’s sale.

Q. Can a foreclosure consultant charge me money for the service of stopping the foreclosure or for the services he or she represented they could perform?

A. No. A foreclosure can not charge you money or any kind of compensation up front for their services BEFORE it has been fully performed. Once the foreclosure consultant has fully performed, then they may charge you money, but not more than ten percent of any loan the foreclosure consultant may make to the owner.

Q. Can a foreclosure consultant take a wage assignment, or a lien of any type to secure the payment of compensation?

A. No. Absolutely not, and not under any circumstances may a consultant take any secured interest against your real or personal property. There are no exceptions to the rule that a foreclosure consultant SHALL NOT take any security interest in the property. See Civil Code § 2945.4(c).

Q. What should I do if I have already signed a grant deed or liens against my home to pay the foreclosure consultant?

A.Call our offices immediately to speak with a qualified attorney who can help you. The fact that you signed the grant deed or lien against your home DOES NOT make it valid and enforceable against you. California law specifically provides that “any acquired interest” shall be voidable, unless a bona fide purchaser, without knowledge that your property was a “residential property in foreclosure” obtains an interest. Seldom is this the case. People usually know what they are doing and why they are getting such a “great deal” against your interests.

(1) We will quiet title against the consultant for whom you have given a VOIDABLE AND UNENFORCEABLE GRANT DEED. In addition, we will get a Judgment for actual damages, reasonable attorney’s fees and costs and appropriate equitable relief for you. We will also sue under the Civil Code § 2945 et seq. for the foreclosure consultant’s multiple violations of the statutory protections for homeowners in distress. Call Tamara Benefield now and get the protection you need and deserve under California Law.