Two weeks ago, two managing members of AAA Home Rescuers, LLC. went up to Carson City to become unpaid lobbyists in order to push some type of remedy for the epidemic that has swept over our industry.  The epidemic is that this industry is GROSSLY under regulated and in desperate need of some Rescue Rangering. 

As we are extremely passionate about changing the future of this industry and the future for distressed homeowners, we learned very quickly.  Here is the list of people they talked to:

-          Policy Maker Dick Cooper

-          Majority Leader of the Senate Horsford

-           Commissioner of the Consumer Affairs Division Sharon Jackson

-          Majority Leader of the Assembly John Oceguera

-          Senator Copening

-          Director of the Department of Business and Industry Diane Cornwall

-          Senator Parks

-          Minority Floor Leader of the Senate Raggio

-          President Pro Tempore of the Senate Schneider

-           Chairwoman of the Commerce and Labor Committee Senator Carlton

-          Assemblyman John Hambrick

-          Former Chief of Police in Henderson and former Majority Leader and Speaker of the Assembly, Richard Perkins

-          Assistant Majority Floor Leader Assemblyman Conklin (AUTHOR OF BILL AB 152)

-          Speaker of the Assembly Barbara Buckley

-          Senator Amodei

-          Senator Hardy

-          Senator Rhoads

-          Committee Chairwoman Carlton

-          Commissioner of the Mortgage Lending Division Joseph Waltuch

-          Minority Whip of the Assembly Chad Christensen

This is simply the people that were talked to.  This blog would be five pages long if we included all of the conversations that were had with these people.  These conversations set the groundwork for this last Monday (April 27^th), the hearing for the senate Committee of Commerce and Labor. 

At this hearing, different bills were heard and testified on, including the one pertaining to our industry, AB 152.  The pertinent issues that Mandy addressed in the bill were these:

·         Any person who performs loan modification services must be licensed pursuant to chapter 645B of NRS.  Any person wishing to perform these services must meet the requirements of those who originate loans

§  WHY THIS NEEDS AMENDING:  Right now the current regulations say that no one who holds a license (mainly loan officers) may not act in the same scope of that license and do modifications (NRS 645).  It is also later stated in this very same bill!  So it seems extremely contradictory to put the licensing for the loan modification industry under that of loan officers.  A lot of the reason why people are in situations like these with loan fraud, etc. is because of predatory lending on behalf of loan officers!  We’re not saying they’re all bad of course, it just seems like a “duh” statement.

·         Any attorney wishing to practice loan modification or foreclosure consulting in affiliation with one of these licensed companies must comply with these statutes.

§  We think this is great!  That would eliminate the “we’re all attorney” scams…US Justice Foundation?  The only issue there would be is that attorneys still doing modifications without the affiliation of a licensed company (unnamed personal injury attorney in Las Vegas…among others) are simply regulated by the bar.  So basically not really regulated.

·         People and companies who are sponsored by a state or local government program such as the Department of Housing and Urban Development (HUD) will be exempt from the licensing.

§  WHY THIS NEEDS AMENDING: uuuhhh, WHY are they exempt?  What education do they have AND what incentive (being a non-profit organization) do they have to get educated???  These companies are the ones who homeowners go to FIRST!  They have the most need for education and regulation!  We had a client that had been with one of these non-profit companies for 6 months when he came to us.  He had gotten absolutely no results.  Within 12 days (12 d-a-y-s!) we had gotten him a loan modification that was $200 LESS than he had contracted us to get.  Now 12 days is not typical, just so you know.  It’s just to illustrate the fact that this was an extremely simple file with an easy bank.  Why did the nonprofit not get anything done in 6 months?  Maybe because they didn’t know how to???

·         One section discusses loan modification companies and foreclosure consultants not being able to accept upfront fees for services before they are rendered.  Also that a client has a right to know where the funds are going if they are to be disbursed to any 3^rd party.

§  WHY THIS NEEDS AMENDING: I do agree that this has been the biggest area for scam artists to cash in on.  Which is exactly why licensing and regulation is needed.  However, there needs to be protection on both the consumer side and the business side.  Every single client that we did not collect an upfront payment on, still to date, has NEVER paid us for services rendered.  We’ve even take $1000 off of a payment and literally taken homes off of the courthouse steps.  So there must be a compromise.  Mandy came up with creating some sort of broker trust account or escrow account that money will be held in until services are rendered.  That way both parties are protected in the transaction.

There are other little things that we have requested be amended, however this is the meat of it.  Do you know what the great thing is??  On Monday, Mandy testified to this Committee including the author of the bill, Marcus Conklin and they AGREED.  Conklin has spent a great amount of time on this bill and we are very fortunate and proud to be a part of recreating it.  The amendments are currently being drafted and will be sent to Conklin to review and then to AAA Home Rescuers to review!

Much research and time and effort was put into making this happen and it has!

So it’s happening folks…REGULATION IS COMING!!!  As soon as the bill is passed, licensing and regulation will be implemented and the GOOD GUYS WILL PREVAIL!!

This entry was posted on Thursday, April 30th, 2009 at 6:19 pm and is filed under Education. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.