Foreclosure Consultant Surety Bond
Oakland -- Continuing his fight against scam artists who "prey on" vulnerable Californians, Attorney General Edmund G. Brown Jr. today issued a directive forcing foreclosure consultants to register with his office and post a $100,000 bond by July 1, 2009.
Those who fail to do so will be in violation of state law, subject to criminal penalties of up to a year in jail and fines ranging from $1,000 to $25,000 per violation.
"California is awash with con artists who prey on vulnerable families facing foreclosure," Brown said. "By forcing foreclosure consultants to submit detailed information to my office and post a $100,000 bond, this registry will help bring long-overdue transparency to this shadowy world."
Up and down the state, scam artists pose as legitimate foreclosure consultants, promising homeowners they will prevent foreclosure. In reality, these scam artists charge huge up-front costs, but don't provide an ounce of help.
Earlier this month, Brown's office prosecuted a scam artist who provided hundreds of homeowners with forged bank documents and directed them to send their mortgage payments to accounts she had created, instead of the homeowners' lender.
Additionally, Brown's office has seen a significant increase in the number of complaints from homeowners regarding foreclosure consultants.
The registry unveiled today will provide Californians with information about potential consultants and recourse in the event that a consultant violates the law.
All foreclosure consultants operating in California must post a $100,000 bond and register with Brown's office by July 1, 2009 and submit the following information:
- Name, address, and telephone number;
- All names, addresses, telephone numbers, websites, and e-mail addresses used or proposed to be
used in connection with their business;
- Copies of all advertising;
- Copies of each different contract the consultant will use with consumers; and
- A copy of its $100,000 bond.
Business and Personal Financial Statements Required
For the Best Program:
1. The complete Bond Application.
2. Personal information on each owner of the business. This includes the name, address, social security number and verification whether he/she owns any real estate.
3. Business and personal indemnity of all owners and spouses.
4. Information regarding how long they have been in business.
5. A business financial statement.
6. A personal financial statement from each owner.