Californians will get enhanced protection from foreclosure rescue scammers under a new plan from state Attorney General Jerry Brown, which will require foreclosure consultation companies to register with the AG’s office and post a $100,000 bond by July 1st if they want to stay in business.

The plan will create a registry of foreclosure consultants operating in the state, which will allow consumers to research companies before they seek their services, and will also open up a paper trail for recourse if the company violates the law. All foreclosure consultants operating in the state must post a $100,000 bond with Brown’s office by July 1, and provide company information – including copies of contracts that will be offered to consumers, and examples of advertising. In exchange, the foreclosure consultants will receive a Certificate of Registration, according to the California AG’s office.

Foreclosure “rescuers” who try to stay in business without fulfilling the new registration requirements will face criminal penalties, including up to a year in jail, and fines from $1,000 to $25,000 for each violation.

This week’s action from California’s top cop is the latest government enforcement move meant to protect cash-strapped homeowners from scammers looking to capitalize on the housing market crisis. In April, the federal government announced a nationwide crackdown on the skyrocketing amount of predatory companies making “Foreclosure Relief Now!” and “Save Your Home!” promises they can’t (or won’t) keep.

  • Brown Directs Foreclosure Consultants to Register with his Office and Post $100,000 Bond (ag.ca.gov)
  • L.A. Times: California Attorney General Seeks to Deter Foreclosure Scams
  • Avoid Foreclosure: Help for Struggling Homeowners (FindLaw)
  • Foreclosure: State-Specific Help and Resources (FindLaw)
  • Bankruptcy and Foreclosure in California (provided by Jackie Robert Geller)

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