Recent consumer complaints have prompted Connecticut bank regulators to remind them about limits on fees mortgage-loan modifiers may charge for their services and how to verify that vendors are licensed.
The state Banking Department said Tuesday that it recently sanctioned one, Compliance Audit Group, for offering to modify mortgages although unlicensed to do so in Connecticut.
Compliance Audit was hit Nov. 16 with a “cease and desist’’ order from the state after two residents alleged they paid $2,950 to have the firm represent them in debt-modification efforts, the agency said. Connecticut law limits such fees to a maximum $500.
The banking department says its efforts to contact Compliance Audit via certified mail about the complaints so far have been fruitless. The firm has a limited period in which to respond, or face a civil penalty of $100,000 per alleged violation, the agency said.
Meantime, the agency issued a list of “red flags’’ as to a potential mortgage-loan modification scam:
- You are asked to pay large, up-front fees.
- Mortgage loan modification help is offered by a company calling itself a “homeowner consultant” or “financial counselor” and not a DOB-licensed “debt negotiator.”
- The company advises you not to make your mortgage payments.
- The company advises you not to contact your mortgage lender or provider because the person or company offering you assistance will handle all of the details; and
- The company advises you to make future payments to a new person or firm without informing your current mortgage lender or provider.
Consumers who believe they have been victimized or want to avoid becoming one can use the “Verify a License” feature at the banking department’s website, www.ct.gov/dob, or by calling 1-800-831-7225.