California DRE Shuts Down Loan Modification Company

Whitfield Financial Services, which operated a loan modification business across California, surrendered its real estate license after the California Department of Real Estate (DRE) accused it of illegally collecting advance fees for modification services. According to a release from the DRE, the surrender comes in lieu of defending those charges, which include failing to properly handle trust funds, and puts Whitfield and its designated broker, Raymond Lorenzo Jeter out of business. The DRE also accused Jeter of failing to exercise proper supervision over Whitfield’s operation. Jeter admitted no wrongdoing by either himself or Whitfield but surrendered all license rights. He can no longer operate as a real estate broker or conduct loan modifications. Under California law, no one offering loan modification assistance can demand, claim, charge or collect upfront fees from borrowers. A feature in the November issue of HousingWire studied the rise in loan modification scams by third-party companies. In July 2008, the DRE had less than 10 complaints against those companies, but today the department reported 1,300 pending investigations. “With so many people struggling to stay in their homes, foreclosure rescue and loan modification scams have risen dramatically,” DRE commissioner Jeff Davi said. “While enforcement efforts are important and we encourage victims to file complaints, consumer education is the key to keep consumers from falling prey to unscrupulous companies. There is no reason a consumer should pay an upfront fee for loan modification services.” Write to Jon Prior.