Companies and individuals offering loan modification services to residential property owners in Washington State are required to be licensed with DFI. You can check the license status of a company or individual offering loan modification services by going to www.dfi.wa.gov and clicking on the “Verify License” link.
Since 2009, DFI has received almost 700 complaints against unlicensed companies offering mortgage rescue services to distressed homeowners in Washington. The vast majority of companies offering these services are not licensed with DFI. Worse, many of these "companies" aren’t companies at all, but merely shell entities run by individuals intent on scamming distressed homeowners. Many of these companies continue to charge an upfront fee, despite the fact that collecting an up-front fee is a violation of the FTC’s Mortgage Assistance Relief Service’s Rule.
Consumers have reported that some companies are claiming that funds sent to the company are being held "in trust" and will be released to the lender or servicer once the modification process is complete. Unfortunately, in many cases, the company and the money simply disappear, with no assistance provided to the consumer.
DFI has issued more than 110 actions against unlicensed loan modification companies and the individuals running them. Many of those actions have resulted in payment of fines and restitution to Washington consumers.
In September 2012, as part of a sweep conducted by the Enforcement Unit, DFI charged 40 businesses with providing unlicensed loan modification services to Washington homeowners. These Statements of Charges also sought restitution for more than 200 consumers.
We encourage our licensees who may interact with Washington consumers to remember the following free resources for distressed homeowners: