NYC Proposed Statute Would Impose Licensing-Related Requirements On Upfront Fee Loan Modification Firms

In New York City, the Brooklyn Daily Eagle reports:

• The City Council has proposed legislation that will increase the regulatory requirements for distressed property consultants. This bill, when signed into law, will crack down on people attempting to prey upon homeowners facing foreclosure.

***

• The proposed legislation would give authorities a way to determine who is offering a legitimate consulting service by requiring licensing.(1)

For more, including what else the proposed bill does, see City Tackles Those Who Prey on Homeowners (New Legislation Will Require Licensing of Property Consultants).

(1) For those loan modification firms who purport to review homeowners' loan documents in search of violations of consumer lending laws, as well as violations of other laws relating to bringing foreclosure actions, there already are licensing requirements. Such work requires a law license. Providing these so-called forensic audits of loan documents directly to the consumer without either being an attorney, or without being under the direct supervision and control of an attorney, arguably constitutes the unlicensed / unauthorized practice of law. See Unlicensed Practice Of Law Becomes An Issue With Some Loan Modification Firms.