Be careful who you hire to do a loan modification, short sale or fight a foreclosure!

The Department of Banking in CT has gone to great lengths to stop unscrupulous and unqualified people from taking advantage of distressed homeowners and individuals. In order to charge someone to help negotiate any type of debt reduction in CT you need a license. As of September 2010 only 10 companies hold a valid license in CT.

Realtors that represent homeowners in a short sale are not required to get the additional license. For a free confidential consultation contact us. Below I have listed some information about the license requirements that was taken straight from the department of banking website

Debt Negotiation Licensing

Loan Modification, Short Sale or Foreclosure Rescue

Who needs a license?

"Debt negotiation" means, for or with the expectation of a fee, commission or other valuable consideration, assisting a debtor in negotiating or attempting to negotiate on behalf of a debtor the terms of a debtor's obligations with one or more mortgagees or creditors of the debtor, including the negotiation of short sales of residential property or foreclosure rescue services.

Who does not need this license?

1. Any attorney admitted to the practice of law in this state, when engaged in such practice.
    
2. Any bank, out-of-state bank, Connecticut credit union, federal credit union or out-of-state credit union, provided subsidiaries of such institutions other than operating subsidiaries of federal banks and federally-chartered out-of-state banks are not exempt from licensure.
    
3. Any person licensed as a debt adjuster pursuant to Sections 36a-655 to 36a-665, inclusive, of the Connecticut General Statutes while performing debt adjuster services.
    
4. Any person acting under the order of a court.
    
5. Any bona fide nonprofit organization organized under Section 501(c)(3) of the Internal Revenue Code of 1986, or any subsequent corresponding internal revenue code of the United States, as amended from time to time.

Debt Negotiation

Schedule of Maximum Fees

The following are the maximum fees that debt negotiators may charge for their services:

Initial Fee:
A debt negotiator of unsecured debt may charge the debtor a reasonable one-time initial or set-up fee in an amount not to exceed fifty dollars ($50).

Service Fees:
A debt negotiator of unsecured debt may charge a monthly service fee not to exceed eight dollars ($8) for each creditor that is listed in the debt negotiation service contract.  The total service fee charged to a debtor may not exceed forty dollars ($40) per month.

Aggregate Fees:
A debt negotiator of unsecured debt may collect total aggregate fees including the initial fee and service fees, not to exceed ten percent (10% ) of the amount by which the consumer’s debt is reduced as part of each settlement as agreed to in the debt negotiation service contract as each settlement is achieved.  A debt negotiator may not charge more than ten percent (10%) of the amount by which the consumer’s debt is reduced on the basis that the consumer has entered into a debt negotiation contract for joint obligations of a consumer and a consumer’s spouse or other member of the consumer’s household.

Debt Negotiators of Secured Debt:
A debt negotiator of secured debt, including Short Sales and Foreclosure Rescue Services, may impose a fee upon the mortgagor or debtor for performing debt negotiation services not to exceed five hundred dollars ($500).  Such fee shall only be collectable upon the successful completion of all services stated in the debt negotiation service contract.  Nothing herein shall prohibit any person from receiving compensation from the mortgagee or its assignees.