In October of 2009, pursuant to SB 94, it became illegal for any person, including lawyers, real estate licensees, corporations, companies, partnerships, or any other licensed or unlicensed person or party, to demand, charge, or collect any advance, up-front, or retainer fee, or any other type of prepayment compensation for loan modification work or services, or any other form of mortgage loan forbearance, involving 1 to 4 residential units. The provisions of Senate Bill 94 were due to sunset on Jan. 1, 2013.
However, with the recent signing of AB 1950, the sunset provisions of Senate Bill 94 will be repealed, making the ban on the collection of advance fees for loan modification and forbearance services permanent.
