ULG: SB 94 Threat to Citizens Facing Foreclosure

The United Law Group (ULG) has issued a statement against the Senate Bill 94 saying that it threatens the rights of distressed homeowners to seek legal counsel on their foreclosure problems.

In its statement, ULG said that the bill attacks companies and people who are committed to helping compel lending institutions and banks to find ways to keep homeowners in their properties.

The SB 94 is authored by banking finance and insurance committee chairman Senator Ron S. Calderon. Calderon said that the bill aims to protect consumers from falling victims to companies offering predatory loan modification.

ULG managing director Sean Rutledge said that if approved, the bill will force troubled homeowners to represent themselves and hurdle the complex process of foreclosure. He added that it would just result to more repossessions and homeless Americans.

The proposed bill is purported to prevent unscrupulous loan modification firms from asking distressed homeowners for upfront fees for their so-called “foreclosure rescue” services. The bill contains provision that prevents homeowners from getting legal representation to avoid foreclosure and during foreclosure proceedings.

Meanwhile, Rutledge disputes claims by supporters of the bill that it protects homeowners who have worked and are working hard to purchase their dream homes. He argued that the bill may be after unethical businesses, but it also attacks those people who legally represent distressed homeowners during foreclosure process.

On the other hand, Senior Litigation Attorney Richard Stinstrom criticized supporters of SB 94 who claimed that the Obama Administration has created plans to help homeowners and that scam artists are diverting borrowers’ attention from legitimate and certified sources of assistance. He pointed out that the administration’s programs have failed to create the desired result which is to help troubled homeowners save their properties from foreclosures.

Seven months after the establishment of the Homowner’s HOPE Hotline service, only one mortgage has been modified, according to Martin Andelman, a feature columnist.

Furthermore, Stinstrom said that services offering legal foreclosure prevention assistance also pose a threat to banks. He explained that allowing troubled homeowners to obtain services of experts to negotiate for loan modifications does now bode well for banks.

He said that banks prefer to deal directly with homeowners who lack the skills and knowledge to negotiate with experts and trained professionals on how to avoid foreclosure. This way, Stinstrom added, banks will have the upper hand during the negotiation.