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A Loan Mod Company May NOT Collect Money Up-Front


Colorado Consumer Protection Act states a loan modification company may not "Claim, demand, charge, collect, or receive any compensation until after the foreclosure consultant has fully performed each and every service the foreclosure consultant contracted to perform or represented that the foreclosure consultant would perform."


If a "loan modification" company requires payment of an upfront fee or monthly payments, then the company may be in violation of Colorado Law. Essentially, the company must work without payment until it has obtained a modification.


Don't pay your mortgage payments to anyone other than your lender or loan servicer.


Beware Of Loan Mod Company Scams in Colorado

You May Be Entitled to Recovery






Each week, our law office receives calls from distressed homeowners who were scammed out of thousands of dollars from a “loan modification company”. These vulnerable victims usually learn the scammers never contacted their lenders when they find a foreclosure or eviction notice posted on their front door.


The Federal Trade Commission (FTC) has a rule in placed called Mortgage Assistance Relief Services (MARS) making it illegal for companies to collect any fees until the homeowner has actually received an offer of relief from the lender. Colorado has a similar rule under the Colorado Consumer Protection Act. These companies, even under the guise of saying they have an attorney on staff, can not legally collect any upfront fees. Only a licensed, practicing attorney, in the state where your home is located can require an upfront fee (retainer).


Further, lenders will only work with licensed, practicing attorneys. Lenders will not work with: phony counseling or foreclosure rescue companies, foreclosure consultants, mortgage consultants, forensic loan auditors, loan modification consultants, foreclosure prevention specialists or short sales negotiators.


As a licensed, established, and practicing attorney by the State of Colorado, I have sworn and taken an oath to follow all the rules, regulations and laws of Colorado and of the United States. Companies scamming homeowners are here today and gone tomorrow – after they’ve collected and debited your account for months. They know you don’t have the money to go after them, and most aren’t even located in Colorado. Gantenbein Law Firm may be able to help you recover the money you paid to these scammers. Call us today 303 618-2122 for more information.






City Park

1760 Gaylord

Denver, CO 80206








Only a Licensed Attorney Can Collect an Up-Front Fee (Retainer)


In Colorado, a licensed, practicing attorney may collect an up-front fee as a retainer. That retainer is placed in a Colorado Lawyer Trust Account Foundation (COLTAF) and is taken from the account by the attorney as work is done. 


Colorado law regarding upfront fees from loan modification companies specfically exempts attorneys. Loan modification companies often hide under the guise of a "law firm." However, they may not be a "law firm" or the attorney may not be admitted to practice in the State of Colorado. It is important to ensure that the company you are using provides you with the name and bar number of an attorney who is admitted to practice in Colorado. 



A Loan Mod Company Is Capped at What They May Charge 


Under 6-1-1107, 1(b), "A loan mod company can not claim, demand, charge, collect, or receive any interest or any other compensation for a loan that the foreclosure consultant makes to the home owner that exceeds the prime rate published by the federal reserve at the time of any loan plus two percentage points, with the total interest rate not to exceed eight percent per year."


Loan modification companies or consultants cannot issue a "loan" to homeowners for services that exceed 8% interest. Some modification companies do not charge an upfront fee but "loan" homeowners the money for services at a predatory interest rate.



A Loan Mod Company May Not Use Your Property as Collateral to Pay for Their Services


6-1-1107, 1(c) states that a loan modification company is prohibited to "take a wage assignment, lien of any type on real or personal property, or other security to secure the payment of compensation."


A loan modification company cannot take an interest in real or personal property as part of of the negotiation or modification process. Some companies request that the homeowner deed to property to the modification company and then "rent" the home to the former homeowner.


Click HERE

for a list of

 the red flags

identifying likely loan modification scams. 


Click HERE

to learn about

the most popular

loan modification




Third Parties May Not Pay for Loan Mod Services Unless Fully Disclosed


CCPA 6-1-1107, 1(d) prohibits loan mod companies from receiving "any consideration from a third party in connection with foreclosure consulting services provided to a home owner unless the consideration is first fully disclosed in writing to the home owner"


Loan modification companies can not receive referral fees or otherwise engage in fee sharing unless it is fully disclosed to the homeowner.


Loan Modification Companies May Not Acquire an Interest in Your Property


Loan Mod Companies are also prohibited to "acquire an interest, directly, indirectly, or through an associate, in the real or personal property of a home owner with whom the foreclosure consultant has contracted," under CCPA 6-1-1107, 1(e). 


Some modification companies try to stall the foreclosure or represent to the homeowner that they can stop the foreclosure by recording fake "deeds of trusts", aquiring an ownership interest in the subject property, or transferring title to the company and leasing the property back to the homeowner. Colorado law specifically forbids this practice.


Click HERE

for the links to report your scam


Some Loan Mod Companies Pose as Law Firms


A favorite way of loan modification companies to get around the rules in Colorado, is to pretend to be a law firm. These companies will state you will have an attorney on your foreclosure case. However, these are usually false claims, with a 'pseudo-attorney' on their payroll. Routinely,  clients never have any contact with their 'attorney'. The 'attorneys' do not have offices. We've even heard of an 'attorney' being assigned to a foreclosure case - with the attorney totally unaware they are involved in the case!


Again, it is important to ensure you are given the attorney's name on your loan mod case, his or her bar number and contact information. Make sure you contact that attorney to be sure they will be the attorney for the duration of your  case. Research the attorney and make sure he or she has not been discplined or disbarred in Colorado. You can research the attorney by visiting The Colorado Supreme Court website. 

Loan Mod Companies May Not Obtain Power of Attorney


Obtain a power of attorney from a home owner for any purpose other than to inspect documents as provided by law. 


Giving a loan modification company (or any other individual, in any matter) the power of attorney allows that person or company to make any and every legal decision for you. Often, this power is abused. Generally speaking, it is not a good idea to give your power of attorney to any loan modification company.








Some Loan Mod Law Firms are Not Licensed to Practice in Colorado


A favorite way of loan modification companies to allege they are compliant with Colorado laws is to state their loan mod company has a licensed attorney working on your case. However, in many cases, while this attorney is a licensed attorney, that attorney is not licensed to practice law in Colorado, or the loan company will 'hire' a local attorney who only acts as a figurehead, one who will never work on a case.  An attorney may not practice law in a state in which he or she is not licensed. Therefore, if a loan mod company only shows a licensed attorney in a state other than Colorado on their web site, they are likely not compliant with Colorado laws. Again, ask for the attorney name, bar number, and contact information.


Inspect the loan modification company website and make sure they have a Colorado business office. 


You May be Able to Recover any Lost Monies You Paid to the Loan Mod Company


Many Coloradoans have lost thousands of dollars to loan modification companies. Many- if not all- think they will never see their money again. If you have been a victim of a loan modification scam, or if a loan modification company has simply not complied with the Colorado rules governing loan modifications and foreclosure consultants, all hope is not lost. 


Gantenbein Law Firm is committed to helping Colorado homeowners. 


The attorneys at our firm will work aggressively to get your money returned to you if you have been a victim of a loan modification company - AT NO ADDITIONAL COST TO YOU. 


Contact our attorneys immediately for details, call 303 618-2122 today.

If you have been a victim of a loan modification scam, CONTACT our attorneys to schedule a free consultation of your case. We will get back to you immediately. From our office in Denver, we serve all of Colorado. 

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Loan Modification (also called Loan Mod or foreclosure consultant) companies are often always scams. They are among the worst predators: making millions of dollars off of homeowners that are already struggling financially. Gantenbein Law Firm is committed to helping those Colorado homeowners get their money back from these companies- at no additional cost to the client. 



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