A company offers to negotiate a loan modification for a homeowner and asks for $1,500 before contacting the servicer.
Correct Answer
B) Prohibited: no fee may be collected until the offer is accepted
A mortgage assistance relief service provider may not collect any fee until the consumer has executed a written agreement with the servicer or lender for the relief the provider obtained, which means no advance fee at all. Other choices: holding the money in trust is still collecting it in advance; a 3-day cancellation right does not license the fee; and the prohibition operates from the start rather than only when the effort fails. Source: 12 CFR 1015.5, advance fee ban for mortgage assistance relief
Why This Is the Correct Answer
A mortgage assistance relief service provider may not collect any fee until the consumer has executed a written agreement with the servicer or lender for the relief the provider obtained, which means no advance fee at all. Other choices: holding the money in trust is still collecting it in advance; a 3-day cancellation right does not license the fee; and the prohibition operates from the start rather than only when the effort fails. Source: 12 CFR 1015.5, advance fee ban for mortgage assistance relief
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