Are the loan modification rules penalizing honest companies?

Earlier this year, legislation was passed creating strict regulations for loan modification companies in Nevada. The hope was that the new rules would weed out the companies which have been scamming homeowners.

But are the rules penalizing honest companies?

News 3's Dan Ball spoke with a loan modification company owner who says he's been trying to follow all the rules. William Vinson owns and operates Alexander Cherie Ltd., a loan modification company here in the valley.

"We've been struggling with the bond requirements since we were aware they were being put into place," Vinson tells News 3.

Vinson says he welcomed new state regulations cracking down on loan modifiers, however, he says the state's Mortgage Lending Division has made the process difficult.

"Some of the verbiage for the bond was a little confusing; the bond companies that we were working with or attempted to work with were not sure what verbiage needed to be a part the bond, so with all these new legislations that passed there was some confusing points of that process of making the company legitimate company."

Dan Ball: Are you glad about the new regulations for your industry?

Vinson: Absolutely, very much. I feel it's gonna weed out the individuals that have been out there from the beginning scamming and taking homeowners' monies.

Last week Commissioner Joe Waltuch told News 3 that if companies didn't have their bond issued by November 2 they would have to stop operating until they could do so. If not, this is what would happen:

Dan Ball: If your office finds out they are still working, what will your office do?

Waltuch: The first thing we will do is send an investigator into the field. We plan on doing that for any companies that do not comply and then if we continue to find out they are still in business or have not shut down properly we will take administrative action which is an cease order and we have the ability to fine up to $10,000 per violation.

Ten days later, the Mortgage Lending Division's web site still shows around 20 companies that have not posted a bond. So are they still operating?

We called the commissioner's office to find out if investigators had been sent into the field but we were told Commissioner Waltuch was in meetings all day and could not comment.

Vinson says he stopped accepting applications last week until Thursday of this week when his bond was approved. He says the best thing a homeowner can do to avoid getting scammed is ask questions.

"I honestly think the best thing a homeowner can do is ask for referrals; I honestly believe that. They can be persistent, they can constantly contact that company, ask for an update, ask for the progress of the modification. It is lengthy, there is no quick fix, so to speak."

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