Legal Question in Credit and Debt Law in Florida
Can a mortgage company offer debt settlement and repair services?
I own a Mortgage Company (net branch) and I am looking to offer debt settlement, credit repair and loan modification services to my clients that we market to in Florida and few other states. I want to know if I can offer these services legally and what I would need to obtain to be able to do this. We have a great reputation and we are currently outsourcing these services but it is starting to effect our customer satisfaction ratings because the 3rd party companies are not meeting our client's expectations. The service is just not what our clients are accustomed to and I want to offer one stop shop for people that we market to. Most of Our business is refinancing for debt consolidation and lowering payments, but we turn down a lot of clients and lose a lot of money by not being able to offer these solutions. Can someone guide me and let me know what I need to do to make this a reality? Thanks in advance
1 Answer from Attorneys
Re: Can a mortgage company offer debt settlement and repair services?
There are some severe limitations to the consumer when using a non-attorney for debt settlement. Don't get me wrong, there are dozens of companies out there right now doing exactly that, but there are some pretty serious pitfalls that can get you in hot water with your customers that you simply can't necessarily address adequately.
First things first, you would need to review the Credit Repair Organizations Act to make sure you are in compliance with those regs. You can check that out on Thomas.gov, and be sure to peruse the FTC.gov website for additional regs.
After that, you will need to review the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 for additional regulation as debt settlement companies are considered a "Debt Relief Agency" under BAPCPA. There are circumstances under which your earned fees can be recaptured by a Bankruptcy Trustee under BAPCPA.
I am not aware at this time of any special state licensing for agencies like this, but not being familiar with the federal regs can really put a hurt on your mortgage/correspondant lender company.
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