SEC. 2703. VIOLATIONS.

   It shall be a violation of this Section for a Mortgage Modification Consultant to do any of the following:

   (a)   Perform any Service without a written Contract.

   (b)   Claim, demand, charge, collect, or receive any fee for performing any Service in connection with the modification of the terms of a loan secured directly or collaterally by a lien on a Residence until the Mortgage Modification Consultant has obtained from the Owner's lender or loan servicer a written offer of a loan modification for the Owner that accomplishes one or both of the following through an interest rate reduction, principal reduction or forbearance, term extension, or some combination thereof:

      (1)   Reduces the Owner's monthly loan payment (principal and interest) by at least 20% for a minimum of five years; or

      (2)   Reduces the Owner's monthly payment for housing expenses for the Residence, including principal and interest payment, property taxes, homeowners insurance, and any applicable homeowner's association fees, to no more than 31% of the Owner's monthly gross income for a minimum of five years.

   (c)   Take any wage assignment, any lien of any type on real or personal property, or other security to secure the payment of compensation. That security shall be void and unenforceable.

   (d)   Receive any consideration from any third party in connection with Services rendered to an Owner unless that consideration is fully disclosed to the Owner at the time the Contract is entered into.

   (e)   Acquire any interest in the Residence of the Owner with whom the Mortgage Modification Consultant has contracted. Any interest acquired in violation of this subsection shall be voidable, provided that nothing herein shall affect or defeat the title of a bona fide purchaser or encumbrancer for value and without notice of a violation of this Section. Knowledge that the property was a Residence does not constitute notice of a violation of this Section. This subsection may not be deemed to abrogate any duty of inquiry which exists as to rights or interests of persons in possession of a Residence.

   (f)   Take any power of attorney from an Owner for any purpose.

   (g)   Induce or attempt to induce any Owner to enter into a Contract that does not comply in all respects with Sections 2701 and 2702.

(Added by 203-09, File No. 090889, App. 8/28/2009)