Loan modifiers will soon need license, says Florida Office of Financial Regulation

The clock is ticking for unlicensed companies trying to entice home buyers to modify their mortgages. Or demanding an upfront fee to help them out.

Come Jan. 1, anyone who provides loan modification services must have an active license from the Florida Office of Financial Regulation. The rule is part of a law passed by the state Legislature earlier this year that also bans collecting fees up front for loan modification services related to foreclosures.

OFR Commissioner Tom Cardwell said the goal is to make sure loan modification services offer "a true benefit, not an unrealistic promise." Cardwell's advice to home buyers if a broker asks for money first: "Simply turn and walk away."

Since Gov. Charlie Crist signed the legislation in late June, about 4,800 mortgage brokers have applied for a license. Home buyers are urged to call the toll-free state hot line (1-800-848-3792) to verify they are working with a licensed loan modifier.