Las Vegas NowNearly 30 Loan Modification Companies Face Closure

Nearly 30 Loan Modification Companies Face Closure

Nearly 30 loan modifications companies will be shut down Tuesday for not following a new law.

The Nevada Division of Mortgage Lending is closing the companies because they failed to meet their obligations to get a minimum $75,000 surety bond. The bond is a provision meant to protect consumers who may have been hurt by the loan modification provider.

Starting Tuesday, homeowners will be able to see a list of companies that are authorized to provide loan modifications on this website. Consumers are also able to file a complaint using this form.

Forty-eight companies signed up with the Department of Business and Industry to become certified. About 30 failed to meet the extended deadline, which was last Friday.

A new state law requires loan modification companies to get a surety bond of at least $75,000. This is proof of insurance needed to protect the homeowner.

Elisabeth Daniels with the Department of Business and Industry says companies that failed to comply will be forced to stop operating. "They will have 10 days to show they have stopped business, closed up shop and that they have refunded the customer what they owe to them based on contract that they have with customer homeowner," she said.

Daniels says there are far more loan modification companies around Las Vegas that have not even attempted to try and follow the new regulations. She hopes that will change as the new industry becomes more regulated.

Under the new law, a company can face criminal charges and fines for operating without a license.

Tuesday there will be a list available to see which companies are authorized by the state.