Article 1. Mortgages in General - California Civil Code Section 2944.7

2944.7.  (a) Notwithstanding any other law, it shall be unlawful for
any person who negotiates, attempts to negotiate, arranges, attempts
to arrange, or otherwise offers to perform a mortgage loan
modification or other form of mortgage loan forbearance for a fee or
other compensation paid by the borrower, to do any of the following:
   (1) Claim, demand, charge, collect, or receive any compensation
until after the person has fully performed each and every service the
person contracted to perform or represented that he or she would
   (2) Take any wage assignment, any lien of any type on real or
personal property, or other security to secure the payment of
   (3) Take any power of attorney from the borrower for any purpose.
   (b) A violation of this section by a natural person is punishable
by a fine not exceeding ten thousand dollars ($10,000), by
imprisonment in the county jail for a term not to exceed one year, or
by both that fine and imprisonment, or if by a business entity, the
violation is punishable by a fine not exceeding fifty thousand
dollars ($50,000). These penalties are cumulative to any other
remedies or penalties provided by law.
   (c) In addition to the penalties and remedies provided by Chapter
5 (commencing with Section 17200) of Part 2 of Division 7 of the
Business and Professions Code, a person who violates this section
shall be liable for a civil penalty not to exceed twenty thousand
dollars ($20,000) for each violation, which shall be assessed and
recovered in a civil action brought in the name of the people of the
State of California by the Attorney General, by any district
attorney, by any county counsel authorized by agreement with the
district attorney in actions involving a violation of a county
ordinance, by any city attorney of a city having a population in
excess of 750,000, by any city attorney of any city and county, or,
with the consent of the district attorney, by a city prosecutor in
any city having a full-time city prosecutor, in any court of
competent jurisdiction pursuant to Chapter 5 (commencing with Section
17200) of Part 2 of Division 7 of the Business and Professions Code.
   (d) Nothing in this section precludes a person, or an agent acting
on that person's behalf, who offers loan modification or other loan
forbearance services for a loan owned or serviced by that person,
from doing any of the following:
   (1) Collecting principal, interest, or other charges under the
terms of a loan, before the loan is modified, including charges to
establish a new payment schedule for a nondelinquent loan, after the
borrower reduces the unpaid principal balance of that loan for the
express purpose of lowering the monthly payment due under the terms
of the loan.
   (2) Collecting principal, interest, or other charges under the
terms of a loan, after the loan is modified.
   (3) Accepting payment from a federal agency in connection with the
federal Making Home Affordable Plan or other federal plan intended
to help borrowers refinance or modify their loans or otherwise avoid
   (e) This section shall apply only to mortgages and deeds of trust
secured by residential real property containing four or fewer
dwelling units.

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Last modified: February 16, 2015