Department of Financial Institutions cooks the books
The Department of Financial Institutions (DFI) recently issued a press release claiming it was seeking full restitution to consumers in recent unlicensed loan modification activity. The press release claimed that 32 companies were charged with unlicensed activities and a total of $436,000 in restitution was being sought. DFI heralded this as proof that they were cracking down on the “scams” that were taking advantage of Washington State consumers.There are a number of comments that this press release evokes. First and foremost, this large “bust” in fact only amounts to $14,000 per company in restitution. As the press release also claimed that the average fee charged by these companies for their loan modification services was $5,000, that meant that these companies were only caught servicing approximately three clients each. Those companies were thus small fish indeed. We at Rosenberg Law Group, PLLC have represented a number of the companies involved, and can speak to its own experience that, in fact, the companies either did little business in Washington State or were in reality individuals operating behind an LLC as sole proprietors. So much for the “big busts.”The second thing to know is that, while the statement of charges may be asking for $436,000, it will likely only receive a fraction of that. As we know, one of the first things DFI bargains away is restitution. The last thing DFI ever bargains away is its own investigative fees. Thus, that number is a fiction.Finally, although the DFI claims that those busted were all bad actors preying on Washington residents, unlicensed loan modification activity is often not that simple. Unlicensed activity is just that: operating without a license. It does not mean that you are ripping the consumers off. It could be that you simply failed to renew your license. Several of the companies thought that the attorney exemption applied, not requiring them to obtain a license.For the real story about DFI, contact the Rosenberg Law Group, PLLC.