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What is a California Foreclosure Consultant Bond?

A California Foreclosure Consultant Bond is a surety bond required of all foreclosure consultants in the state.  California Civil Code Section 2945.1 defines a foreclosure consultant as any person who advertises or represents another person for a fee for any of the following:

  • Obtaining a forbearance;
  • Stopping a foreclosure or sale;
  • Obtaining an extension period in which the owner may reinstate their obligation;
  • Assisting the owner in their right of reinstatement;
  • Assisting the owner to obtain a loan or advance; and/or
  • Save the owner’s residence from foreclosure.

Additionally, there are other activities as defined by the CA Civil Code which may require you or your company to obtain a California Foreclosure Consultant Bond.  The surety bond’s main purpose is to provide compensation for victims of foreclosure consulting companies who mislead or fail to follow the laws which govern the industry.  However, the surety bond is meant to function as a “last resort” and only be used when the principal has exhausted all other forms of payment for the fines and fees assessed to the company.

How do I apply for a California Foreclosure Consultant Bond?

  1. Complete our online California Foreclosure Consultant Bond application, or
  2. Download and complete our printable California Foreclosure Consultant Bond application, and
  3. Receive your surety bond quote in minutes!

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What California Foreclosure Consultant Bond amount do I need?

The state of California requires a $100,000 Foreclosure Consultant Bond from all foreclosure consultants doing business in the state.

Why do I need a California Foreclosure Consultant Bond?

In 2009, amidst the financial crisis, then Attorney General of California Edmund Brown Jr. wanted to crack down on scam artists preying on distressed home owners.  He issued a directive that required all foreclosure consultants to provide a $100,000 foreclosure consultant bond and register with the state.  As part of the registration, the foreclosure consultant also had to send the following:

  • The consultant’s name, address, and phone number;
  • Any email addresses, phone numbers, names, and websites to be used in the company;
  • Copies of all contracts to be used for services; and
  • Copies of all related advertising.

The consulting company will then be given a certificate of registration so they may legally operate within the state of California.

How much does the California Foreclosure Consultant Surety Bond cost?

The foreclosure consultant surety bond cost varies depending on the overall risk the surety company associates with it.  Factors such as personal credit score, financial statements, and experience all affect the premium charged by the surety company.  Applicants who have been in business for more than three years with solid financial statements should expect a rate of 1-2% of the bond amount or $1,000 – $2,000 annually.  However, new businesses may also obtain a low rate if experience can be proven and the company is properly capitalized.

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