1. Be careful with a 100% guarantee, usually 100% is not really 100%, read your agreement.
2. “Attorney backed” or “attorney assisted” companies always raise red flags– if you want legal services, hire an attorney directly. Some companies do refer their cases to certain attorneys, but if they say an attorney is working on your file, get a name and confirm they are a licensed California attorney by looking here: http://members.calbar.ca.gov/search/member.aspx. Keep in mind that a law firm can not be a traditional corporation (must file as a professional corporation) or LLC
3. *The company, unless a legitimate law firm, must be licensed by the Department of Real Estate, ask for a license number of a licensed broker or corporation name and confirm this information here: http://www2.dre.ca.gov/PublicASP/pplinfo.asp also look here for seize and desist order relating to loan modification activities.
4. *If they are collecting an advanced fee and licensed by an attorney, make sure they are authorized to use the agreement by confirming they are on the advanced fee agreement listing here: http://www.dre.cahwnet.gov/mlb_adv_fees_list.html. UPDATE: Because of SB 94, generally, no one is permitted to collect advance fees (there are exceptions).
5. *They must have an approval process. Not all loans can be modified, and if they just accept anyone who gives them money, they likely do not care to really provide you with a predictable result.
6. They are not operating locally in California. Try to find a company that you can meet in person, if possible.
7. The agreement with the loan modification company or person is completely different than the person you are working with.
8. There are multiple parties (different business names, etc.) involved working on your file. This may be a sign that you are working with a call center or marketing company when being signed up. This usually means the loan modification company has too many files. Remember, when a company does high volume, it becomes difficult for them to produce quality work.
9. They promise principal reductions or rescission of your loan.
10. Their company is brand new–most loan modifications are new, but if they have been in business for more than six months, they should have a public track record. Check out the BBB and Rip-Off Report: http://www.bbb.org/us/ and http://www.ripoffreport.com/.
11. Huge upfront fees, we are talking more than $6,000 on average. Once you get into five digit fees, it is a huge red flag, make sure you know exactly what service they are providing. Also be weary of recurring monthly fees.
12. Watch out for virtual companies that do not have a real street address office. If possible, find a local company in your area so that you can sign up in person.
13. Of course, if the company stops returning your calls, you have a problem.

The above are just general guidelines. The below video does not cover SB 94.

Top Floor Legal is owned by Nasir N. Pasha, Esq., a graduate of the Thomas Jefferson School of Law.  Mr. Pasha started Top Floor Legal to fill a gap he identified in traditional legal service and satisfy a need for a law firm with the skills and capabilities to provide legal counsel to businesses throughout their four stages of development: start-up, growth, expansion, and maturity.

Prior to establishing Top Floor Legal, Mr. Pasha’s focus as an attorney was risk management and liability prevention for businesses of all types.  He became aware of a growing perception among business owners that attorneys were not furthering success, but were, instead, actually hindering growth.  It became his goal to offer appropriately risk-conservative advice while at the same time providing efficient solutions that would maintain momentum and encourage forward-movement.

In addition to his legal credentials, Mr. Pasha is an established real estate broker with an extensive technical background in web-based applications and development.  This diverse experience makes him uniquely qualified to understand and serve the needs of both real estate brokerage firms and Internet-based businesses in California.

Mr. Pasha was born in Ohio, the son of Pakistani immigrants and has been based in San Diego since 2001.  He is one of three children.