On January 3, 2025, the Utah House of Representatives introduced H.B. 99, a legislative bill aimed at amending regulations surrounding residential mortgage loan modifications. The bill seeks to enhance consumer protection by imposing stricter licensing requirements and operational guidelines for individuals and entities engaged in loan modification assistance and foreclosure rescue services.

Key provisions of H.B. 99 include prohibiting unlicensed individuals from providing loan modification assistance or engaging in foreclosure rescue activities. The bill mandates that any loan modification assistance must be accompanied by a written agreement detailing the specific services to be provided. Additionally, it prohibits the collection of fees prior to obtaining a written offer for loan modification from the lender, thereby safeguarding consumers from potential exploitation.

The bill also addresses deceptive practices by prohibiting licensees from falsely claiming special relationships with lenders or misrepresenting their affiliations with government agencies or nonprofit organizations. Furthermore, it restricts practices that could lead to conflicts of interest, such as requiring clients to transfer property titles or make payments to parties other than their loan servicer.

During discussions surrounding H.B. 99, lawmakers highlighted the growing concerns over predatory lending practices that have emerged in the wake of economic downturns. Advocates for the bill argue that these measures are essential to protect vulnerable homeowners from scams that could exacerbate their financial distress. However, some industry representatives have raised concerns about the potential burden of increased regulation on legitimate businesses providing assistance to struggling homeowners.

The implications of H.B. 99 extend beyond regulatory compliance; they touch on broader economic and social issues, particularly in a state where housing affordability remains a pressing concern. Experts suggest that by tightening regulations, the bill could help restore consumer confidence in the mortgage modification process, potentially leading to more favorable outcomes for homeowners facing financial difficulties.

As the legislative process unfolds, stakeholders will be closely monitoring the bill's progress and its potential impact on the housing market and consumer protection landscape in Utah. The next steps will involve committee reviews and potential amendments before the bill is brought to a vote in the House.