Foreclosure Attorneys Face Discipline Charges

• Jurisdiction: California,United States
• Citation: Vol. 08 No. 2009 Pg. 03
• Publication year: 2009
• Pages: 03
• Year: 2009
• topic: Business of Law,Bankruptcy and Insolvency,Contracts,Civil Procedure,Real Estate

California Bar Journal 2009.

CBJ - August 2009 #03. Foreclosure attorneys face discipline charges

California Bar Journal
August 2009

Foreclosure attorneys face discipline charges

By Nancy McCarthy
Staff Writer

The State Bar has taken action to lift the law licenses of three California attorneys allegedly engaged in loan modification fraud and is investigating nearly 140 more. One of the three resigned with charges pending, another faces involuntary inactive status and the third has been formally charged with seven counts of professional misconduct.

A 10-person task force, consisting of four lawyers and six investigators, also is working with federal, state and local law enforcement as part of a statewide crackdown on foreclosure fraud. Attorney General Edmund G. (Jerry) Brown Jr. sued four more lawyers, as well as 14 companies and their executives, last month for bilking homeowners seeking mortgage relief. The lawsuits were part of "Operation Loan Lies," a nationwide sweep of sham loan modification consultants.

"The loan modification industry is teeming with confidence men and charlatans who rip off desperate homeowners facing foreclosure," Brown said. "Despite firm promises and money-back guarantees, these scam artists pocketed thousands of dollars from each victim and didn't provide an ounce of relief."

Brown is demanding millions in civil penalties, restitution for victims and permanent injunctions to keep the companies and defendants from offering mortgage-relief services.

Suzan Anderson, who oversees the State Bar task force, said her office receives between 15 and 40 new complaints each week. As of late July, it was investigating 391 complaints against 140 attorneys, compared to a total of nine investigations relating to loan modifications 2008.

"We're working hard to get a lot of filings done," Anderson said. "There are new twists every day. All the attorneys...