Bar Issues Foreclosure Ethics Alert

• Jurisdiction: California,United States
• Citation: Vol. 03 No. 2009 Pg. 02
• Publication year: 2009
• Pages: 02
• Year: 2009
• topic: Real Estate

California Bar Journal 2009.

CBJ - March 2009 #02. Bar issues foreclosure ethics alert

California Bar Journal
March 2009

Bar issues foreclosure ethics alert

By Nancy McCarthy
Staff Writer

When San Diego attorney Carol S. was asked recently if she wanted to associate with a firm offering foreclosure modification services, she saw red flags. At a meeting with an intermediary who had approached her firm, she expressed concern about potential ethical constraints, such as splitting fees with non-lawyers and soliciting clients, but "they tried to explain some easy loopholes."

Just three years out of law school, Carol (not her real name) said she has heavy student loan debt and the risk seemed too great. After consulting with both the Department of Real Estate and the State Bar's Ethics Hotline, she decided to forget it.

"These places are largely unregulated," she said. "But I think it would be impossible to live up to your ethical obligations."

Carol is not the only lawyer who's worried about working with foreclosure consultants or loan modification operations that have developed in response to the collapse of the housing market. Indeed, so many have contacted the State Bar for ethics advice that its professional responsibility committee issued an alert last month offering guidance to lawyers thinking about signing up. "The most important thing is for lawyers to understand this area is fraught with danger from an ethics point of view," said Jon Rewinski, a Los Angeles litigator who drafted the ethics alert.

California law specifically...