Loan Modification Crimes Draw Disbarment
The California Supreme Court disbarred an attorney for crimes described by the State Bar Court Hearing Department
Beginning in or about June 2011, Respondent, with three non-attorneys, began operating a law office that was initially known as “Prudential Law Group” and later as “Prudent Law Group.” Beginning in or about May 2012, and through in or about October 2013, Respondent, with the three non—attorneys, continued the operations of these offices under the name “Remedy Law,” and later under a few other similar names (collectively, “Law Office”). The Law Office occupied three suites in a building. Respondent maintained an office in one of the suites. The sales department of telemarketers occupied the second suite, and there was a loan processing suite where employees worked on active files.
Respondent left the marketing to non—attorneys and failed to verify their false assurances. The Law Office website advertised the services of “attorneys” when Respondent was the only attorney affiliated with the office. It did not bear the words “Advertisement,” “Newsletter,” or words of similar import, nor did it state the name of the person responsible for it.
Unsolicited advertisements were mailed to homeowners that offered loan modifications for residential mortgages. These mailers did not bear the words “Advertisement” or words of similar import, nor did they state the person responsible for them. The mailers were presented in a format that could reasonably lead recipients to believe they had been sent by their mortgage lenders. The mailers also stated that the Law Office had reviewed property information and determined that the addressee may be eligible to modify the terms of their mortgage when no review of the mortgage had been done.
The non-attorneys hired three sales managers to oversee the telemarketers selling loan modification services. The telemarketers represented that the potential client was qualified for a loan modification and made representations concerning potential terms of such modification, without ability or authority. They represented that the Law Office had “attorneys” working on behalf of the customers when Respondent was the only affiliated attorney and did not negotiate with lenders (non-attorney processors performed the loan modification services). The telemarketers convinced some homeowners who were not eligible for loan modifications to employ the Law Office. They also made false promises about the potential terms of the mortgage modifications.
A payment system was set up where customers would sign a fee agreement to pay the full cost of the loan modification services. The customer would either pay the full cost upfront or write two or more post—dated checks, the first of which would be cashed prior to performing all (or any) of the loan modification services. Between in or about July 201 1 and in or about October 2013, Respondent and the non-attorneys charged customers of Prudent Law and Remedy Law, advanced fees exceeding $1.3 million for loan modification services. Respondent failed to make restitution of any portion of the illegal fees she collected from many of her clients.
(Mike Frisch)