Mortgage Loan Modification Predator Deserves Disbarment

The Massachusetts Supreme Judicial Court affirmed a single justice’s order of disbarment in a matter

arising out of the respondent’s solicitation and handling of a substantial number of mortgage loan modification cases over more than a four-year period.

Before the full court, the attorney accepted the findings of misconduct which the single justice found he had 

“systematically extracted illegal and excessive fees from numerous vulnerable and desperate clients with deceptive advertisements, misleading contractual arrangements, and deceptive and useless services such as the ‘lender benefit analysis’ and the ‘forensic loan audit.’ In addition, he engaged in unlawful fee-splitting to provide his partner and his employees with the financial incentive to use the machinations to enhance his personal financial interest at the expense of his clients.”

We focus instead on the respondent’s claim that this misconduct warrants a public reprimand rather than disbarment. For the reasons that follow, we reject that claim and conclude that disbarment is appropriate.

On sanction

The respondent’s misconduct involved repeated and multiple ethical violations in connection with loan modification and mortgage foreclosure cases over a number of years. We acknowledge that a single violation of one of the disciplinary rules at issue here might typically result in an admonition, public reprimand, or, perhaps, a term suspension. But it is well established that disciplinary violations are not viewed in isolation. We consider instead the “cumulative effect of the several violations committed by the respondent.” Matter of Palmer, 413 Mass. 33, 38 (1992). See Matter of Crossen, 450 Mass. 533, 574 (2008) (“[c]umulative and wide-ranging misconduct may warrant the sanction of disbarment, even if the individual instances of unethical conduct would not warrant so severe a sanction”); Matter of Saab, 406 Mass. 315, 326-327 (1989). As the board observed, “[e]ven minor violations, when aggregated, can result in a substantial sanction exceeding what each alone would receive.”

The repeated nature of the respondent’s misconduct, over a period of years, involving hundreds of economically, educationally, and linguistically disadvantaged clients in strained financial circumstances, evidenced by threatened foreclosure of their homes, warrants a substantial sanction…

Considering the extent of the misconduct, weighing the presence of the factors in aggravation and the absence of factors in mitigation, and giving due deference to the board’s recommendation, we conclude there was no error in the single justice’s judgment that disbarment is warranted.

(Mike Frisch)