With too many lawyers taking advantage of struggling homeowners, the California legislature approved a new law preventing attorneys from getting paid until they have finished helping their clients with loan modifications. The problem with this solution is that now many honest lawyers won’t help homeowners because of the payment restriction. Unscrupulous lenders often use all possible tactics to delay resolution of a case, including repeatedly “losing” paperwork. Meanwhile, the lawyers who are helping homeowners work extended hours without being paid.

 

Lawmakers and the state bar association said they had to do something about swindling attorneys who charged substantial fees for work they never delivered. In 2008, the bar association received only seven complaints of misconduct involving loan modifications. By the following year, there were hundreds and then thousands of complaints.

-Noel Brinkerhoff

 

Homes at Risk, and No Help from Lawyers (by David Streitfeld, New York Times)