illegal loan modification companies should be shut down and attorney fees can be awarded to the successful plaintiff

The following is general legal information only and not intended to serve as legal advice or a substitute for legal advice.  For specific questions, please contact an attorney.      

Steven C. Vondran, Esq. can be reached at steve@vondranlaw.com.  He is licensed to practice law in Arizona and California.

Introduction

Lately we have been dealing with several homeowners who have been victimized by illegal loan modification companies (companies that do not have a DRE approved advance fee agreement, meaning they have not received a letter of non-objection from the California Department of Real Estate if accepting advance fees from California Homeowners for performing or seeking to perform loan modifications, or loan modification companies that do not utilize a licensed broker, or who engage in false advertising, or use questionable "attorney-backed" or "attorney-based" schemes that mislead Clients into beleive an attorney will be handling their foreclosure prevention case).

California homeowners have been telling us they have been lied to, cheated, deceived, scammed, ripped off and taken advantage of by loan modification companies that violate the law in one aspect or antoher.

Our office is handling select cases on a contingency fee basis and we are investigating the operations, partnerships and joint ventures that are popping up at a very rapid pace.  Under certain circumstances, attorney fees may be available which can help vindicate important rights for loan modification clients who are victimized by illegal companies.

The case for attorney fees against illegal loan modification companies in California

 The California Legislature enacted Bus. & Prof. Code § 17200 and the licensing requirements for loan modifications as a consumer protection measure.  Since the Attorney General's office and the Department of Real Estate are overwhelmed with vindicating public rights with their limited resources, clients are often forced to take matters into their own hands.  See Hewlett v. Squaw Valley Ski Corp., 54 Cal. App. 4th 499, 545, 63 Cal. Rptr. 2d 118 (1997) ("Due to the burdens imposed on public agencies, adequate government enforcement of the laws is not always possible, making private action imperative.").  Therefore, in addition to damages for the causes of action listed above, litigants may seek attorneys fees under Cal. Code of Civil Procedure § 1021.5. 

Section 1021.5 provides for attorneys fees for (1) a successful party; (2) in an action that has resulted in the enforcement of an important right affecting the public interest; (3) if a significant benefit has been conferred on the general public or a large class of persons; and (4) the necessity and financial burden of private enforcement are such as to make the award appropriate.  Cal. Code Civ. Proc. § 1021.5; Bowman v. City of Berkeley, 131 Cal. App. 4th 173, 176-77, 31 Cal. Rptr. 3d 447 (2005).  The fundamental objective of this section is to encourage suits effectuating a strong public policy by awarding substantial attorney fees to those who successfully bring such suits and thereby benefit a broad class of citizens.  Consumer Cause, Inc. v. Mrs. Gooch's Natural Food Markets, Inc., 127 Cal. App. 4th 387, 25 Cal. Rptr. 3d 514 (Ct. App. 2005).

As the California Supreme Court has recognized, the private attorney general doctrine is an effective means of enforcing California's fundamental public policies.  In this case, the California Legislature has enacted a number of consumer protection statutes, reflecting the policy that California will not tolerate deceptive business practices.  Given the lack of resources to prosecute all violations, it is incumbent upon victimized clients to ensure that violators are substantially punished.   California courts have seen fit to recognize this method of enforcement, particularly where consumers are seeking to vindicate important protections the Legislature has enacted.  See Graham v. DaimlerChrysler Corp., 34 Cal. 4th 553, 101 P.3d 140 (2004) (Awarding attorney fees against truck manufacturer marketing its trucks with false statements about its towing capacity). 

Like the truck manufacturer in DaimlerChrysler, many illegal and out of compliance loan modification companies are engaged in false, misleading, and deceptive marketing practices.  The deception, as noted above, involves soliciting loan modification services, despite lacking the requisite licensing to legally engage in such services.  False advertising and outright fraud are other violations we have seen.  Therefore, where applicable, a litigant shold consider invoking their rights in private attorney general fashion and seeking reimbursement for all attorneys fees incurred in the prosecution of the action. 

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Notice/Disclaimer /Contact Information:  The preceeding information is general information only and not intended to serve as legal advice or a substitute for legal advice.  For specific legal questions please contact a qualified attorney licensed in your state to assist you.  There are no warranites or representations made that the following information is accurate, complete or up to date.  In addition, any emails sent to us are not confidential and do not create an attorney client relationship.  Please use your discretion before sending confidential information.  The Law Offices of Steven C. Vondran is operated by Attorney Steve Vondran.  Mr. Vondran is licensed to practice law in the States of Arizona and California and only seeks to solicit and serve Clients in these states.  This is an advertisement and communication pursuant to state bar rules.  There are no guarantees a loan audit will reveal any legal errors of compliance violations.  There are likewise no guarantees any lender or loan servicer will modifiy any loan.  Each loan, property, borrower, investor and servicer are different.  In addition, there are no representations made that Mr. Vondran will accept any litigation case following a loan audit and/or a demand letter to the lender. 

For more information about Mr. Vondran's law firm please visit www.VondranLaw.com the Attorney Loan Audit program can be reviewed at www.AttorneyMods.com  If you are a California Real Estate Broker looking for a DRE Approved Advance Fee Agreeement please visit www.AdvanceFeeContract.com   We have over 20 approved DRE companies as of this writing and have several advance fee agreement options available including an advance fee agreement that allows for outsourced Attorney Loan Audits and/or a letter to the Lender.  We also have spanish advance fee agreements available.

If you are a homeowner and are looking for an attorney or law firm to handle your loan modification request, please visit www.loanmodsolutions,net   Fill out the form and a representative of our firm will contact you promptly to discuss your situation.  We also have loan modification information available at www.AttorneyLoanAudit.com

Homeowners who believe they may have been a victim of loan modification fraud should visit www.ModScams.com or www.LoanModificationScams.net to learn more about what you can do to fight foreclosure rescue scams.

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                        Arizona: 2415 E. Camelback Road, Suite 700, Phoenix, AZ 85016

                        Phone (877) 276-5084  Email:  Steve@VondranLaw.com