Words from a Very Outspoken and Opinionated California Litigation Attorney

Here in California, our Department of Real Estate website (dub dub dub dot dre dot gov) lists the companies that have DRE "permission" to modify loans... add to this list any licensed California attorney, and that is where you should begin your due diligence search when you seek help in California. Other states probably have similar laws, so check with your own state DRE and state bar.

My law firm has been getting more and more calls recently from homeowners that were victims of predatory lenders who put them into an unaffordable loan and now fell into the hands of those same people who sold the toxic loans but profess to be saviors... DON'T BE A VICTIM TWICE! What's that they say, "Fool me once, shame on you, but fool me twice, and I'll sue your butt!"

Do your homework and THOROUGHLY investigate any firm before hiring them to save your biggest asset and the place you call "home." Scammers are popping up like dandelions on a freshly mowed lawn in April. They advertise on the Internet, freeway billboards, radio, television, and print media everywhere, not to mention spamming your email box with those third-world widows needing someone to receive three million dollars for them. Make no mistake, in many cases, these "loan modification experts" are the exact same loan officers and mortgage brokers who fleeced homeowners the first time around. After losing their jobs with the crash of the mortgage industry, they have found a new way to make ill-gotten profits from hard-working homeowners through loan modifications.

In California, with very few exceptions (and attorneys are one exception... no coincidence there... attorneys make the laws), it is against the law for anyone to take money up front for helping a homeowner who is in default. Don't trust a company that begins its relationship with you by breaking the law.

HERE'S THE BOTTOM LINE!

Hire an attorney - and not just any attorney either - one with experience in mortgage law, not just one with real estate law experience but one with experience in both FEDERAL and STATE litigation against mortgage companies, one who doesn't also do family law, criminal law, admiralty law, and immigration law as well, one who limits the practice to mortgage law (or at least a great majority of it), one who has the experienced staff, training, and know how to take on the big lenders and their top notch lawyers (lenders have attorneys - and darn good ones - check out their counsel on the web - big names top schools, shouldn't you have a lawyer too?).

We are not talking about a refund on your broken television here, we are talking about hundreds of thousands of dollars and your HOME - if you don't think this is the time to hire a highly educated and experienced professional instead of a weekend schooled, almost out of work, broker slash loan officer slash "expensive water in a wine bottle with alleged magical curative powers" salesperson, I don't know what would make you take things seriously.

Of course, this is one obnoxious lawyer's totally biased opinion, but one based on many many distressing calls to my office every day. And, yes, my firm loves taking cases against loan modification companies who have violated laws. This field is quickly becoming one of the fastest growing sections for our mortgage law firm.

- Paul J. Molinaro, Esq.

I would say that at the rate new clients are coming in, pursuing the bad apples will equal the loan modifications by the end of the first quarter. That said, if the Obama crew can get the Chapter 13 Bankruptcy lien strip rules to apply to FIRST mortgages, all the attorneys doing Chapter 13 BKs (and unabashedly I offer my firm's services as we do Chapter 7s and 13s) will be the biggest thing for lawyers in 2009. It will also be super great news for upside down homeowners.

- Paul

Right NOW Chapter 13 does NOT allow a lien strip on a FIRST mortgage. When changing the rule went before Washington last year for a vote it was shot down, but it looks like it will be passed this year. Senator Durbin (D from Illinois) is trying to push it through.

- Paul

My law firm is very in tune with the dire financial situations of our clients (by the very nature of what we do, our clients would not need our help if they had money). That said, we are a for profit law firm, and we pay our staff, our rent, and want to make profit as well.

Now, if someone has been suing their credit cards to pay their mortgage, their mortgage problems are not likely to be solved by a loan modification. We have these clients.... 50... 60... 70  thousand in credit card debt and a home that is upside down by 100 or 200 thousand dollars. This scenario sounds more like someone in need of a bankruptcy. Bankruptcy fees are somewhat guided by the courts as the trustee takes a very dim view of any firms charging above the local amount for services. Plus there are ways to allow attorneys to get paid from a client even as they go bankrupt. My suggestion? You guessed it... call a local bankruptcy (BK) attorney and get a free consultation about your potential filing.

- Paul

Typo... I meant "using" their credit cards to pay their mortgage... though "suing" their credit cards sounds like a good idea too... maybe a Freudian slip?

- Paul