Real Estate Attorney with THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY

This week the Florida Bar made public the outlandish and misleading representations that have recently plagued the mortgage modification industry in this state and probably nationwide.  The mortgage modification industry has sprung up faster than mushrooms - mostly through mortgage brokers that have seen their ability to make loans dry up in this recession and are applying net office sales techniques to the mortgage modification boom.  The problem is that many states have enacted new laws to put them out of business.

The situation is important enough that an "Ethics Alert"was issued by the Florida Bar on March 15th.

Typically, the mortgage modification firm - which often uses "net offices" just like in the good old lending days and are just where a sales person hangs out - will recruit an attorney to "watch" the modification process and they will advertise that there is an attorney "representing" the client's (the borrower's) interests.  Typical language is, "our attorney will represent you in the modification process and review all of your documents," or similar.  In reality the attorney does almost nothing or works under the direct control of a non-lawyer.

Florida passed a Mortgage Rescue Consultant law in 2008 (see now and many firms have sought to stay in the lucrative Florida mortgage assistance market by trying to skirt that law by using a letter opinion by the Florida Attorney General that exempts attorneys from work they doing in defending a client in a foreclosure.  The result however is a plethora of ethics violations for the lawyers that get involved and Unauthorized Practice of Law (UPL) violations for the mortgage modification firm if they give any type of legal service.

Usually these firms charge between $1,500 to $3,500 for modification services - the price is often set by the salesman (who is not an attorney).  The salesman gets an commission (anything above the set fee) and the attorney gets a nominal review fee - or something up to 10% of the total fee if special services are provided, such as using the attorney trust account to deposit the fee for clearance and then disbursement to the loan modification firm.  The Bar also issued an instructive articleon how one modification firm was prosecuted, saying, "Florida lawyers are being approached about working with nonlawyers offering foreclosure-related services to consumers, but the proposals present a veritable minefield of ethical problems."

Copyright 2009 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE  561 689 6660 - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  New Website  See our easy to find articles at Need Short Sale Information? - These Articles Probably Answer Your Question


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  1. Gabe Sanders 03/19/2009 06:26 AM
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William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Good for the Fla Bar!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Richard, thanks for the information.

We need to do more for the legitimate consumer and his counsel attorney at law or in fact, but we need to be careful we don't elimanate honest consumer help.

California has pretty much eliminated any real help.


Mar 17, 2009 10:44 AM #1
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

I see the Attorney General just filed suit against Wineberg Lopez & Rodriguez company.  They have been advertising all over TV and radio here in Orlando. Supposedly they charge $1995 upfront to assist you in getting a mortgage modification.  That sounds pretty dirty to me.

Mar 18, 2009 02:01 AM #2
Craig Chapman
Call Realty / Access Appraisals - Mesa, AZ
The Value Guy

I think if a legit firm is charging a fee to perform a real service they should be allowed to charge a fee w/o being referred to a sleazy.  In many cases the fee for a good loan mod is less than what someone would pay for a refi & they would be getting much more of a savings. Sounds like a deal to me. The only problem is finding the good companies amongst all the ones who are not so good.  Right now it seems like homework time. Check them out.

Mar 18, 2009 04:46 PM #3
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks Richard, great post.  The old adage is holding true, 'desparate times bring out some despicable people'

Mar 19, 2009 06:26 AM #4
Brien Berard
Remax Professionals Laurel MD - Laurel, MD
Maryland Real Estate Agents - Laurel Real Estate

I had a guy approach me about being a go-between loan mod person for him. It never got off the ground.  After reading this, I am glad it didn't.

Mar 23, 2009 08:35 AM #5
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

Thanks for posting. These predatory folks are a nightmare in California, too. They make a good pitch though. As a result, lots of folks go that route. Bummer. Thanks again for the info.



Mar 27, 2009 08:15 AM #6
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Richard Zaretsky

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