Costa Mesa, Newport Beach and Orange County homeowners watch out!  I hate to shock any readers, but there are some unscrupulous attorneys out there.  As in any profession or large employment setting, a few bad apples can ruin otherwise high professional standards.  There have been an alarming number of loan modification and/or foreclosure prevention scams, and complaints to the California State Bar are at an all-time high.  There are many companies and individuals out there making bold promises to assist underwater borrowers and those facing foreclosure, and often, an attorney or law firm is involved to add an appearance of legitimacy.  People have gone to jail, but that’s not stopping the scammers.

Here’s the overview of a current popular scam (this is NOT limited to attorneys):  You, the homeowner, are facing foreclosure.  You receive a mailer, flyer, phone call or some other solicitation promising to halt the foreclosure, obtain a loan modification, or otherwise resolve all your problems.  You pay this company or individual an upfront fee (often a few thousand dollars) and are told to stop making your mortgage payment.  Perhaps they offer to negotiate for you, or simply file a sham bankruptcy proceeding to stall the foreclosure.  Yet, you never hear from them again and/or are told (months later) they tried their best and could not help.

Since February 2009, the California State Bar has disciplined 121 attorneys and disbarred 28 surrounding complaints of loan modification fraud.  Another 69 attorney’s have disciplinary proceedings pending before the State Bar, while at least 289 other matters are being actively investigated.  However, that’s a mere fraction of the nearly 12,000 complaints received by the California State Bar in that time.

Unfortunately, every time an operation such as this is shut down, another pops up in its place, and this is certainly not limited to attorneys.

What to do?
If you are an underwater borrower or facing foreclosure and seeking professional assistance, the following will help, but always remain vigilant:

• Foremost, try yourself.  Contact your lender and attempt to start a dialogue, at least get some information.  Read some articles (like this one) and educate yourself as to your rights (which vary greatly state by state).   
• NEVER use services based off a solicitation (i.e. phone call, mailer, flyer, etc.).  Lawyers are generally prohibited from solicitations. 
• NEVER pay any up-front fees.  Lawyers are generally prohibited from accepting up-front and non-refundable fees for future services (especially in any large amount, promising future work).  “Deposits” or “Retainers” are allowed, with proper written documentation, but not earned and/or non-refundable fees.  
• NEVER believe any promisses or guarantees.  Lawyers are generally prohibited from making promisses or guarantees.  If anyone makes you a promise or guarantee, especially a lawyer, walk away.  
• ALWAYS use your common sense.  If something sounds too good to be true, if often is.
• If you are seeking professional assistance, seek a referral from a friend, family member or colleague (there is no embarrassment here; many, many people are in your position, ask for help, start a dialogue).  Try to find someone you know has helped someone else.  
• Absent a direct referral, check with your local bar association (each county has one), they often have free referral services. 
• In any event, do your homework and be cautious.  Google the company, attorney, etc.  Look them up on the State Bar’s website, check out social media reviews, etc., etc.  

Other helpful info: