Published On: July 25, 2014

Litigation against law firms, greedy attorneys, affiliated companies and others that claimed to perform work on behalf of homeowners struggling to pay their mortgages.

The other day a caller said “I used a document preparer or bankruptcy petition preparer. Certainly they have obligations to keep my social security number confidential?” Unfortunately I had to say “Oh how wrong you are.”

Bully tactics used to scare or coerce buyers.

According to the American Bar Association Journal Federal agencies and 15 states have announced a wave of litigation against law firms, greedy attorneys, affiliated companies and others that claimed to perform work on behalf of homeowners struggling to pay their mortgages.  The states involved in the enforcement sweep are Arizona, Delaware, Florida, Indiana, Illinois, Kansas, Louisiana, Maryland, Michigan, New Mexico, New York, North Carolina, Ohio, Washington and Wisconsin.

“The defendants disguised their false promises of foreclosure relief for struggling homeowners with claims that they were performing legal work.”

Think about the information you are giving this stranger: all your financial information, your children’s names, bank accounts and your social security number. You do this without the slightest guarantee that the information will be kept safe.

Common themes in the 41 suits (the CFPB filed three, the FTC six and states another 32, the NLJ says) are upfront fees charged to homeowners, with little or no meaningful work allegedly provided to them in return.  “The defendants disguised their false promises of foreclosure relief for struggling homeowners with claims that they were performing legal work,” says the CFPB. “These tactics are used by foreclosure relief scams to attract victims, add credibility to their schemes, or exploit certain legal exemptions for the practice of law.”

According to http://www.ladanlaw.com/orlando-criminal-defense-attorney, such upfront fees are banned by the a federal consumer-protection rule initially adopted by the Federal Trade Commission that is now known as “Regulation O,” the plaintiffs say. They also accuse defendants of misrepresenting to homeowners the mortgage-relief services and benefits they would get for their money.

Additional article from Huffington Post

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Note from Diane – never rely on the representations of others who profess that they can “help” you out of your problems; even if those people of lawyers. Always do your own investigation about the options, critically look at their promises, check out that person’s reputation and then make an informed decision.  If it appears to be too good then it probably is.  Here is a consumer advisory from the CFPB

The next wave of scams is the short sale programs. Homeowners do not realize the potential liability they may face when entering into a short sale. They must obtain quality legal advice and competent tax advice before making that decision. Each state has different laws that may protect the homeowners. Short sales may waive those protections.

Do not assume that a lawyer is licensed; check them out with the state bar where they are licensed.  Here is the link to the State Bar of Arizona.

By |Published On: July 25th, 2014|Last Updated: May 29th, 2022|

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About the Author: Diane Drain

Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.

*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*

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“You folks are the BEST OF THE BEST in Arizona.” M.H.

You and Jay are the best attorneys I have ever had or needed and thank God for the Honorable Robert Gottsfield in recommending you folks – I would have never made it through the entire process without you and Jay and God Bless you both always and stay in touch as well. You folks are the BEST OF THE BEST in Arizona.

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I can’t say enough good things about Diane. The way she handled my not typical circumstances was amazing. I was very nervous to start the bankruptcy process but Diane just has a very comforting way of explaining the whole process. My only regret is that I didn’t find Diane sooner. If you find yourself in a financial situation that you can’t correct on your own, please Call Diane Drain as soon as possible.

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Filing for bankruptcy can be a stressful life event, and selecting the right attorney can add to this stress. Diane and Jay were a pleasure to work with, and it is obvious that they are passionate about helping people get their life back on track. I would highly recommend them if you need a bankruptcy attorney.

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