It is bad enough that most people facing foreclosure who reach out to our law firm have been badly mistreated by their banks, but over the last few weeks it seems like almost every new client who has called us has also been victimized a second time by a predatory loan modification mill or out of state law firm making illusory promises to stop an Ohio foreclosure and obtain a loan modification.
Several of these well meaning clients find themselves on the brink of a Sheriff’s Sale only to learn that these firms they have been paying are not licensed to practice law in Ohio and therefore can do nothing to “Stop a Foreclosure” as they promise and do nothing more than pass the homeowner’s paperwork onto a loan servicer without providing any advice or expertise that adds any value whatsoever to likelihood of obtaining a loan modification.
Apparently this is happening all over the country. Last month Federal and State Regulators intiated “Operation Mis-Modification” cracking down on firms that took large upfront fees and guaranteed results. The Director of the Consumer Finance Protection Bureau Richard Cordray had this to say about these operations:
“These companies pocketed illegal fees, taking millions of hard-earned dollars from distressed consumers, and then left those consumers worse off than they began,” said Richard Cordray, the bureau’s director. “These practices are not only illegal, they are reprehensible.”
The CFPB issued an advisory with specific advice about what people looking for help when facing foreclosure should look for and look out for.
Just last week my friend Martin Andelman reported in his blog Mandleman Matters that several State Attorneys General took action against lawyers promotion “Mass Joinder” lawsuits taking millions from homeowners who they fooled into thinking were part of a class action.
We are doing our part. For our clients who have been scammed by modification mills or out of state lawyers we are bringing lawsuit under Ohio’s strong Consumer Protection Laws on their behalf and stepping into their Ohio state court proceedings raise issue when possible to slow or stop foreclosure efforts. We are counseling our clients on new Federal Law Protections that make loan servicers more accountable in the loan modification process and can work to keep homeowners in their homes.
Sadly once burned, homeowners who need legal representation the most are twice shy about retaining experienced aggressive local lawyers to bring the necessary motions and raise appropriate arguments in court and to create real leverage to get loans modified or who can counsel those homeowners about bankruptcy options that allow them to stay in their homes.