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Hard to hire an attorney in California for modification help

Posted in California

See what Martin Andelman has to say about how hard it is to hire an attorney for modification help in California. This is a tricky business. Consumers who represent themselves often get a good modification. However, there a lot of pitfalls, such as knowing when you can reapply for a Making Home Affordable modification and when you can’t. I encourage bankruptcy attorneys to do more modifications. The attorney fees I charge are typically less than what a mortgage company would charge for a refinance but the interest rate is a lot...

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FTC Wants To Prohibit Up-Front Fees

Posted in Bankruptcy, California, Federal Trade Commission, Modification is the Practice of Law, Mortgage Modification

The Federal Trade Commission is up to no good. The FTC proposes to enact a regulation which will prohibit third-party modification providers, including attorneys, from charging advance fees. See: http://www.ftc.gov/opa/2010/02/mars.shtm for a summary of the proposed regulation. See http://edocket.access.gpo.gov/2010/2010-4651.htm for the full text of the proposed regulation. California passed a law forbidding all up-front fees on mortgage modifications, including fees paid to attorneys. For the full text of the California law, see http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0051-0100/sb_94_bill_20091011_chaptered.html. There is no other area of law practice where clients are prohibited from paying their lawyers in advance. What has happened in California is that attorneys have stopped providing modification services in most cases. The way attorneys have sidestepped the law is to file suit against each lender they are negotiating with. The California law does not prohibit advance fees when litigation is involved. This raises the cost...

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