Sunday's issue brought Robert J. Shiller's Economic View column, How About a Stimulus for Financial Advice?, suggesting that the government subsidize personal financial counseling and that if it had done so years ago, the housing bubble would have been less severe. Along the way Shiller cites some recent papers on how many consumers are financially unsophisticated and how lenders take advantage of such consumers. Bob Tedeschi's Mortgages Column the same day, Loan Fraud Seen on the Rise, discussed a report by the Mortgage Asset Research Institute that says mortgage fraud has risen even while mortgage originations have fallen. An excerpt:
The report, released in early December, found that 36 percent of the fraudulent mortgage activity involved loan professionals’ misrepresenting borrowers’ incomes, while another 20 percent involved misrepresentations of borrowers’ employment.
* * *
Jennifer Butts, the Research Institute’s director of operations, said the survey results surprised her. Some industry executives had believed that the more unscrupulous mortgage brokers and loan officers had fled the industry or lost their jobs in the recent downturn, once lending standards tightened and loan volumes dropped.
“But we have people in the industry who didn’t get weeded out,” Ms. Butts said. “And now they have fewer transactions on which to make a profit, so they’re just a little more desperate.”
Last Thursday, January 15, the Times published Swindlers Find Growing Market in Foreclosures, about foreclosure rescue schemes. An excerpt:
Carol McClelland, 46, fell into foreclosure on her Chicago home when she lost her job as a waitress in two restaurants. She received a call from a company called Foreclosure Solutions Experts, promising to stop the foreclosure and lower her mortgage payments to around $550 a month, from $1,056, Miss McClelland said.
“She showed me other clients’ files, and they were paying $650 a month,” she said. The charge for the service was $1,300, which Miss McClelland paid in installments, borrowing the money from friends and relatives.
When the loan servicer notified her that the house was still in foreclosure, Miss McClelland said, the representative from Foreclosure Solutions Experts told her that the matter had been taken care of.
“She told me everything was all settled; I don’t have to worry about anything,” Miss McClelland said. “All I had to worry about was getting the rest of the money to her.”
According to a suit brought by the Illinois attorney general in November, Foreclosure Solutions Experts does little or nothing to help consumers, and when it does take action, the result is often a repayment plan unsuited to the borrower’s ability to pay. The suit alleges that the company never contacted Miss McClelland’s lender, HSBC.
On January 11, The Times ran a column by Andrew Martin, Inspecting Our Food: How Many Cooks?, arguing that it doesn't make sense to divide responsibility for food inspections between the Department of Agriculture and the FDA and discussing other problems in the food inspection system. Here is a report from January 9 about Citibank's willingness to support the stripdown amendment to the bankruptcy law.
Advocacy Group to California Bar Association, You Need To Look Harder at the Feldman Law Center
Los Angeles, CA A group of homeowners have joined together in solidarity in asking the California Bar Association to investigate the complaints against The Feldman Law Center over the last several years a little more thoroughly. The group, which is comprised of victims from all over the state who say they were swindled out of thousands of dollars believes that the Bar Association did no investigating at all.
According to the Better Business Bureau website, Feldman has managed to get himself an F – rating in less than two years. They also report that Feldman received a cease and desist from the New Mexico Attorney Generals Office. Even the California Bar issued their own Pro Active statement regarding Feldman last September as a service in the public interest. In the official Press Release, Chief Trial Counsel Russell Weiner states “It appears these attorneys may have significantly harmed their clients who were already facing great financial pressure and the possible loss of their homes.” Although the group has a variety of complaints, the one common thread is that they all feel Feldman didn’t do any work. According to the group, where there’s smoke there is fire.
This past week after members of the group have been waiting for up to two years or more for an answer from the California Bar, one of the members finally got an answer, in a letter from Investigator Sheila Campbell, “ … this office has concluded that the written evidence is not clear and convincing to prove that Mr. Feldman committed misconduct”. Another member of the group, a single mother from Northern California who has yet to hear from Ms. Campbell formally, says this seems highly unbelievable as she alone sent a ream of documentation to the investigator.
According to the Long Beach homeowner who received the letter, he also submitted a mass amount of evidence and the investigator Sheila Campbell called him several times to ask questions that were readily answered by reading the documents. “In our conversations, it was pretty clear that there was no investigation. - just a he said/she said between Feldman and myself, and I guess Feldman won.” stated the Long Beach resident. “She provided me with no evidence of any research or activity that we normally think of as an investigation. She hadn’t even contacted the Bank that holds my mortgage. Pretty much just took Feldman at his word. We even had provided her with leads on former Feldman employees who had given us full accounts of activities within the office that would be considered against the law”.
Another member of the group said that he had gotten fed up with waiting for the Bar Association and took matters into his own hands. “ I sued Feldman in Small Claims Court. I won by default as he never showed up.”
However, the group that has been a moral support group through email during these tough times decided that this was unacceptable. We feel an obligation to our fellow citizens, particularly those who have already been the victims of Predators. According to the Better Business Bureau, they have received complaints against Feldman as recently as April and seven in the month of February alone. They believe the Bar Association needs to demonstrate that an actual investigation took place if they want to remain credible. If the Bar Association can’t be trusted to keep their membership in line, then who can be trusted. We are seeking other victims and their stories to come forward so that the Bar has no choice but to re-open the investigation. Please send your stories to Feldman@JutsiceEnforcement.net . Your information will be held in strictest confidence and you will be contacted if you are needed to speak with Media or authorities.
Posted by: Mario | Sunday, June 20, 2010 at 03:22 PM
how can i now go after parsa law group can i do this thru the small claims court system or should i retain an atty which i can not afford at this time i cant get them to call me back and i dont know if they still have the same offices in costa mesa do i need to do a search for their address and can i go after their personal prop. via a lien of sometype
Posted by: ken moralez | Friday, October 23, 2009 at 11:35 AM
Here is something to consider. As a business owner I was suffering from a lack of operating capital. With all the fear of borrowing these days it was even difficult getting an operating advance from my bank. After much doubt and stress, I thought I would give a Business Cash Advance a go, and I was happy I did. With little approval time, and minimum requirements I was able to secure Business Funds within 7 days, and continue trading without worrying about the money.
Merchant Cash Advance
Posted by: Just7days | Thursday, August 27, 2009 at 07:39 PM
CONSUMER ALERT: Questions to Ask a Lawyer Before You Work With Them on Your Loan Modification
We already gave you a list of questions to ask a loan modification company before you work with them. Here is a list of questions to ask a lawyer who wants to "help you out with your serious legal issues that only a licensed attorney can do.”
Many lawyers (including James M. Parsa and Steven C. Feldman) are forming loan modification companies to circumvent the California Foreclosure Consultant Act (CFCA) because the text of the CFCA states that law firms that practice real estate law in their ordinary course of business are exempt from the CFCA rules. However, there are no attorneys working there which is misrepresentation as we will discuss in a future post.
Do not give out any information to anyone about you or your loan until you have confirmed the following information:
1. Are you the attorney that will be handling my case at the law firm of ____________? If no, ask to speak with the attorney that will be handling your case. If they say “No one is available right now but why don’t I just take down some preliminary information,” respond, “No, thank you. May I please leave a message for the attorney who will be handling my case?”
2. If the answer to #1 above is yes (or when “the attorney” calls you back), ask these questions and collect this information:
a. What is your full name? (Always ask them to spell it out for you and include middle names or middle initials.)
b. What is your California State Bar number? Is it in an active status?
c. Where did you graduate from law school?
d. What year did you graduate from law school? (This won’t be on the record, but it’s good to have so you can call the law school and confirm it later.)
e. What year were you admitted to practice law in the state of California?
f. Do you have any public records of disciplinary or administrative actions?
g. What is your experience in real estate law? If they say “none,” ask to speak to another attorney that has at least 5 years of experience.
h. At what law firms did you gain this experience? (Ask for the name and telephone number of the firm(s) with whom they worked on real estate matters.)
3. Then say, “Thank you, I will call you back after I have confirmed that all these facts are true. What is your direct dial telephone number?” Then go to the State Bar of California at: http://www.calbar.ca.gov/state/calbar/calbar_home.jsp and click on “Attorney Search” on the top of the right-hand column. Then click on “Attorney / Member Search.”
4. Type in the name of the attorney (don’t type in the Bar No. even though you have it because the entire “pretend law firm” could be giving out the same Bar No.) All of the names matching your attorney’s name will pop up. This is why (a) above is important as there may be multiple listings for the same name and you want to make sure you are pulling the correct record.
5. Click on the name of the attorney that matches the name you were given. Then, most of the information you previously gathered from the attorney will appear. Make sure the information is accurate and if it isn’t, make a note of the discrepancies on the license after you have printed it out and ask the attorney about them when you call back.
6. Then call the firms that the “attorney” has worked for to gain the requisite knowledge to help you save your house and negotiate on your behalf with a lender. Ask to speak with the law firm administrator, office manager or human resource manager as they are the people that maintain this kind of information. Confirm that the attorney worked there and for how long and the firm’s legal specialty.
7. If you want to be safe, you can call the law school and confirm that they graduated with a Juris Doctorate (JD) degree on the year you have written down.
8. If everything checks out, call the attorney back and make sure that he or she will be handling your case from start to finish and that you won’t be put off on to a foreclosure consultant. If the facts don’t check out, ask him or her about the discrepancies until you are satisfied with the answers.
9. Ask the attorney to describe the legal process of a loan modification and why it is necessary to use an attorney. (This will stump them but the good guys and gals will answer promptly and with good humor.)
10. Then insist on coming into the law firm, meeting the attorney and conducting your business in person from beginning to end.
Email us with any questions you may have. You’re going to have to be gutsy and persistent because most of these attorneys have very big egos and don’t like to be questioned. They will try to derail you or avoid your questions. Print this off before you call so you have a checklist in front of you and won’t get flustered.
Stand firm and get the answers you need to feel confident that your foreclosure matter will be handled by a professional.
Bad Biz Finder
Posted by: Bad Biz Finder | Monday, February 09, 2009 at 12:33 PM
CONSUMER FRAUD ALERT: Questions to Ask a Loan Modification Company / Foreclosure Consultant Before You Work With Them
Use this list of questions for loan modification companies, not law firms. We will give you another list for them.
1. Is your company licensed by the California Department of Real Estate? (Answer must be “yes”)
2. May I please have your company’s California Department of Real Estate license number? (After you hang up, look it up at www.dre.ca.gov – Click on the “Consumers” tab and then click on the link for “License Status Check.”)
3. Who is the Broker of Record? (When you print off their license information from #2 above, make sure this name shows up as “Designated Officer.”)
4. How long has your company been performing loan modifications under this license? (Check that on the print out as well.)
5. What is your company’s physical address, because I would like to come into your office to discuss my matter rather than to handle it over the phone or internet?
6. Who owns your company? May I please have that company’s address, telephone number and key contact information?
7. I understand that under The California Foreclosure Consultant Act you're not allowed to charge me upfront fees; so, I was wondering what the fee structure is for your services?
8. What is your company’s experience in real estate matters, specifically loan modifications?
Ask the person on the phone (foreclosure consultant):
9. What is your name and direct dial telephone number and/or extension number? (You don’t want to be lost in “toll free number hell” later on if they stop returning your calls.)
10. What is your specific experience in loan modifications?
11. Are you licensed by the California Department of Real Estate? (If yes, get their license number and repeat #2 above.)
12. Do you have a manager or someone that checks your work? If yes: May I please have that person’s name and direct dial telephone number?
13. Would you please email me a sample of your company’s contract? (Then check to make sure that it contains all of the elements we described earlier today in our post.)
If you get even two-thirds down this list without them hanging up on you I will be surprised. But this will separate the good companies from the scams.
Be safe out there and write to us about your experiences so we can share it with others that can benefit from it. Remember, pay it forward!
Bad Biz Finder
Posted by: Bad Biz Finder | Monday, February 09, 2009 at 12:01 PM
CONSUMER ALERT: Questions to Ask a Lawyer Before You Work With Them on Your Loan Modification
We already gave you a list of questions to ask a loan modification company before you work with them. Here is a list of questions to ask a lawyer who wants to "help you out with your serious legal issues that only a licensed attorney can do.”
Many lawyers (including James M. Parsa and Steven C. Feldman) are forming loan modification companies to circumvent the California Foreclosure Consultant Act (CFCA) because the text of the CFCA states that law firms that practice real estate law in their ordinary course of business are exempt from the CFCA rules. However, there are no attorneys working there which is misrepresentation as we will discuss in a future post.
Do not give out any information to anyone about you or your loan until you have confirmed the following information:
1. Are you the attorney that will be handling my case at the law firm of ____________? If no, ask to speak with the attorney that will be handling your case. If they say “No one is available right now but why don’t I just take down some preliminary information,” respond, “No, thank you. May I please leave a message for the attorney who will be handling my case?”
2. If the answer to #1 above is yes (or when “the attorney” calls you back), ask these questions and collect this information:
a. What is your full name? (Always ask them to spell it out for you and include middle names or middle initials.)
b. What is your California State Bar number? Is it in an active status?
c. Where did you graduate from law school?
d. What year did you graduate from law school? (This won’t be on the record, but it’s good to have so you can call the law school and confirm it later.)
e. What year were you admitted to practice law in the state of California?
f. Do you have any public records of disciplinary or administrative actions?
g. What is your experience in real estate law? If they say “none,” ask to speak to another attorney that has at least 5 years of experience.
h. At what law firms did you gain this experience? (Ask for the name and telephone number of the firm(s) with whom they worked on real estate matters.)
3. Then say, “Thank you, I will call you back after I have confirmed that all these facts are true. What is your direct dial telephone number?” Then go to the State Bar of California at: http://www.calbar.ca.gov/state/calbar/calbar_home.jsp and click on “Attorney Search” on the top of the right-hand column. Then click on “Attorney / Member Search.”
4. Type in the name of the attorney (don’t type in the Bar No. even though you have it because the entire “pretend law firm” could be giving out the same Bar No.) All of the names matching your attorney’s name will pop up. This is why (a) above is important as there may be multiple listings for the same name and you want to make sure you are pulling the correct record.
5. Click on the name of the attorney that matches the name you were given. Then, most of the information you previously gathered from the attorney will appear. Make sure the information is accurate and if it isn’t, make a note of the discrepancies on the license after you have printed it out and ask the attorney about them when you call back.
6. Then call the firms that the “attorney” has worked for to gain the requisite knowledge to help you save your house and negotiate on your behalf with a lender. Ask to speak with the law firm administrator, office manager or human resource manager as they are the people that maintain this kind of information. Confirm that the attorney worked there and for how long and the firm’s legal specialty.
7. If you want to be safe, you can call the law school and confirm that they graduated with a Juris Doctorate (JD) degree on the year you have written down.
8. If everything checks out, call the attorney back and make sure that he or she will be handling your case from start to finish and that you won’t be put off on to a foreclosure consultant. If the facts don’t check out, ask him or her about the discrepancies until you are satisfied with the answers.
9. Ask the attorney to describe the legal process of a loan modification and why it is necessary to use an attorney. (This will stump them but the good guys and gals will answer promptly and with good humor.)
10. Then insist on coming into the law firm, meeting the attorney and conducting your business in person from beginning to end.
Email us with any questions you may have. You’re going to have to be gutsy and persistent because most of these attorneys have very big egos and don’t like to be questioned. They will try to derail you or avoid your questions. Print this off before you call so you have a checklist in front of you and won’t get flustered.
Stand firm and get the answers you need to feel confident that your foreclosure matter will be handled by a professional.
Bad Biz Finder
Posted by: Bad Biz Finder | Monday, February 09, 2009 at 11:58 AM
IMPORTANT CONSUMER INFORMATION: It is Against the Law for Attorneys to Share Legal Fees with Non-Attorneys, a.k.a., Foreclosure Consultants
The California Rule of Professional Conduct 1-320 forbids attorneys from having financial arrangements with non-lawyers.
For example, if you retain Parsa Law Group or Feldman Law Center to handle your loan modification, it is mandatory that an attorney licensed to practice law in the state of California handles the matter from start to finish. That’s why it’s important for you to ask the questions we outlined in our last post.
Law firms cannot allow a foreclosure consultant to handle your loan modification. Foreclosure consultants are not attorneys and are not licensed to offer legal advice. Since the only income that law firms can legally collect are legal fees and the foreclosure consultant is paid a commission on the legal fees collected, then the law firm is guilty of sharing legal fees with a non-attorney.
Since the foreclosure consultants of for example, National Loan Modification Center (Parsa Law Group) and National Loan Modification Services (Feldman Law Center) are not licensed attorneys, they may also be prosecuted for practicing law without a license or possible charges of “capping” (which entails soliciting business for an attorney).
If you are signing a Legal Retainer Agreement, you must be working exclusively with an attorney on your loan modification. Do not hire a law firm that cannot provide you a California licensed attorney to work with from start to finish.
Bad Biz Finder
Posted by: Bad Biz Finder | Monday, February 09, 2009 at 11:54 AM
IMPORTANT CONSUMER INFORMATION: Even Attorneys Have Rules to Follow Regarding Advertising and Soliciting for Clients – Imagine That.
The California Rule of Professional Conduct 1-400 outlines the rules a lawyer / law firm must abide by when advertising or soliciting clients. A communication or solicitation CANNOT:
1. Contain any untrue statement.
2. Contain any matter that is false, deceptive, or which could confuse, deceive, or mislead the public.
3. Omit to state any fact necessary to ensure that an attorney / law firm is not misleading the public.
4. Fail to indicate clearly, expressly, or by context, that it is a communication or solicitation.
5. Be transmitted in any manner which involves intrusion, coercion, duress, compulsion, intimidation, threats, or vexatious or harassing conduct.
6. State that an attorney / law firm is a “certified specialist” unless the attorney / law firm holds a current certificate as a specialist issued by the Board of Legal Specialization of the State Bar.
From what Bad Biz has seen in the last three months that applies to EVERY loan modification ad ever printed. We have yet to find a law firm that advertises loan modification services that actually has attorneys working at the firm.
The following constitute violations of Rule 1-400. It seems like the law firm / loan modification attorneys used this as a guide to PREPARE their advertising!
Any communication which:
1. Contains guarantees, warranties, or predictions regarding the result of the representation.
2 Contains testimonials about or endorsements of an attorney / law firm unless such communication also contains an express disclaimer such as “this testimonial or endorsement does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.”
3. Is delivered to a potential client whom the attorney / law firm knows or should reasonably know is in such a physical, emotional, or mental state that he or she would not be expected to exercise reasonable judgment as to the retention of counsel.
4. Is transmitted at the scene of an accident or at or en route to a hospital, emergency care center, or other health care facility.
5. Seeks work for the attorney for legal fees transmitted by mail or other means unless it has the word “Advertisement,” “Newsletter” in at least 12 point font print on the first page. Even the envelope must contain the above words.
6. States or implies a relationship between an attorney in private practice and a government agency or public or non-profit legal services organization.
7. States or implies that an attorney has a relationship to any other member or a law firm as a partner or associate, or officer or shareholder unless such relationship in fact exists.
8. States or implies that an attorney or law firm is “of counsel” to another member or a law firm other than as a partner or associate, or officer or shareholder which is close, personal, continuous, and regular.
9. States or implies inconsistent information used by an attorney or law firm in private practice at the same time in the same community.
10. Implies that the attorney or the attorney’s firm is participating in a lawyer referral service which has been certified by the State Bar of California or as having satisfied the Minimum Standards for Lawyer Referral Services in California, when that is not the case.
11. States or implies that a member is a “certified specialist” unless such communication also states the complete name of the entity which granted the certification as a specialist.
12. Advertising primarily used to seek work for legal fees transmitted to the general public by mail, television, radio, newspaper, magazine or other form of commercial mass media which does not state the name of the attorney responsible for the communication.
13. Contains a dramatization unless such communication contains a disclaimer which states “this is a dramatization.”
14. States or implies "no fee without recovery" unless such communication also expressly discloses whether or not the client will be liable for costs.
15. States or implies that an attorney / law firm is able to provide legal services in a language other than English unless the attorney / law firm can actually provide legal services in such language or the communication also states in the language of the communication.
16. Is unsolicited communication transmitted to the public to get work for an attorney for legal fees that states a specific fee or range of fees for a particular service and then charges a greater fee within a period of 90 days following the advertising (unless the ad expressly specifies a shorter period of time regarding the advertised fee).
Bad Biz Finder
Posted by: Bad Biz Finder | Monday, February 09, 2009 at 11:52 AM
Woops, we created a typo in our Wordpress blog address. It should be http://badbizfinder.wordpress.com
Posted by: Bad Biz Finder | Friday, February 06, 2009 at 02:43 AM
Hi Elaine,
We don't know what state you are in and can only speak to California law. The California Foreclosure Consultant Act (California Civil Code Section 2945-2945.11) lays out the rules and regulations of the venture you are hoping to start.
Are you licensed by the California Department of Real Estate? All loan modification companies and/or consultants must be licensed by the CA DRE. You cannot simply be an unlicensed independent contractor as you mentioned in your post. Also, you can legally only be paid for your services if you are successful in modifying a loan. UP FRONT FEES (as you mentioned) are strictly forbidden.
In July of 2009 all loan modification companies will be answering to the Department of Justice pursuant to Assembly Bill No. 180 - see my post above.
You may want to steer clear of this prospective new venture because it is really a mess right now. Check out our blog at http://badbizfinder.wordpress.com to learn practically everything you might want to know about California loan modifications. If you are in a different state, the above information may not apply to your situation; so, please check into your own state's laws.
We are a consumer advocacy group called Bad Biz Finder and this is our current cause: To be a source of unbiased, objective facts to empower consumers to be aware of the laws surrounding their foreclosure so that in their vulnerable state, they are not harmed.
Best to you,
Bad Biz Finder
http://badbizfinder.wordpress,com
badbizfinder@aol.com
badbizfinder@gmail.com
Posted by: Bad Biz Finder | Friday, February 06, 2009 at 02:41 AM
I'm confused. I was asked to set up a loan modification service, which since I have handled my own 8 modifications, and 3 for family, I realize the actual details, time involved, and process of the negotiations.
I would like to assist (yes of course with compensation for servicing) and I have over 20 years handling lenders as my clients. I've also managed volume accounts and can streamline the entire process for this company/partnership which I am weighing out options at this time.
I am confused in knowing the correct way to legally set this up to assist the homeowners that are overwhelmed with the process and truly are wanting help in modifying their loans. My intentions are good. I do not look to be misleading/nor to take advantage on any level.
The company will be hiring me as Independent Consultant, also including my expertise in appraisal, due to the latest trend of writing down to market value - which I am capable of streamlining the process as well.
I want to handle all my transactions with care and integrity, and am looking to make sure their are no violations in any codes which would limit my ability to assist the homeowners.
I have consulted, and still consulting different views from attorneys, brokers, DRE, and those already handling modifications as their business.
I would like details to know the best way to cover all the legal details, such as if we DISCLOSE all fee's for each item handled, and what the fee's are covering: such as 225. for Attorney reviewing files for any violations - 1200. for servicing, such as all correspondence and conversations to obtain the modification, 750. for advertising costs, and marketing and tracking systems, along with all the disclosures, "right to cancel" contract for upfront fee's, which will be held in trust account until the modifications are completed. ETC
What part if any, would be OPEN TO any liability - if we were disclosing ALL DETAILS UPFRONT ? And, do you have suggestions of the "right" way to do business, as I keep only hearing vague descriptions of all the wrong ways - yet nobody talks specifics on these sites.
It seems a legitimate interest in the business dealings for handling foreclosures should be allowable under the current law, as for years processers for loan brokers needed no additional license - and it seems processing a loan rewrite is mostly on the lenders for they are the ones producing the actual language in the mod, and if we have a Broker on record, an attorney to assist in reviewing files, and a full staff to make the loan modification benefit the borrowers - then where is the area's of weakness in this plan ?
Please assist me in knowing. Thanks!
Posted by: Elaine Michaels | Friday, January 30, 2009 at 12:03 PM
PARSA LAW GROUP IS BREAKING THE LAW BY SHARING LEGAL FEES WITH EMPLOYEES OF NATIONAL LOAN MODIFICATION CENTER THAT ARE NOT ATTORNEYS
Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
The Rule of Professional Conduct 1-320 forbids attorneys from having financial arrangements with non-lawyers. This means that if Parsa Law Group is retained to handle a loan modification on your behalf, it is mandatory that an attorney licensed to practice law in the state of California under the employ of Parsa Law Group is handling the matter directly.
This is not the case at Parsa Law Group. When you call Parsa Law Group or National Loan Modification Center (sponsored by Parsa Law Group), your matter is being handled by a foreclosure consultant that is not an attorney licensed to practice law in the state of California. National Loan Modification Center cannot benefit financially from legal retainer fees collected by Parsa Law Group. But that's what they're doing by paying commissions to non-attorneys off "legal retainer fees" collected.
Since the employees of National Loan Modification Center are not licensed attorneys, they may be prosecuted for practicing law without a license or possible charges of “capping” (which entails soliciting business for an attorney) and attorney James Mazi Parsa, owner of Parsa Law Group and National Loan Modifcation Center will be disciplined for sharing fees with non-attorneys.
To circumvent the California Foreclosure Consultant Act, California Civil Code Section 2945, which prohibits loan modification companies from collecting advanced fees, National Loan Modification Center (sponsored by Parsa Law Group) decided it would collect "legal retainer fees" instead. They thought they would not get caught because the California Foreclosure Consultant Act states that attorneys that practice real estate law in the ordinary course of business are exempt from the rules of this Act. But they forgot about that darn sharing attorneys fees thing, or so they would like you to believe.
So, before you sign anything or even give over any information to National Loan Modification Center or Parsa Law Group, ask to speak with the attorney that will be handling your case. If you actually speak with someone, ask him/her the following questions:
1. What is your full name?
2. What is your California State Bar number?
3. Where did you graduate from law school?
4. What year did you graduate from law school?
5. What year were you admitted to practice law in the state of California?
6. What is your experience in real estate law?
(Ask for the name and telephone number of the firm they worked for.)
7. Are you currently an attorney member of the law firm of Parsa Law Group?
Then say, “Thank you, I will call you back after I have confirmed that all these facts are true.” Then go to the State Bar of California website at www.calbar.org and click on Attorney Search. Type in the name of the attorney and verify that all the information gathered from questions 1-5 is accurate.
Now, there are many attorneys with the same name, so make sure you ask for middle initials, middle names or how their name is stated at the State Bar of California.
Then call the firms that the “attorney” has worked for to gain the requisite knowledge to help you save your house and negotiate on your behalf with a lender. Find out if the attorney worked at that law firm and for how long.
Let us know how it turns out. Be safe and be empowered by knowledge that can save your house and your wallet.
Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
Posted by: Bad Biz Finder | Saturday, January 24, 2009 at 07:31 PM
WHO IS BAD BIZ FINDER AND WHY ARE THEY CLOGGING OUR BLOG ABOUT LOAN MODIFICATION SCAMS IN CALIFORNIA?
By Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
Loan modification scams have reached an all-time high in California. And Bad Biz Finder is reporting about it at Wordpress.
We welcome you to review the blogs at www.badbizfinder/wordpress.com
There is a trend developing where law firms are "sponsoring" loan modification companies to circumvent The California Foreclosure Consultant Act, Civil Code Section 2945-2945.11.
They believe that by asking their customers to sign "law firm retainer fee agreements," that they are exempt from the Act and don't have to be licensed by the California Dept. of Real Estate or follow strict guidelines set forth in the Act.
However, these "law firms" have no attorneys; the work is being performed by foreclosure consultants, and consequently, the law firms are breaking the law by sharing legal fees with non-attorneys since the only revenue to the "law firm" is legal retainer fees.
It is a gigantic fraud and very complex but we are unraveling it for our most vulnerable consumers today on our blog and since January 9 have had over 1000 hits. We have been tracking about 56 companies since November in Orange County, San Diego County, Los Angeles County, Riverside County and San Bernardino County.
We made an example of Parsa Law Group and National Loan Modification Center as they were one of the first companies we received complaints about and to date seem to be the most egregious. Beginning in the first month of February we will begin releasing the evidence we have collected on other companies but we wanted to set a foundation of facts prior to that time so consumers could put the scams in 1 of 2 categories:
1. Loan modification companies not in compliance with The California Foreclosure Consultant Act; or
2. Loan Modification firms posing as law firms to circumvent The California Foreclosure Consultant Act.
Bad Biz Finder is a non-profit anonymous consumer advocacy organization based in Fremont, California with chapters all over the state. By the end of February we will have a location in Orange County to handle the overwhelming demand we are facing with this cause.
We hold true one singular mission: To offer consumers a source of unbiased facts vital to making informed decisions about everyday issues facing them everyday.
The organization seeks to unearth unethical, illegal and unconscionable practices by individuals, businesses, and organizations and sets the record straight so those who have been harmed have a remedy and those who have not are warned.
Its roots go back to the 1980s when the founder began to become vocal about the vulnerability of consumers and the companies, individuals and agencies that preyed on this vulnerability. Over the past three decades, Bad Biz Finder has championed hundreds of causes and has been an agent for positive change so that the so-called “little guy,” becomes a giant with purpose and power.
Since the late 1980s due to the constant and unnerving legal and personal threats against the organization and its volunteers, Bad Biz Finder has moved locations, changed names, added volunteers and consumer rights attorneys to better serve the public. It is for these reasons that it prefers its anonymity and maintains a simple email address badbizfinder@aol.com.
Bad Biz Finder is self-supporting and asks for nothing in return. Not one day goes by that the organization has not helped scared and hopeless consumers gain footing again, armed with facts that empower them, and for that we are proud.
We do not accept payment, donations, or gifts. In order for our work to be effective, we must be free of bias and completely objective. We simply ask the people we help to "pay it forward," and help someone else for free that is in perhaps the same dire straits they once were and pass along our name as a trusted resource.
By Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
Posted by: Bad Biz Finder | Saturday, January 24, 2009 at 07:26 PM
Contract Requirements under the CA Foreclosure Consultant Act - Parsa Law Group and NLMC NOT in Compliance
By: Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
Section 2945.3 of the California Foreclosure Consultant Act (also known as California Civil Code Section 2945.3) defines the required elements of a contract between a customer and a loan modification company (foreclosure consultant).
Of course, since Parsa Law Group / National Loan Modification Center represents itself as a law firm, they don’t believe that this applies to them. But, oh, it does.
Last week we posted the current “Legal Retainer Agreement” that Parsa Law Group is using to engage clients in loan modification services. You might want to look at that agreement alongside the following requirements and see if they match. Okay, we’ll save you the time – they don’t.
1. It must specifically state the services that will be performed by the foreclosure consultant and the total amount to be paid for these services.
2. The following text (“Notice”) must be included in the contract directly following the services and fees section as described in #1 above. The Notice must include the name of the foreclosure consultant typed into the contract [we inserted National Loan Modification Center] and this Notice must be typed in at least a 14-point font:
“NOTICE REQUIRED BY CALIFORNIA LAW: National Loan Modification Center (sponsored by Parsa Law Group) or anyone working for the company CANNOT (1) Take any money from you or ask you for money until National Loan Modification Center (sponsored by Parsa Law Group) has completely finished doing everything it has said it would do; and CANNOT (2) ask you to sign or have you sign any lien, deed of trust, or deed.”
3. The contract language used must be consistent with the language that the foreclosure consultant uses to describe its services or to negotiate the contract from one client to the next.
4. The contract must be signed and dated by the homeowner and shall contain the following two sentences immediately below the signature line in a size equal to the font of the contract (or at least 10 font size) and in boldface type:
"You, the owner, may cancel this transaction at any time prior to midnight of the third business day after the date of this trasaction. See the attached notice of cancellation form for an explanation of this right."
5. On the first page of the contract (in a size equal to the font of the contract (or at least 10 font size) the contract must state the name and address of the foreclosure consultant to which the "Notice of Cancellation" must be mailed and the date the homewoner signed the contract.
6. The contract must have a “Notice of Cancellation” form attached to it in duplicate that is removable from the contract and the text for the form must be in a size equal to the font of the contract (or at least 10 font size) as follows:
NOTICE OF CANCELLATION
______________________________
Date of the Transaction
You may cancel this transaction, without any penalty or obligation, within three business days from the above date. To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice, or any other written notice, or send a telegram to NATIONAL LOAN MODIFICATION CENTER [name of foreclosure consultant] at 3200 Park Center Drive, Suite 1110, Costa Mesa, CA 92626 [address of foreclosure consultant’s place of business] NOT LATER THAN MIDNIGHT OF _______________________ [insert the date that represents three business days from the “Date of the Transaction” entered above.]
I hereby cancel this transaction.
Date of Cancellation: ________________________
___________________________________________
Name and Signature of the Homeowner
7. The foreclosure consultant must give the homeowner a copy of the contract and the attached notice of cancellation and until the foreclosure consultant has done this, the homeowner may cancel the contract.
8. After sixty-five (65) days have gone by after a foreclosure sale, the foreclosure consultant may enter into a separate contract with the homeowner to help them with the release of any surplus funds remaining after the foreclosure sale. However, prior to entering into that separate contract, the foreclosure consultant must give the homeowner a Notice in 14-point boldface type as follows:
NOTICE TO OWNER
____________________ ________________________
Date of Contract Date Signed by Owner
____________________________
Date of Foreclosure Sale
You may be entitled to receive all or a portion of the surplus funds generated from the foreclosure sale of your real property located at: _______________________, California on __________________ [Date of Sale] without paying any fees or costs of any kind to a third party.
You should check directly with the trustee or beneficiary who conducted the foreclosure sale of your property to determine the name, address, and telephone number of the party to whom you can direct inquiries regarding filing a claim for surplus funds without paying a fee to a third party.
No person or entity may require you to enter into any agreement requiring the payment of a fee to that person or entity in order to receive the surplus funds from the foreclosure sale to which you may be entitled during the 65 days after the date of the trustee's sale.
9. A receipt must be executed by the homeowner and the company and notarized acknowledging a copy of the notice set forth above.
Please, folks, use this to compare the contract a loan modification company is giving you to sign. A good rule of thumb is never sign a contract on the spot. Tell the foreclosure consultant that you would like to take it home to read it carefully.
Don't say, "I want to show it to my attorney." We always encourage as many qualified opinions as possible. Just don't say it to Parsa Law Group / National Loan Modification Center; you may never get a return phone call. Which, actually, is a good thing.
Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
Posted by: Bad Biz Finder | Saturday, January 24, 2009 at 07:21 PM
Would Someone PLEASE Explain To Me The CA Foreclosure Consultant Act, Like I'm a Third Grader?
By Bad Biz Finder: http://badbizfinder.wordpress.com
Don’t you just hate it when legislators write laws in such a way that the folks they are trying to protect can’t understand them?
And the text of the law sends you on a wild goose chase by not giving you all the information you need right there? For example, The California Foreclosure Consultant Act in defining what a foreclosure consultant is NOT, says, “A person licensed under Part 1 of Division 4 of the Business and Professions Code.”
Now you have to go look up Part 1 of Division 4 of the Business and Professions Code to know what they’re talking about. That is, if you even know where to find the Business and Professions Code. It makes Bad Biz Finder, MAD Biz Finder.
Do you think that this practice is due to the fact that those legislators are so dang brilliant that they think, write and talk on a plane above everyone else? Nope.
It’s a deliberate method to confuse you and discourage you from suing the pants off violators of the law. Bad Biz Finder has been encouraging you to read The California Foreclosure Consultant Act so you can understand your rights under the law. Our bad. We should have explained it to you long ago.
We’re going to break this sucker down into plain English so you can truly UNDERSTAND your rights. If you are bi-lingual and can help someone with a translation, we would sure appreciate it. As the text is long, we will post explanations of each of the subsections into different blogs.
California Civil Code Section 2945:
California lawmakers found that foreclosure consultants have a significant impact on the economy of this state and on the welfare of its citizens.
They also realized that an impending foreclosure could cause California homeowners to panic and make irrational decisions based on fear.
And that homeowners needed to be protected from predatory business practices that would prey on their vulnerabilities leaving them subject to fraud, deception, harassment, and unfair dealing by foreclosure consultants.
The intent and purposes of The California Foreclosure Consultant Act are summarized in five categories.
1. To require that foreclosure consultant service agreements be expressed in writing;
2. To safeguard the public against deceit and financial hardship;
3. To permit rescission (cancellation) of foreclosure consultation contracts;
4. To prohibit representations that mislead;
5. To encourage fair dealing in the rendition (offering) of foreclosure services.
To accomplish their mission, legislators also looked at the following facts while writing the law:
- Foreclosure consultants represent that they can assist homeowners who have defaulted on obligations secured by their residences. These foreclosure consultants, however, often charge high fees, the payment of which is often secured by a deed of trust on the residence to be saved, and perform no service or essentially a worthless service.
- Homeowners, relying on the foreclosure consultants' promises of help, take no other action, are diverted from lawful businesses which could render beneficial services, and often lose their homes, sometimes to the foreclosure consultants who purchase homes at a fraction of their value before the sale.
- Vulnerable homeowners are increasingly relying on the services of foreclosure consultants who advise the homeowner that the foreclosure consultant can obtain the remaining funds from the foreclosure sale if the homeowner executes an assignment of the surplus, a deed, or a power of attorney in favor of the foreclosure consultant.
- This results in the homeowner paying an exorbitant fee for a service when the homeowner could have obtained the remaining funds from the trustee's sale from the trustee directly for minimal cost if the homeowner had consulted legal counsel or had sufficient time to receive notices from the trustee regarding how and where to make a claim for excess proceeds.
If this was helpful look at our next blog about the contract requirements of a foreclosure consultant.
Bad Biz Finder
badbizfinder@aol.com
http://badbizfinder.wordpress.com
Posted by: Bad Biz Finder | Saturday, January 24, 2009 at 07:12 PM