Mortgage modification — it might sound like a hot little area for a real estate lawyer who wants to augment a slow practice these days. Turns out, it isn’t likely to bring lawyers large sums of money, and can lead the uninitiated into hot water.
Fishkin tells it like it is on Tuesday
(Photo by Jason Doiy)
At least that’s how Walnut Creek legal ethics attorney Jerome Fishkin broke it down Tuesday at a lunchtime talk for members of the San Francisco Trial Lawyers Association. About 25 plaintiffs’ attorneys descended on the Bush Street conference room for pizza and advice on a number of topical ethics topics.
Fishkin, who defends practitioners in State Bar actions, said he has 10 active cases representing lawyers involved in mortgage modification work. A couple came from consumer complaints, a few others are advertising inquiries from the California State Bar. One is a lawyer swept up in an attorney general’s lawsuit against a company and anyone associated with it.
The ways Fishkin says lawyers get themselves in trouble:
- Because it’s hard to make a living doing mortgage modifications, lawyers tend to hire a lot of back-office staffers to do the work. That can lead to questions about letting unlicensed people practice law in their stead.
- Not paying attention to the geographical location of lenders and borrowers, and inadvertently practicing law in two or three states. If the borrower is in Nevada and the lender in California, and something goes wrong, the lawyer might get sued in Nevada.
- A whole host of regulatory agencies is watching. The Department of Real Estate has been harvesting names of any and all lawyers connected with mortgage modifications, which they pass indiscriminately to the State Bar. The Federal Trade Commission might also take interest, though Fishkin said he hasn’t seen that happen yet.
- Finally, even if a lawyer avoids the above pitfalls, there is always the danger of the super-autonomous back-office team. If they are running most of the show, they might just run off with your money, Fishkin warned.
In addition to his clients, Fishkin says he has a whole collection of Thank You notes from lawyers happy he talked them out of going into the business.
— Petra Pasternak