Lawyers and Mortgage Scams
HandelontheLaw.com Staff Writer
The financial crisis has encouraged “mortgage assistance” scam artists who prey on homeowners desperate to save their homes from foreclosure. Some scammed individuals call to report the fraud. According to an analysis of the Homeowners’ Hope Hotline (HHH), since 2010 more than 40,000 homeowners have complained of being scammed.
“Mortgage assistance” scams by lawyers or people falsely claiming to be lawyers are apparently the costliest and most widespread. The data of the HHH has been analyzed by the Lawyers’ Committee for Civil Rights Under Law, which found that complaints against scams by lawyers rose from about 40% in 2010 to about 60% in 2013 and that the average loss was approximately $3,600 or $800 more than losses from other scams.
The most notorious example to date is that of the Hoffman Law Group in Palm Beach, FL, which reportedly solicited business from broke, desperate homeowners by stating that the law group would sue banks and request compensation for mortgage abuses with a high probability of success. Clients supposedly had to pay $6,000 up front and $495 per month to be represented by the firm. The firm did file at least 32 lawsuits but the complaints were written in almost identical language with virtually no details about the plaintiffs, which doomed the suits from the start. Nearly all the suits have been dismissed or were withdrawn by the Hoffman Law Group.
According to the FTC, lawyers can require upfront fees only if: they’re licensed to practice law in the state where you live and your house is located; they provide you with real legal services; they’re complying with state ethics requirements; they put the money in a client trust account, withdraw fees only as actual legal services are provided and notify you of each withdrawal.
DO’S AND DON’TS
DO read additional information about getting help, avoiding mortgage scams and/or report any mortgage scams on the Homeowner’s Hope Hotline web site here: http://www.995hope.org/
DO carefully check out the qualifications of any lawyer before retaining him/her.
DO realize that “if it sounds too good to be true, it probably is.”
DON’T pay an upfront fee for a lawyer’s assistance in mortgage relief unless he/she meets all the FTC requirements listed above.
By Kathy Catanzarite
Note from HandelontheLaw.com: This article is to be used as an educational guide only and should not be interpreted as a legal consultation. Readers of this article are advised to seek an attorney if a legal consultation is needed. Laws may vary by state and are subject to change, thus the accuracy of this information can not be guaranteed. Readers act on this information solely at their own risk. Neither the author, handelonthelaw.com, or any of its affiliates shall have any liability stemming from this article.
LEGAL MALPRACTICE DOS AND DON'TS