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Law Firm Sues, Wins TRO, Over State Ban on Unlicensed Legal Assistants

Posted Nov 16, 2009 1:48 PM CDT
By Martha Neil

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A law firm has won a temporary restraining order from a state court judge preventing Nevada officials from enforcing new mortgage modification rules that impact private legal practice.

Although Cogburn Law Offices supports efforts to protect consumers by regulating the loan modification industry, the Nevada Department of Business and Industry's mortgage lending division went too far when it set new rules requiring staff members working with lawyers on such matters to be licensed, obtain bonding and take continuing education classes, according to attorney Terry Coffing of Marquis & Aurbach, who is representing the Cogburn firm.

The rules not only extend beyond the intended reach of the state law they implement, he says, but interfere with private legal practice, reports the Las Vegas Sun.

The division apparently isn't pursuing any enforcement action against the Cogburn firm but has harmed it, the firm contends in a filing in the declaratory judgment action, by excluding the firm from a list of companies qualified to handle mortgage modification matters and refusing to deal with its staff.

Additionally, by providing this information to firm clients, the state "has harmed and will continue to harm Cogburn Law Offices as it provides false information to the public, misleads the public regarding the ability of Cogburn Law Offices to conduct activities related to loan modifications, short sales and deeds in lieu of foreclosures and significantly reduces the credibility and goodwill of Cogburn Law," the filing alleges.

The newspaper's request for comment from the state today didn't receive an immediate response.

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