Lawyers Testify About Ethics Qualms in Hearing on Mortgage Modification Law Firm
Posted Dec 3, 2010 8:42 AM CST
By Debra Cassens Weiss
Lawyers who worked for a now-shuttered New Hampshire law firm that got into the mortgage modification business told of their ethical qualms in a hearing Thursday into alleged legal violations.
Assistant attorney general Karen Gorham is alleging that lawyer Dan Dargon ran “a loan modification mill,” the Concord Monitor reports. The Dargon Law Firm got into the practice last year, she said during the banking hearing, after spending $100,000 on leads that gave him mortgage information leading to potential clients.
The state banking department says Dargon's firm charged $2,500 up-front for loan modifications, but failed to obtain the necessary license, according to WMUR.com. He is accused of violating the law on 108 occasions. Dargon maintains the state banking department has no authority to regulate lawyers.
Joseph Becher testified he was the only lawyer working for Dargon until he started taking on mortgage modification clients in 2009, according to the Concord Monitor account. Soon the law firm had more than 30 employees, Becher said, and it began to "turn into a business where the primary objective was how to get clients in and out of the door as expeditiously as possible while still meeting our contractual obligations."
Becher said he quit in May because he was troubled by how Dargon was running the law firm.
Lawyer Jeffrey Merrill joined the firm in December and resigned in February, about two weeks after he heard the law firm’s head telemarketer say he wanted to get away from a “consultative sell” that focused on whether the potential client qualified for assistance. Instead the telemarketer wanted to begin more of an “emotional sell” emphasizing the "pain and anguish people feel when they get that foreclosure notice."
"That is completely unethical," Merrill said.
According to WMUR.com, Dargon maintained that many experienced lawyers stuck with his firm until it closed, and they had “absolutely no problem with the way things were run.”