Legal Ethics

Mortgage-Rescue Meltdown: Calif. Probes 400 Lawyers, Fields 30 Complaints Daily

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Amidst the mortgage meltdown, a stunning number of lawyers reportedly may be taking advantage of desperate homeowners by accepting thousands of dollars in fees from individuals while doing little or no work to save their homes.

The California Bar is probing more than 400 lawyers in such cases, and is fielding 30 new complaints daily, reports the Associated Press. The state has more than 250,000 lawyers on its attorney roster.

A total of 15 attorneys have either been suspended or resigned in the face of pending disciplinary charges, and many more are expected to lose their licenses, according to state bar authorities. The complaints are still going through the roof,” says Suzan Anderson, who serves as lead mortgage fraud prosecutor for the bar and says she is deluged with more than 30 new complaints a day.

Among those suspended–although he denies wrongdoing and is fighting the case–is Sean Rutledge. He is accused in of charging up-front fees of as much as $3,500 but doing little or nothing to help homeowners in California and Ohio. His pending bar discipline case in California also alleges that he called clients “losers” on the rare occasions when he returned their phone calls, the news agency reports.

The United Law Group firm Rutledge founded but no longer works for calls the California Bar’s probe a “witch hunt,” and a spokeswoman for the firm contends that mortgage lenders–eager to prevent homeowners from being properly represented–are behind the attorney disciplinary crackdown. The law firm has sued major banks alleging unfair business practices, which the banks deny.

Meanwhile, many homeowners need skilled representation but aren’t sure where to find it. Warren Jacobs says he paid Rutledge’s firm $2,000 last year to help him save his Dallas, Texas, home, but had to turn to another lawyer elsewhere to file an emergency bankruptcy for him when United Law Group failed to contest the foreclosure of his home, according to the AP.

The Ohio attorney general sued Rutledge and United Law Group earlier this year, contending that they defrauded homeowners.

Related coverage: “Tempted By Foreclosure Crisis, Some Lawyers Overcharge & Underwork” “Ex-Attorney Charged in Alleged Loan Modification Scheme Victimizing Over 400” “Recession Blamed for Increase in Lawyer Wrongdoing in California” “As Bank Takes Possession of Home, Couple Argues, to No Avail, ‘We Paid Cash,’ Suit Says”

Advertiser Talk: “United Law Group Negotiates Payment Reduction of $402 for David and Denise Miller of Uma Tilla, Fla.”

Legal Newsline: “Cordray sues Calif. law firm”

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