Thursday, October 22, 2009
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State Bar: More Resignations Over Loan Modification Schemes
By STEVEN M. ELLIS, Staff Writer
The State Bar’s loan modification task force said yesterday it has obtained the resignations of four California attorneys, placed another attorney on involuntary inactive status and undertaken a similar effort against two more attorneys.
The task force said San Diego attorney Cameron Edwards, Newport Beach attorney Ronald Rodis and Laguna Niguel attorney Jeffrey Nemerofsky resigned over misconduct related to loan modification activities, and that Costa Mesa attorney James Parsa—who extensively advertised loan modification work—resigned due to a 2001 misdemeanor conviction for sex with a child under 18 that he never reported to the State Bar.
The group also said that Irvine attorney Christopher L. Diener has been placed on involuntary inactive status for posing a threat to clients or the public, and that it was taking similar efforts against Aliso Viejo attorney Paul Lucas and Irvine attorney Sean Rutledge.
Parsa, 44, has advertised heavily throughout California for the past several months, offering to help homeowners facing foreclosure. The State Bar Court ordered him placed on interim suspension Friday after an investigator uncovered two 2001 misdemeanor convictions for sex with an underage girl, but Parsa’s resignation will make the suspension moot.
Edwards—of the Alliance Law Center—tendered his resignation from the State Bar Sept. 25, the group said, while Rodis—of Rodis Law Group and America’s Law Group—resigned Oct. 13 and Nemerofsky—of U.S. Advocacy Law Group and U.S. Financial Products—resigned Friday.
Parsa was admitted to the State Bar in 1991, while Rodis was admitted in 1996 and Nemerofsky and Edwards were admitted, respectively, in 2001 and 2002. The State Bar’s website indicates that none of the four have been the subject of prior disciplinary action.
The four attorneys are ineligible to practice law pending a California Supreme Court order accepting their resignations. None of them could be reached for comment.
‘Substantial Threat’
The State Bar said Diener, principal attorney for Home Relief Services LLC, was placed on involuntary inactive status Oct. 9 pursuant to Business & Professions Code Sec. 6007(c) for posing “a substantial threat of harm to…clients or the public.”
California Attorney General Jerry Brown sued Diener last summer, accusing him of telling homeowners that he and his company would act as sole agent and negotiators, and directing the homeowners to stop contacting their lender.
None of the known victims received a loan modification with the company’s assistance, the State Bar said, and Brown accuses the company and Diener of bilking thousands of homeowners out of thousands of dollars each.
Admitted in 1997, Diener was previously placed on inactive status in 2001 for MCLE noncompliance, and suspended in 2005 for failing to pay dues.
The State Bar also said that it was pursuing action under Sec. 6007(c) against Rutledge, of United Law Group, and Lucas, of the Lucas Law Center.
Hearing Tomorrow
The group filed a petition against Rutledge Sept. 22, and a hearing is scheduled tomorrow. The State Bar earlier charged him with seven counts of misconduct in handling a loan modification for a client who paid an advance $3,500 fee, and said Rutledge—who was admitted to practice last year—never took any action to negotiate with the client’s mortgage lender.
The State Bar petitioned to put Lucas on inactive status Sept. 21, and said the State Bar Court took the matter under submission when Lucas failed to reply. Admitted in 1992, he was suspended once in 2007 for failing to pay dues.
Diener and Rutledge could not be reached for comment, but Lucas told the MetNews that he had filed a motion to dismiss the petition and that the accusations against him were “politically motivated.”
He said the accusations arose because banks with whom he was attempting to negotiate loan modifications lied to his clients that they had never heard of his firm, and that the Federal Trade Commission had shut down his firm on the basis of seven complaints by clients.
Adding that he had wanted to fight the FTC action but lacked funds to do so after his and his firm’s bank accounts were frozen, he commented, “It’s like I woke up in Nazi Germany.”
Lucas said he would be telling the State Bar that he was not performing any more loan modifications, and that he wanted to remain a member at least until the FTC’s action was resolved.
The State Bar created the 10-person loan modification task force in March after receiving thousands of calls from homeowners complaining that lawyers have done no work after taking fees purportedly to help avoid foreclosure. The task force has 738 active investigations underway.
Last month, it released the names of 16 attorneys it was investigating for possible misconduct related to loan modification, including Rodis, Nemerofsky, Lucas and Rutledge.
Interim Chief Trial Counsel Russell Weiner said that the State Bar was “very pleased that we have been able to remove these practitioners from the practice of law quickly in order to protect the public.”
Until recently, attorneys were able to legally accept advance fees from borrowers for residential loan modification work and other forms of mortgage loan forbearance services. Lawyers’ services were in demand by foreclosure relief companies and operators that could not otherwise receive payment until contracted, or promised loan modification work was completed.
However, on Oct. 11, Gov. Arnold Schwarzenegger signed SB 94, which prohibits attorneys and any other persons from collecting an advance fee for residential loan modification and mortgage loan forbearance services. The measure took effect immediately.
Copyright 2009, Metropolitan News Company