Thursday, July 10, 2014
Supreme Court Orders Two-Year Suspension for Attorney Involved With Loan Modification Program
By a MetNews Staff Writer
The state Supreme Court yesterday ordered that an Orange County attorney who violated state laws regarding representation of clients in loan modification negotiations be suspended for a minimum of two years.
The justices unanimously denied Jack Chien-Long Huang’s petition for review and imposed the penalty recommended by the State Bar Court’s Review Department. Huang will be on probation for three years and cannot be reinstated before he completes restitution and proves he is fit to practice, the Review Department said in its order.
He must also complete ethics school, file probation reports, and pay costs to the State Bar.
Huang stipulated that he had violated loan modification rules and performed incompetently in connection with eight matters, and had asked the Review Department to accept a hearing judge’s recommendation that he be suspended for six months. Charges involving a ninth client were dismissed by the hearing judge.
State Bar Court Review Judge Catherine D. Purcell explained that under the legislation adopted in 2009, at the height of the loan foreclosure crisis, an attorney cannot obtain a fee prior to obtaining a modification.
Huang was practicing in Newport Beach with another attorney when he became involved in loan modifications, the judge explained, and set up an office in Corona. While this was ostensibly a law office, Purcell said, it was actually a front for an organization called National Mitigation Services, which was run by non-lawyers and charged $2,000 to $3,000 in “fixed legal fees” to negotiate with lenders.
“Huang’s procedures were flawed from the start because he created a lay negotiating service where nonlawyers practiced law,” the judge wrote. “His nonattomey staff performed all the loan modification services outlined in his Legal Representation Agreement—they met with clients, gave advice, collected legal fees, prepared the loan modification package, and negotiated with the lender. Huang did not properly supervise his staff’s work on loan modification cases.”
The hearing judge, Purcell concluded, was in error in concluding that Huang did not aid the unauthorized practice of law, and in recommending relatively lenient discipline for conduct that endangered the public.
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