California Loans News

The loan modification task force of the State Bar announced that it received resignations of three California attorneys due to their misconduct correlated to their loan modification activities. Other lawyers were put to or in the process of seeking inactive status for posing “a substantial threat of harm to (their) clients or the public” under the Business & Professions §6007.

The State Bar organized a loan modification task force in March to respond to the thousands of calls from complaining homeowners. The task force is composed of 10 persons. Moreover, the complaints were mainly against lawyers who have not performed accordingly after charging fees to help avoid foreclosure. As of to date, there are 738 active investigations under the task force. Last September, it released the names of 16 attorneys undergoing investigation for possible misconduct related to loan modification.

Under the new laws protecting real estate market consumers, lawyers specializing on foreclosures and loan modification work could not receive nor ask upfront services fees from their clients. They could only demand and receive the payment until the work promised or under the contract has been completed. This is enabled by the Senate Bill 94 or the No Advance Fee Loan Modifications Law that immediately took effect last October 11. It would be effective until January 1, 2013. The lawyers herein have been investigated to have violated such measure.

The three lawyers who resigned from the State Bar are Cameron Edwards [#222549] of Alliance Law Center in San Diego, Ronald Rodis [#181873] of Rodis Law Group and America’s Law Group in Newport Beach, and Jeffrey Nemerofsky [#213014] of U.S. Advocacy Group and U.S. Financial Products in Laguna Niguel. The first one resigned last September 25, while the second and third one just last October 13 and 16, respectively. The California Supreme Court order is awaited to accept their resignations. Concurrently, they are ineligible to practice law for any purpose.

Those the State Bar is seeking to be placed on involuntary inactive status are Paul Lucas [#163076] and Sean Rutledge [#255938]. Lucas is from Lucas Law Center in Aliso Viejo. The bar filed for his inactive status last September 21, and Lucas did not reply to the petition. This then automatically put him in submission. Rutledge of United Law Group in Irvine was filed a petition against last September 22. He has a hearing set on this month. Previously, the bar charged him with seven counts of misconduct “in handling a loan modification for a client who paid an advance $3,500 fee.” Rutledge did not take opposing action to smooth things out with the client’s mortgage lender.

Christopher L. Diener [#187890] of Irvine was placed on inactive status last October 9th. He was the principal attorney for Home Relief Services LLC. The State Bar judge found that he posed substantial threat of harm to his clients and the public. Attorney general Jerry Brown filed a suit against Diener last summer. Brown accused Diener of “telling homeowners he and his company would act as sole agent and negotiators and directed the homeowners to stop contacting their lender.” The victims did not receive loan modification with Diener nor his company’s assistance. Brown further accused that they have been “bilking thousands of homeowners out of thousands of dollars each.”

Meanwhile, another attorney was apprehended due to two 2001 misdemeanor convictions for sex with a child under 18 years old. Southern Californian lawyer James Parsa [#153389] resigned October 27th after facing an interim suspension due to the said misconduct. He never reported the event to the bar. Parsa heavily advertised his loan mod work which led the bar court to investigate him. Through this course, an investigator exposed his misdemeanor convictions that immediately placed him under suspension. His resignation will make the suspension disputable.

Interim chief trial counsel Russell Weiner said, “We are very pleased that we have been able to remove these practitioners from the practice of law quickly in order to protect the public.”

The State Bar of California is an administrative arm of the California Supreme Court. It was founded in 1927 by the state legislature. Practitioners in the state are required to be members of the State Bar. As of this month, its membership reached more than 223,000.

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