Johnny Burke

District Attorney Steve Cooley warns Los Angeles County homeowners to be on the alert for foreclosure rescue scams. Many consumers are faced with a mortgage they can no longer afford and are facing foreclosure. Unscrupulous opportunists are profiting from this crisis. They promise quick results for a fee but actually provide nothing.

Beware of promises involving the payment of substantial amounts of money or the deeding of your home to someone as a way to solve your financial problems.

In reality, these predators may steal your money, your home and your hope.

Help yourself. Call your lender directly to negotiate a loan modification. For foreclosure assistance, seek help from a housing counselor approved by the U.S. Department of Housing and Urban Development (HUD) by calling 1-888-995-HOPE (4673).

For more information or to make a complaint, contact the Los Angeles County Department of Consumer Affairs Real Estate Fraud and Information Program at 1-800- 973-3370.

If you believe you are a victim of a foreclosure scam, call your local law enforcement agency.

To learn more about foreclosure fraud, go to the Los Angeles County District Attorney's website at:http://da.lacounty.gov/cpd/foreclosure.htm.

To watch a video public service announcement about foreclosure fraud, click here.

WASHINGTON - The Office of the Comptroller of the Currency (OCC) today issued a consumer advisory to help consumers better understand reverse mortgages. Reverse mortgages generally are available to consumers who are 62 or older, and can be used to supplement retirement income or meet health care or other financial needs.

The information developed for consumers discusses basic facts about reverse mortgages, which are complex, home-secured loans. Under a reverse mortgage, a consumer receives payments from the lender - either over time or all at once - based on the value of the home at the time of the loan. As the consumer receives payments, and interest and fees accrue, these amounts are added to the loan balance. The advisory also reviews the costs and benefits of reverse mortgages.

In addition, the OCC's consumer advisory provides basic "rules of thumb" for consumers who are considering a reverse mortgage -- the advisory urges consumers to (1) investigate other alternatives in addition to reverse mortgages, (2) remember that reverse mortgages generally make more sense the longer the consumer remains in the home, and (3) be wary of anyone trying to sell other products along with a reverse mortgage.

The OCC urges consumers to consult with a qualified, independent housing counselor before entering into a reverse mortgage, and explains how consumers may obtain additional information about reverse mortgages.

"Reverse Mortgages: Are They for You?" is available on the OCC's website, www.occ.gov.

The State Bar of California said Friday it is investigating 16 attorneys, in addition to several whose names have previously been made public, for possible misconduct related to their loan modification services.

All but one of the lawyers identified were from Los Angeles and Orange counties.

State Bar Court Interim Chief Trial Counsel Russell Weiner said he was waiving investigation confidentiality in favor of public protection.

State Bar officials said this is the first time the names of more than a few lawyers being investigated have been made public, and Weiner insisted such a move was necessary to protect consumers.

"The number of attorneys using their law licenses to essentially take money from unwary but trusting consumers is astounding," Weiner said. "There are literally thousands of victims who have lost money they could not afford to lose. Under the circumstances, the need for public information and protection is paramount."

Weiner said the attorneys under investigation may have misrepresented the services they could provide or taken fees without performing services, communicating with their clients or returning unearned fees.

Many of the attorneys are associated with firms that use telemarketers or phone banks to sign up clients without regard to the facts of the individual case or whether or not the client can be helped, Weiner said.

Several also work with untrained non-attorney staff engaging in the unlawful practice of law by offering legal advice to prospective clients, and those staff members are being investigated for possible referral to law enforcement, he added.

Although officials said the State Bar was preparing to put some of the named attorneys on inactive status pending the filing of formal disciplinary charges, Weiner emphasized that they are all entitled to a full hearing on any charges that may be filed in the future and that no discipline may be imposed unless the State Bar proves the allegations of misconduct by clear and convincing evidence.

Stephen L. Burns and Michael Yellin of Los Angeles were among those identified by the State Bar, as well as Culver City attorney Eric D. Johnson and Mark Shoemaker of Long Beach. None could be reached for comment.

Burns operates the Legal Group Network and the Law Offices of Stephen L. Burns. In 2005 he stipulated to misconduct in five personal injury cases, most involving misusing his client trust account and/or failing to perform legal services competently, according to the State Bar. Burns was admitted to the State Bar in 1984.

Yellin, of A Fresh Start Loan Modification, has no previous record of discipline and was admitted to practice last year.

Johnson, of the Avantgarde Group, was admitted to the State Bar in 2003. He was privately reproved in 2005 and suspended July 1 for failing to pay his membership fees and comply with his mandatory continuing legal education obligations.

Shoemaker, of Advocates for Fair Lending, has no record of discipline and was admitted to practice in 1988. In March of this year he lost an appeal before Div. Eight of this district's Court of Appeal challenging the dismissal, under the anti-SLAPP law, of his complaint against Troy & Gould for conveying a settlement offer to one of his clients in order to create a conflict of interest.

The other attorneys under investigation are:

•David Arase of the Arase Law Firm and National Housing Assistance in Costa Mesa. Arase has no record of discipline since his admission to the State Bar in 2004.

•Robert Buscho of the United Law Group in Fullerton. He has a lengthy record of discipline for failing to perform legal services competently, communicate with clients, refund unearned fees, return client files or cooperate with the bar's investigation; improperly withdrawing from employment; practicing law while suspended for non-payment of dues; and failing to comply with probation conditions attached to a prior disciplinary order. He has been suspended on three occasions since being admitted to practice in 1986.

•Nicholas Chavarela of the Rodis Law Group and America's Law Group in Santa Ana. Chavarela has no record of discipline since his admission to the State Bar in 2007.

•Steven C. Feldman of the Feldman Law Center in Mission Viejo. After being admitted to the State Bar in 1982, Feldman was briefly ineligible to practice in 1999 for failing to pay dues and child support and in 2007 for failing to meet his continuing legal education obligations.

•Paul Lucas of the Lucas Law Center in Aliso Viejo. He was suspended once in 2007 for failing to pay dues after being admitted to the State Bar in 1992.

•Brandon Moreno of U. S. Foreclosure in Santa Ana. Moreno has no record of discipline since being admitted to practice in 2004.

•Jeffrey Nemerofsky of U.S. Advocacy Law Group and U.S. Financial Products in Laguna Niguel. He has had no disciplinary action take against him since his admission to the State Bar in 2001.

•Adrian Pomery of U.S. Foreclosure in Orange. He has no record of discipline since his admission to the State Bar two years ago.

•Ronald Rodis of the Rodis Law Group and America's Law Group in Newport Beach. He has no record of discipline since his admission to the State Bar in 1996.

•Marc Tow of Marc Tow and Associates in Newport Beach. Since being admitted to the State Bar in 1977, Tow has had no record of discipline.

•Sean Rutledge of the United Law Group in Irvine. He was admitted to practice last year and had disciplinary charges filed against him in July for failing to perform with competence, moral turpitude, settling a claim for a client without informing that client in writing that he could seek the advice of an independent attorney, failing to respond to client inquiries, failing to return an unearned fee, seeking an agreement with a client to not file a complaint, and forming a partnership with a non-lawyer.

•Gregory Paiva of the Law Offices of Gregory Paiva in Ontario. Paiva was admitted to the State Bar in 2000 and has disciplinary charges pending against him. In March he signed a stipulation admitting to his failure to maintain a client trust account and moral turpitude.

Earlier this year, three other attorneys accused of misconduct related to their loan modification services resigned from the State Bar. Christian Dillon of Dana Point and Nabile Anz of Irvine both resigned from the practice of law in August, rather than face disciplinary charges and possible disbarment. Christopher Diener of Irvine has also surrendered his license, State Bar officials said.

About one-quarter-almost 800 cases-of the active investigations in the Office of Chief Trial Counsel are related to foreclosure complaints, officials said, noting that the office has experienced a 58 percent increase in active investigations in 2008 due in large part to the increase in complaints against attorneys offering loan modification services.

In March the State Bar created a special team-comprised of six investigators and four attorneys in the Office of the Chief Trial Counsel, led by Supervising Trial Counsel Suzan J. Anderson-to address the growing number of complaints received about attorneys offering loan modification services.

Weiner commented that he had "not seen a crisis of this magnitude" in over two decades handling attorney discipline matters, calling the situation "truly unprecedented."

From David Streitfeld at the NY Times: The House Trap

An analysis for The New York Times by the real estate information company First American CoreLogic shows there are 2.8 million active interest-only home loans worth a combined total of $908 billion.

The interest-only periods, which put off the principal payments for five, seven or 10 years, are now beginning to expire. In the next 12 months, $71 billion of interest-only loans will reset. The year after, another $100 billion will reset. After mid-2011, another $400 billion will reset.

There are a several fascinating anecdotes in the article, including a professor who teaches real estate finance. Here is one:

"I understand I took a risk," said [Dean Janis, a Southern California lawyer who bought a $950,000 home in 2004] "But I did not anticipate that the real estate market would go down 30 percent." He talked with Wells Fargo about his options, and the lender said he had none.

Mod Tutor.com has a free resource which basically shows homeowners how to submit their own loan modification request without paying huge fees to a foreclosure "counselor" or a real estate attorney. The site has videos, a discussion board, an e- book, a state foreclosure summation, lender-specific modification forms and is much easier to understand than makinghomesaffordable.gov. For more info, go here.