Consumer Financial Protection Bureau commends ABA effort against mortgage relief fraud
“I write to commend the American Bar Association for its recent decision to address deceptive or fraudulent loan foreclosure rescue practices including, notably, those involving lawyers,” said Director Richard Cordray of resolution 111c in a March 24 letter to the sponsors of the resolution, the ABA Section of Individual Rights and Responsibilities, Bar Association of the District of Columbia, Bar Association of San Francisco and the ABA Commission on Homelessness and Poverty.
Resolution 111c urges government at all levels to enforce as well as enact rules and regulations that strengthen consumer protections on fraudulent loan foreclosure rescue practices. It also supports the ongoing efforts of state courts and lawyer disciplinary agencies to investigate allegations of misconduct and to prosecute those who commit crimes. Finally, the resolution also encourages the education of consumers and lawyers on the deceptive practices.
The report accompanying the resolution notes that complaints about rescue scams involving lawyers have increased each year since 2010, and complaints about attorney-involved scams were 59 percent of all the complaints received in 2013 by the Loan Modification Scam Prevention Network, an effort by the Lawyers’ Committee for Civil Rights Under Law to address such unscrupulous practices.
“Mortgage relief scammers are appropriating the integrity of the legal profession and trading it for ill-gotten cash,” said Cordray. “When called on it, many of these scammers invoke ‘attorney exemptions’ – designed to protect honest lawyers doing legitimate work for their clients – in a cynical attempt to evade the legal consequences of their unlawful schemes.
As Resolution 111c points out, Congress and several states are investigating the proliferation of fraudulent mortgage loan scams. On July 23, the CFPB, the Federal Trade Commission and 15 states announced a sweep against foreclosure-relief scammers. The CFPB is filing three lawsuits against companies and individuals that collected more than $25 million in illegal advance fees for services that falsely promised to prevent foreclosures or renegotiate troubled mortgages. The CFPB is also seeking compensation for victims, civil fines and injunctions against the scammers. Separately, the FTC is filing six lawsuits, and the states are taking 32 actions.
“It will take the joint efforts of all of us – federal and state regulators, state ethics agencies, and a committed lawyers’ bar – to eradicate the scourge of attorney-centered mortgage-relief scams from our profession and nation,” said Cordray. “I look forward to working with the ABA on this important issue in every way we can over the months and years ahead.”
This is from by By John Glynn