Loan Mod Firm Took Upfront Fees For "Forensic Analysis" Of Loan Docs, Says Florida AG; Accuses Company Of Violating UPL, Foreclosure Rescue Fraud Laws

From the Florida Attorney General's Office:

• Attorney General Bill McCollum [Monday] filed a lawsuit against a Miami company and its owner alleging the company is engaged in foreclosure rescue fraud. According to the lawsuit, Lincoln Lending Services, LLC targeted Hispanics facing foreclosure and charged up-front fees for loan modification services, both in violation of the Foreclosure Rescue Fraud Prevention Act.

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• According to consumer complaints, Lincoln Lending advertised for mortgage foreclosure assistance and rescue services. The complaint alleges that to get around the statutory prohibition against up front charges, the company would have consumers pay $2,700 for "forensic analysis" services, then sign a contract for alleged modification services. The forensic analysis fee was allegedly created to circumvent the new law, which the Attorney General helped create last year.

• Lincoln's business of offering legal services, directly or indirectly, constitutes the unauthorized practice of law and violates FS 877.02(1).(1) The Attorney General’s Economic Crimes Division determined Lincoln Lending also forwards consumers to an attorney working under the business names of Florida Foreclosure Law Center, LLC and Florida Homeowner Assistance Center, LLC.(2)

For the Florida AG's press release, see Attorney General Sues Company Targeting Hispanic Community with Foreclosure Rescue Fraud Scam.

For the lawsuit, see State of Florida v. Lincoln Lending Services, LLC.

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See also, The Miami Herald: Florida sues Miami's Lincoln Lending over mortgage fees (Florida's attorney general has accused a Miami firm that promised to modify delinquent home loans of taking upfront fees from customers in violation of a state law):

• [L]incoln also told customers a $999 fee it charged for ''loan-modification'' services would be paid by their mortgage lender through President Barack Obama's stimulus package, the lawsuit alleges.

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Go here for information on Filing an Unlicensed Practice of Law Complaint with The Florida Bar.

Go here and Go here for other posts on issues relating to attorneys, loan modifications, and the unlicensed/unauthorized practice of law.

(1) See lawsuit, at paragraph 30:

• Defendant's business in offering legal services to the public directly, or indirectly through Florida licensed attorneys which Defendants engage or otherwise involve and/or compensate, constitutes the unauthorized practice of law in accordance with the principles of the Florida Supreme Court pursuant to The Florida Bar v. Consolidated Business and Legal Forms, Inc., 386 So.2d 797 (1980).

(2) With respect to the attorneys involved with this loan modification firm, no word at this point as to whether they are in hot water for possible charges of:

• using a person or organization to recommend or promote the lawyers’ services,
• aiding nonlawyers in the unauthorized practice of law,
• improperly sharing legal fees with nonlawyers.

See The Florida Bar's Ethics Alert: Lawyers should be very wary of loan modifiers. See also. Cincinnati Bar Assn. v. Mullaney, 119 Ohio St.3d 412, 2008-Ohio-4541 (2008). UnauthPractOfLawTheta