Notice Of Disciplinary Charges Filed By State Bar Against California Attorney In Connection With Disgruntled Loan Modification Client

In Southern California, the Orange County Register reports:

• One state regulator has faced a hurdle in trying to stop companies from scamming people who need help avoiding foreclosure. But this week another agency stepped in to join the fight. The California State BAR on July 7 filed its first disciplinary case against an attorney related to the burgeoning, and sometimes messy, loan modification business. [... O]n Tuesday it filed a notice of disciplinary charges against Sean Rutledge, a lawyer with United Law Group in Irvine.

• The notice accuses Rutledge of taking $1,750 from a homeowner in November 2008 but never making an effort to get his loan modified. After the client requested a refund, it took months to get his money back and the client had to first sign a document releasing Rutledge of all legal liabilities, according to the filing.

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• Diane Curtis, a spokeswoman for the BAR, said in disciplinary cases attorneys face a range of punishments, from nothing to disbarment.(1)

For more, including Rutledge's response, see Irvine attorney is first to face discipline over loan mods.

(1) Russell Weiner, acting chief trial counsel for the BAR, said, “Attorney misconduct in connection with the provision of loan modification services is a significant and growing problem. It is unfortunate that any attorney would fail to adhere to the highest ethical standards in providing legal services to a vulnerable client possibly facing the loss of their home.”

For the February 2, 2009 "Ethics Alert" on loan modifications from the State Bar of California Committee on Professional Responsibility and Conduct, see Legal Services to Distressed Homeowners and Foreclosure Consultants on Loan Modifications. For the State Bar's subsequent press release, see State Bar Issues Foreclosure Ethics Alert.