State Regulator, California Bar Have Hands Full Hammering Real Estate Agents, Attorneys In Loan Modification, Short Sale, "Lawyer-Renting" Scams

California Watch reports:

• Amid the downturn in California's real estate market, the state has disciplined a record number of real estate licensees and is investigating thousands of attorneys involved in loan modification and short-sale scams.

***

• The [California Department of Real Estate] revoked, suspended or accepted the surrender of 886 real estate licenses from July 2009 through June 30, 2010. That's a 60 percent jump during the past three years. The department has nearly 5,400 open investigations, many for scams involving loan-modification scams and, increasingly, short sales. It has also issued nearly 600 desist and refrain orders to unlicensed firms and individuals since July 2006.

• Similarly, the State Bar of California is investigating more than 2,000 of its members for involvement in foreclosure fraud. Twelve attorneys have resigned, three have been disbarred, and five have trials pending, said Suzan Anderson, supervising trial counsel of the bar's special team on loan modification. "I can't remember a time, not to this extent," when so many attorneys were being disciplined for misconduct, Anderson said.

***

• The attorneys tend to join companies that want to purport being a law firm, she said. "The attorney is pretty much renting and leasing his bar number to the loan modification company," she said.(1)

For the story, see Real estate, attorney scams rise amid foreclosures.

(1) See ETHICS ALERT: Legal Services to Distressed Homeowners and Foreclosure Consultants on Loan Modifications for guidance on the types of loan modification activities The State Bar of California discourages its members from engaging in.