A few weeks after President Obama gave that speech, Secretary Geithner and Attorney General Holder went on television to tell the world that everyone offering to help homeowners obtain loan modifications was a scam and ever since then, all I’ve heard from my government in relationship to private sector firms offering to help homeowners obtain loan modifications is “Scam, scam, scam, scam, scam and scam.” It really would be funny, were it not so monumentally sad.
Everyone watching the situation closely now knows that it’s the lenders and servicers that have dropped the ball on loan modifications, but when Bank of America reports that they’ve managed to modify something like 4% of their mortgages, all the government says is “servicers are overwhelmed,” or “it’s a difficult situation”. But when a private sector firm, or law firm doesn’t get a loan modified… they’re a scammer who deceived the homeowner, took their money, and did nothing in return.
Why so few Americans have connected those dots as yet, I have no idea except that it’s possible that since they’re not yet losing their homes, they simply don’t want to think about it that carefully.
So… enter Howard Miller, the recently named president of the California State Bar Association. What Mr. Miller knows about the situation related to loan modifications you could put in a thimble. He must have asked a number of people in government what all this loan modification business was all about and they responded by saying: “Scam, scam, scam, scam, scam, scam.”
So, Howard decided to go Witch Hunting… and it’s a lot like watching Larry, Moe and Curley play police officers. Let me run a few things by you and then you can decide for yourself.
The California State Bar is investigating more than 300 California lawyers involved in loan modification rip-offs, which is one of the strangest sentences I’ve ever had the displeasure to come across. I mean, if we already know that these 300 have been involved in “rip-offs,” why are we still “investigating” them? Shouldn’t we have already charged and convicted them?
Howard seems to think that the lawyers he’s after cause people to lose their homes. But, how does paying a lawyer a couple grand make someone lose their home? Hell, according to the State Bar, the Attorney General, the federal government, the President of the United States, and every single bank or mortgage servicer in the country, you don’t even need a lawyer to get your loan modified… you can just call your bank directly or dial 1-800-HUDCOUNSELOR. So, how in the world could you lose your home as a result of paying a lawyer?
These days, and it takes the bank a year or more before they get around to foreclosing and kicking you out. When you noticed that the lawyer you paid wasn’t lifting a finger to help you, why wouldn’t you just have called your bank directly or walked into a HUD counselor? Now, if you told me that you paid a bank several thousand a month for six months and the bank didn’t do anything to help you save your home, that I’d have no trouble believing.
Here are some numbers from the State Bar:
According to the State Bar, in 2008, before the flood of loan-modification cases, the state disciplined 469 of the state's 206,165 lawyers. Of those, 245 were suspended from practicing law and 57 were disbarred. The disciplinary figures for last year have not been released, but ‘we anticipate seeing very different numbers in 2009,’ said Etzel Berrio, special assistant to the bar's chief trial counsel.”
Okay, stop. Before the “flood of loan modification cases, the state disciplined 469 of the 206,165 lawyers?” That’s .002 percent. And of those, only 245, or .001 percent, were suspended and 57, or .00027 percent, were disbarred?
And the disciplinary figures for 2009 have not been released, but the special assistant to the Bar’s chief trial counsel says that they expect to see very different numbers?
But I thought the Bar was “investigating more than 300 California lawyers involved in loan modification rip-offs?” I’m almost positive that I was just making fun of that incredibly unconstitutional sentence just recently. But they also said that in 2008 there were 469 lawyers disciplined, and only 245 suspended, and 57 disbarred. That adds up to 302 bad lawyers. So, when the special assistant to the chief trial counsel said that he expects to see “very different numbers,” did he mean that they’d be very-different-lower? I’m not trying to be a smart ass, I’ve just never been that comfortable with numbers…. I mean, with stupid numbers. Intelligent numbers I have no trouble understanding.
And what the heck happened to the 167 lawyers that were part of the 469 that were disciplined in 2008, but weren’t among the 302 that were suspended or disbarred? How exactly were they disciplined? Were they spanked, because if that’s the case, I’d consider going pay-per-view in ’09.
And what’s the hold up with releasing the 2009 numbers, President Miller? It’s the end of January. Don’t you have anyone that can count to three hundred in less than a month over at the California State Bar? Is that why Governor Schwarzenegger refused to sign the bill that would have allowed the State Bar to collect dues from its 206,165 members? I apologize, Mr. Miller. You guys at the State Bar should take all the time you need to do the counting.
I realize California’s schools aren’t turning out many Mensa members these days, but seriously? I’ve read every single article that the State Bar has obviously pushed into the press and not one of them has made any sense whatsoever. Maybe I’ll send President Miller one of those calculators they have at Brookstone in the mall… you know, the ones with the really huge keys that talk.
Then there are times when the State Bar sends out a release saying “The State Bar is investigating 1,200 loan-modification cases.”
From where has that number come? It’s a simple formula, really. You take the 302 cases, multiply by the square root of Miller’s I.Q. and then subtract 8. I don’t have any idea where that number comes from and apparently neither does anyone else.
As of mid-January, the State Bar had resignations from 13 lawyers, and three trials were pending at the State Bar Court, Layton said. Settlements have been reached with lawyers in five cases to accept discipline, he said.
What? 13 resignations, 3 trials pending, settlements reached with 5 who have agreed to (thank-you-Sir-may-I-have-another) accept discipline?” How many is that? Let’s see… hmmm… 21… assuming no duplicates in there, which I’d bet money is not the case. 21 LAWYERS OUT OF 206,165 THOROUGHOUT CALIFORNIA?
That’s .0001 percent… ONE TEN THOUSANDTHS OF ONE PERCENT? Oh for Christ’s sake Miller, don’t you have anything better to do than to scare people out of hiring a lawyer when at risk of losing their home? Because that’s all this kind of crap is accomplishing, don’t you realize that?
You make people believe that there’s a lawyer on every corner waiting to scam a homeowner out of some relatively paltry amount of money, when in fact… by your own numbers, the chances of being scammed by a lawyer in California are somewhere between the odds of finding a four-leaf clover on your first try… one in ten thousand… and the odds of being killed sometime in the next year in any sort of transportation accident, one in 77.
Of course, there’s no changing the mind of State Bar President Howard Miller: "It's the most disturbing thing I've seen in the legal profession practicing for more than half a century.”
Oh fine then. Scam, scam, scam, scam, scam.
Martin Andelman is a staff writer for The Niche Report. He also writes an almost daily column on
ML-Implode.com called Mandelman Matters. Email him at email@example.com. He also publishes a Monthly Museletter and you can follow “Mandelman” on Twitter.
It was almost exactly one year ago that President Obama told the country about his Making Home Affordable plan to save the housing markets from their free fall, and thus save the American Dream as we knew it. Okay, so it didn’t work worth a damn, so what? Obama had his shot at stopping us from plunging into a deflationary collapse that is at this point all but certain to last a decade or longer… and he blew it.