Florida Homeowners’ Complaints Rise Against Attorneys
The Florida Bar reported that they have received over 1,400 complaints against attorneys in Florida that are related to the housing crisis.
Let me preface that Richard Zaretsky and Marlyn Weiner are attorneys we refer sellers to. These two attorneys are ethical. Let me also say that there are good attorneys and bad attorneys just as there are good real estate agents and bad real estate agents.
Sometimes if a homeowner has not been paying their mortgage payment for many years and their attorney is not getting paid to defend them anymore, they may lose their home eventually to a foreclosure. The disgruntled homeowner than complains that his attorney committed fraud.
Marlyn Weiner says this is the most common call out, fraud. But not all cases are fraudulent.
In fact, so many complaints are coming in that the Florida Bar had to start a loan modification category, a mortgage fraud category and a foreclosure fraud category. None of these categories existed before 2010.
The first recorded loan modification complaint was in November of 2010. I won’t say any names but I can bet I know who that complaint was against. There was this one attorney who was doing loan modifications and foreclosure defense and several of our sellers had hired him. He did not even show up to the foreclosure hearing as agreed in one of the cases. In another case, he took our sellers money for services to defend them in a foreclosure and he never responded to the plaintiff’s counsel.
The number of complaints is not stopping either. The Florida Bar had to an attorney to help the ones that are buried in these complaints. They have never seen anything like this in the history of the Florida Bar. This one attorney is trying to take care of these cases. The complaints account for 17% of all the open Bar cases.
Consumers are complaining about the conduct of attorneys. So far 793 cases are now opened.
So far 208 of the 1,394 housing- related cases resulted in some form of disciplinary actions against the attorneys in the complaints. The disciplinary actions range from public reprimand to disbarment.
The biggest problem is that many lawyers took classes in loan modifications and then started to process them. But just going to a class does not make you proficient in doing loan modifications.
Here in Florida a law passed in 2010 requiring licensing for any person or entity doing loan modifications in this state.
In 2008 a Florida law was passed that bans charging up front fees to do loan modifications.
Attorneys were the exception to this law. Marlyn told us that many of those third party loan modification companies then approached lawyers to make deals with them in order to continue to run their businesses here but through the attorney’s firm. Many of these attorneys must not be happy with this arrangment they got themselves into.
We believe that the next wave of complaints will be coming from homeowners who felt they were pushed into doing Deed in Lieu instead of short sales. Many attorneys get paid up front and a flat fee rather quickly for getting a Deed in Lieu through instead of waiting for a short sale to get approved.
If you are facing foreclosure- you do have options. Contact Nestor Gasset or Katerina Gasset at 561-753-0135 to go over your options. A Florida short sale may be an option for you. We offer a no obligation confidential phone interview. Don’t wait until a court date is in your hand to act.
Citigroup Settles For $300 Million – Civil Fraud Complaint
Citigroup settles a civil fraud complaint. It was alleged that Citigroup promoted an investment tied to the housing market where they did not tell their investors that they were betting that those same securities would fail.
Securities and Exchange Commission says that Citgroup took $1 Billion of the investors’s money and combined it with other assets that failed in the mortgage meltdown.
Citi traders bet against these securities and made money even though their investors would lose money. One of the traders had an email that was pulled up in the investigation that was saying that this deal was the best and biggest ‘short’ ever.
Investigators say that the investors had no idea what Citi was doing and that they were being bet against. Another email from a Citi trader said that this was the “worst investment ever”. Yet, they were making a ton of money off of it while the investors were losing all their money they had entrusted Citi with.
More big banks are being scrutinized by the SEC.
Goldman Sachs is agreeing to pay out $550 Million to settle claims that they did not tell their clients that they were betting against some of the mortgage securities.
JP Morgan Chase agreed to pay out $153.6 Million for the same kinds of accustations.
Wall Street firms took risky morgages and put them into instruments that ended up imploding when the housing market went bust.
The reason that Citigroup has to pay more out is because the SEC says that Citigroup was actively involved in marketing this to their investors knowing full well what they were hiding or covering up and that is called Fraud. Citi employees created the deals, they created the packages and the marketing materials and then actively marketed those to their investors and they made $160 Million betting against the security.
Goldman Sach’s securities and packaging was done by an outside marketing company and outside hedge fund investor.
Citi says they did make money on this particular event and security but lost a lot more money on other securities and other debt obligations that eventually took the company down in 2008.