Archive for Foreclosure Legal Process

How a Forensic Loan Audit can Help Foreclosure Victims

With all of the current programs and ideas that the housing industry and government are creating

©SalFalko -flickr

©SalFalko -flickr

out to help homeowners save their properties from foreclosure, it seems new terms and acronyms are being invented everyday. One of the most bewildering that has come into common acceptance is a “forensic loan audit,” which is being sold to many homeowners.

But what is a forensic loan audit, exactly? Banks will not just allow one of these as a solution to foreclosure, so why are homeowners being sold more and more of them? These are the questions that any company selling such services must answer when meeting with foreclosure victims who are trying to use their scarce monetary assets in the most effective manner.

A forensic loan audit is a detailed review of the original mortgage documents, from the closing of the real estate transaction to any refinances, second mortgages, and transfers of servicing rights or ownership of the note between lenders. The goal is to find enough mistakes or evidence to show a possible predatory lending case against the bank.

The main reason to obtain a forensic loan audit is to show the lender that it would make much more sense just to change the mortgage than to foreclose on the household and risk a lengthy defense. If the borrowers can show enough mistakes were made on their loan, it will become very difficult for the bank to get a default judgment and move quickly towards the sheriff sale of the home.

Thus, a forensic loan audit is more like an insurance policy than anything else. For a few hundred dollars, homeowners can go to their bank, show them how difficult it would be to attempt a foreclosure lawsuit, and then negotiate for a loan modification, short sale, or other alternative to foreclosure instead.

Forensic loan audits are most recommended for homeowners who are dealing with a particularly difficult bank. When they are unable to move forward in negotiations and the lender is not complying, the process may need to be pushed forward. A list of mistakes and evidence of lender misconduct may be just the jolt the bank needs to keep working on a solution.

A loan audit would also be recommended for borrowers who are dealing with the bank on their own. Those represented by an attorney or third party may not have to worry as much about this service, but those homeowners dealing with the lenders themselves may need an extra bargaining chip. In some cases, such an audit can be highly helpful.

How To Fight Foreclosure if You Live in Florida

If you live in Florida and are facing the possibility of having your home repossessed, you are probably trying to find out as much about it as you can. Foreclosures are processed out through local court proceedings. The entire process commences when you fall at least thirty days behind on your mortgage payments, although you can usually go at least ninety days or longer without the courts becoming involved.

©Quint Cobb Foreclosure Relief - flickr

©Quint Cobb Foreclosure Relief – flickr

The bank from of your mortgage initially files a notification with the courts. If you are under the idea that your lender may have done so, you will know for sure when you receive a notification in the mail or delivered by a local sheriff’s deputy. Do not ignore this important warning as if it were junk mail or simply a threat against your home that you can not respond to. You must respond to it within the period of time indicated on the notice.

If you fail to reply to your foreclosure notice in the given time allowed, the court will rule against you and award the lender a default judgment. This means the court can assign a sale of your home to satisfy the judgment, which includes the total balance still owed to the mortgage holder in principal, interest, fees, and court costs. Under Florida foreclosure law, you can still save your home at this stage all the way up to the scheduled date for the sale of the home by acquiring enough funds to repay the lender everything you owe.

To give you an idea of how much time you have to get the necessary funds to pay your bank back, the scheduled date for the sale of a foreclosed home is usually between 20 and 35 days following the court’s decision. The originally set date is always subject to modification based on the court’s calendar, locality and conflicting schedule times of the auction itself. Homeowners and banks can also work together to postpone a sheriff sale if there is a possibility of another solution solving the problem.

Notices are kept up-to-date weekly for at least two weeks and the official date and time is announced five days prior to the auction. This way, even though times and dates may change throughout the proceedings, you have a clear knowledge of the exact date five days in advance. This is an especially important deadline to keep in mind when dealing with a lender for a loan modification, short sale, or other option to stop foreclosure.

If this is the stage you are at right now with your Florida foreclosure, it is not too late! You can still get your home back by making your account current once again. Remember, this will probably include the payment of late fees and other charges your account may have built up in the time you were behind in your payments. You may be able to pay up the account by borrowing money from friends and family, cashing in assets, refinancing, or even just selling the house.

No matter where you are in the legal proceedings of losing your property, you probably still have options. As long as ownership of the home has not been changed, there may be solutions available. You can learn exactly how to go about ceasing foreclosure even in these late stages by meeting with a financial and foreclosure expert. Be sure to choose a reliable source.

The FDIC is Not Always Immune to Claims – Some Exemptions

©afagen - flickr

©afagen – flickr

As mentioned in a previous article, it can be very difficult for homeowners facing foreclosure to raise certain claims in court when the bank holding their loan has failed and been taken over by the Federal Deposit Insurance Corporation. Case law and federal statute give the FDIC broad immunity against a number of claims that could be raised by borrowers in regards to loans held by the failed institution.

However, there are also a number of exemptions to the broad immunity the FDIC enjoys. Four of them are significant and worth examining here, as homeowners in foreclosure may be able to use them to bring claims against the FDIC or successor financial institutions.

The first is called fraud in the factum, and refers to any case when one party to a transaction reasonably relies on a misrepresentation by another party. The misrepresentation will be as to the character or essential terms of the contract. Examples include alteration of a document or forgery. The FDIC nor its successor institutions are immune to claims of fraud in the factum, so homeowners may be able to bring these issues into court.

Second, Truth in Lending rescission claims are still allowed despite the FDIC’s immunity protection. In fact, the Truth in Lending Act states that a borrower’s rescission rights continue regardless of assignment of the loan or to whom the loan is assigned. This means that, even if the lender fails and the note is taken over by the government, rescission may still be an option if the other requirements under the statute are met. FDIC receivership of the bank’s assets will not affect the claim.

Also, the FDIC does not have immunity protection from any transaction that is void. The federal statute granting FDIC immunity is intended to protect the government’s interests in assets is acquires from the failed banks. A void transaction, though, does not create an interest in an asset, and the immunity protection can not be extended to assets in which the FDIC has no valid interest. In cases such as fraud in the factum, the transaction may be declared void, for instance.

Finally, there is a rule called the FTC Holder Rule that was designed to protect credit consumers from holder-in-due-course immunity, such as the FDIC has been granted. For this rule to apply, though, an FTC Holder Notice must be included in the consumer credit contract. It will be included in many transactions relating to a sales transaction. This might be a home improvement contract or other similar agreement. If the notice is included in the contract, the FDIC’s immunity may not apply.

While the above defenses to broad FDIC immunity have survived most course, other claims have survived in a smaller number of cases. These include such issues as breach of contract, failure of consideration, challenges to the validity of a lien, homestead issues, unreasonable foreclosure sale, and state statutes regarding Unfair and Deceptive Acts and Practices. Homeowners should do their own legal research to determine if their claims may survive, or consult with a competent foreclosure attorney.

When homeowners find that they have become a mortgage customer of the government, falling into foreclosure can become extremely complicated. While the FDIC has taken some steps to assist borrowers in stopping foreclosure, the agency is granted broad immunity from many claims that may have been used to defend against the loss of the home in the first place. Thus, borrowers should educate themselves in regard to the issues surrounding the FDIC’s administration of mortgage loans and foreclosure.

Bad Things Happen if You Ignore the Foreclosure Lawsuit

Homeowners facing foreclosure often receive the lawsuit paperwork in the mail and take either of two actions which will not help them escape the situation. Some frantically begin calling the lender or servicing company, attempting to work out a solution so that they can keep the home. Others will simply put the paperwork aside, not even opening the envelope and just hope for the best.

©accutanelawsuit - flickr

©accutanelawsuit – flickr

While calling the bank to begin negotiating for a loan modification, repayment plan, or other solution to foreclosure is a good idea, it should not be done at the expense of answering the lawsuit. The bank will have no problem opening discussions with the borrowers, all the while proceeding with the legal action and having the house sold. If the negotiations fail, the homeowners can be swiftly evicted.

This can occur because, if the borrowers do not answer the lawsuit or mount any kind of legal defense, the bank will obtain a default judgment. At that point, the bank can request that the home be auctioned off by the county at a sheriff sale. Although the bank can also cancel any sheriff sale, it will be very difficult for the homeowners to reopen the case and begin defending the home after the judgment has been entered.

Thus, it the homeowners do not provide an answer to the foreclosure lawsuit, the bank will file a motion for default judgment against them. The judge will usually grant this, since the borrowers’ failure to file an answer is treated as if they do not disagree with anything the bank has claimed in the complaint. While it is usually a case of the borrowers not being aware of how the court system really works, the judge will usually feel that the owners have been given their day in court and passed on the chance.

Homeowners are also worried about having to pay something to file an answer to a lawsuit. In almost all cases, they will not have to pay anything to the lender during the lawsuit, even if there is a judgment for foreclosure. The home will be scheduled for a sheriff sale, at which time the house will be sold to pay off the judgment and any other liens. Usually, though, homes do not sell for the total amount owed, as there are few buyers, but this is one of the risks lenders take when making loans.

After the sheriff sale will be the eviction process. If the former owners have already left the house, the eviction will not really affect them. But if they are trying to remain there for as long as possible after foreclosure, the borrowers should make sure to keep on top of the process so they know when to move out. Calling the county sheriff is usually the best idea to find out when a lock-out will be performed on a particular property.

In almost all cases, homeowners should respond to the foreclosure lawsuit or contact an attorney to help them do this. If only to delay the final order of judgment against the home for a few months, the rewards can be much greater than any risks. Showing the bank that a real defense will be mounted to foreclosure can also persuade the lender to begin negotiating for other solutions to help the borrowers save their home.

Homeowners Using Wrongful Foreclosure Claims Against Mortgage Companies

In some cases of foreclosure, there may be enough instances of misconduct by the lender to show that the entire process constitutes a wrongful foreclosure. Many states even have common law regarding this issue, as well as a cause of action specifically for “wrongful foreclosure.” Although the claim has not been popular in recent history, homeowners may be able to use this claim after losing their home.

©REWealthCoach - flickr

©REWealthCoach – flickr

When extreme circumstances affect the process of taking the home back, homeowners may have a better case to make for wrongful foreclosure. Instances of mortgage servicing abuse, for instance, have been used in the past as a complete defense to foreclosure. When notices are not given to borrowers or the servicing company refuses to negotiate for an alternative solution to foreclosure, there may be a defense to the entire action.

When homeowners are unable to get through to the lender to negotiate for a loan modification or other solution, claims of wrongful foreclosure may be raised. Many different types of mortgage contracts (FHA, for instance) require some sort of preforeclosure meetings or negotiation, and courts have held that foreclosure is such a harsh remedy that it should be relied upon as a last resort.

However, many banks are notoriously difficult to communicate with, often calling homeowners dozens of times a day, but with no real resolution to the problem even if the borrowers answer and want to negotiate. Collection calls rarely turn into productive discussions of alternatives to paying back all of the arrears at once, entering into an expensive repayment plan, or losing the home to foreclosure.

When borrowers are unable to get through to someone authorized to make a decision about their account, and the foreclosure process keeps moving through the courts, there may be a case for wrongful foreclosure. Homeowners may want to resolve the situation, but no good alternative is considered by the bank beyond lawsuits or the sale of the property at a county auction.

A wrongful foreclosure claim may also be raised in instances where the lender or servicing company has added excessive late fees, interest charges, home inspection fees, appraisal charges, improper escrow advances, forced placed insurance, and other charges. Lenders will add these fees in order to create a small default on a property with substantial amounts of equity, and then to eat up any remaining equity between the time of default and the sheriff sale.

Homeowners should be aware that there is relatively little recent case law on the claim of wrongful foreclosure; however, depending on the circumstances, it may be worth raising it as part of a defense to foreclosure. As always, state statutes and laws will affect how much this claim is worth pursuing, so it may be in the best interests of the borrowers to speak with a knowledgeable attorney.

How Homeowners Can Set Aside a Foreclosure Sheriff Sale

©REWealthCoach - flickr

©REWealthCoach – flickr

Too many homeowners who have already lost their homes are looking for one final chance to get them back. They have contacted nearly every loss mitigation company, nonprofit organization, and government agency in the country, all of which have informed them that they do not qualify for any plan currently available to help them get their properties back after a foreclosure already been completed.

Is this true? Is there really no hope for borrowers whose homes have been sold and the auction has been confirmed? In most cases, this is not true, as there are still some remedies available after a foreclosure where a sale can be reversed and the owners given back ownership of their house. One of the main problems is that few companies or foreclosure specialists know about these last resort methods.

However, homeowners should be aware that these methods to get a home back after foreclosure may be very difficult to pull off. They should not be relied upon as the first option to stop foreclosure, as it can be much easier to qualify for a refinance, loan modification, or repayment plan. For the borrowers looking for one final opportunity, or those just trying to delay eviction for as long as possible, though, challenging the sale may be worth considering.

There are a number of grounds on which a foreclosure auction can be set aside, just as there are numerous claims to bring up in defending the lawsuit in the first place. In most cases, homeowners will have to bring their claims into the local court and attempt to have the sale reversed before they are evicted or the house falls into disrepair. The different types of claims that homeowners can bring into court are discussed more below.

The first way to challenge a trustee sale is based on irregularity in the conduct of the auction itself. This is often due to a lender or trustee not following the correct notice requirements to have a house sold through the auction process. Material violations of notice requirements may be enough to set aside the sale, although small technical violations may be ignored by the court unless they adversely affect the foreclosure or have the possibility of encouraging fewer bids or lower bids.

The inadequacy of the sales price may also be grounds to set aside a foreclosure auction, although the common definition of “inadequate” has been taken to mean shocking the conscience of the court. Courts in many different areas have either set aside or refused to set aside foreclosure auctions due to low sale prices at auction. It may be wholly dependent on the judge in the case to decide whether or not to reverse the sale.

For instance, some courts have decided cases such as these: $875 for a property with $27,000 in equity was not set aside. $2,000 for a property worth $18,000 was set aside. $10,304 for a property worth $57,500 was set aside. Thus, it may be very difficult to determine whether a price at auction is inadequate without bringing the issue into court.

An inadequate price coupled with irregularity in the conduct of the sale may make an even stronger case for the court to set aside the auction. Courts have decided over time that the lower the price of the property, the more any technical or minor irregularity or procedural violation will be taken into account. This may give homeowners strong motivation to challenge their trustee sale.

A final reason to set aside a sale may be an inadequate price plus unfairness to the borrowers. The definitions of “inadequate” and “unfair” will have to be fought out in court, but properties which sell for far less than they are worth may be a sign of bad faith on the part of the lender, which has a duty to obtain the highest price possible for a property it auctions. Especially if the lender turns around and sells the home for more soon after the sheriff sale, unfairness may be determined.

Homeowners who are relying on such defenses to save their home, however, may find themselves disappointed in the end. The further along the process their home goes, the more difficult it will be to hold onto it and get another chance to make on-time payments. These challenges to a sheriff sale may be successful, or they may not be. But they should be considered one of the last resorts after everything else has been tried, but before moving out of the house completely.

Collection Agencies, Violations of the FDCPA, and Penalties

The Fair Debt Collection Practices Act (FDCPA) was originally designed to protect debtors against abusive actions taken by collection agencies when they are pursuing a debt. There are numerous violations that may cause penalties against the debt collector to be paid to the borrowers or applied to the balance of the account. Two of the most important are prohibitions regarding communications with third parties and harassment of debtors.

Throughout the history of the FDCPA, court cases have been defining what is and is not a violation of the Act. Collection agencies and collection lawyers are the types of business that receive the most complaints by consumers though the Federal Trade Commission. The two most common complaints the FTC receives regarding collectors involve claims of harassment and collection agencies pursuing more than is really due.

©planent - flickr

©planent – flickr

A number of recent decisions in court cases have helped flesh out some of the issues regarding harassment and collectors contacting third parties (such as a borrower’s brother or coworker). In many cases, debtors that just defend against such actions can uncover numerous violations of the law by collection agencies. The borrowers may owe the money, but if the collector can not prove it owns the debt or has broken the law, its claims to recover may suffer severely.

In terms of communications with third parties in the collection of an account, debt collectors are not allowed to leave messages with family members of the debtor and request that they be conveyed through the third party to the borrowers. Failing to leave required notices may also be considered a violation of the Fair Debt Collection Practices Act.

Debt collection companies and lawyers must also protect borrower information when sending letters in the mail. One court found that a collector violated the FDCPA when it sent a letter to debtors with a window envelope where anyone could see information about the debt being referred to, including the creditor and the account number.

As well, debt collectors are not allowed to discuss or sell borrower information to nonaffiliated third parties. Collection agencies may not be allowed to make even more money from taking the personal information of debtors and selling them to marketing partners, poor credit card partners, transfer credit card partners, and others. This would be a clear action of communicating with third parties while collecting a debt.

Harassment is also a huge complaint of borrowers against collection agencies, as mentioned above. Collectors may call at all hours of the day, at work, home, on cell phones, and to family members of the debtor. While they are required to cease such communications if informed by the borrowers, collection agencies have been known to keep pursuing debts in violation of such laws. Repeated rude, threatening phone calls have been found to be a violation of the FDCPA.

For example, one collection agency actually had its agents visit a borrower’s home to deliver lawsuit papers and shout outside in a loud voice. They repeatedly yelled the debtor’s name and shouted things like “you need to get your ass out here and open your gate now,” and “you need to come out and get these legal papers now.” One court has found this behavior to be a violation of the prohibition against harassment.

Debtors should also watch out for collection agencies attempting to get them to admit things both the borrowers and debt collector know to be untrue. Even though the collector’s own records showed that a payment had been made, it attempted, though the court discovery process, to get the borrowers to admit it had not been made. The court found this behavior to be abusive, unfair, and an unconscionable practice which violated the FDCPA.

Collection agencies use a lot of devious tactics to pursue debts that they do not even really own. They seem to rely on harassment, deception, and embarrassing borrowers to extract money to keep them quiet. But once they come across a borrower willing to pursue the issue and challenge the debt and the collection practices in court, debt collectors are often found to be in violation of federal lending laws. If the debts they are collecting are legitimate, why is it so difficult for these companies and lawyers to follow a few simple laws?

How Nonjudicial Foreclosure Discourages Homeowners from Saving their Homes

© - flickr

© – flickr

In nonjudicial foreclosure states, homeowners who believe they can fight back against the process face an additional challenge that borrowers in judicial states do not have to deal with. In a nonjudicial foreclosure process, the bank is able to proceed with selling a home at a public auction with no involvement by the local court system. Authority for advertising and selling the property is given in the loan documents themselves.

The most important clause in the deed of trust document for homeowners in nonjudicial states is the “power of sale” clause. Through this, borrowers sign away their right to a fair and meaningful trial to determine if they are in default of the contract or not. The clause also authorizes the lender to follow a certain number of guidelines, meet state requirements for foreclosure, and then have the house auctioned out from under the borrowers.

All of this sounds like a gross violation of individuals’ right to a speedy and meaningful trial, as well as due process rights, and many lawyers assisting borrowers in foreclosure situations tend to agree. The ability of the bank to inform the trustee of its intent to foreclose without providing any evidence of default, even to our admittedly imperfect justice system, gives these lenders a vast amount of power over deed of trust contracts.

Homeowners, it is argued, are able to defend against the process by filing their own lawsuit against the bank in county court and assert their rights and any defenses they have to the foreclosure. However, even this process works against borrowers, as they are now the ones in the position of proving their case against the bank. And court procedures may make the entire lawsuit too expensive to pursue.

For instance, many courts require that homeowners give security in the form of a bond if they are requesting a preliminary injunction or temporary restraining order against the bank’s efforts to pursue foreclosure. The court decides the amount of the bond, and may require financially strapped borrowers to make monthly payments during the period of the lawsuit. This is designed to guarantee payment of court costs and other fees to the bank if it is decided the foreclosure was wrongfully prevented.

This bond requirement, if it is not waived, can present a significant problem for borrowers. While many courts have the authority to waive the bond, they may not always do so, unless the owners can show the bank will not be unreasonably harmed or there is a question of the validity of the deed of trust security instrument. Of course, lenders will fight for higher bonds to make defending the home almost impossible.

It is not only in nonjudicial states that borrowers may face the requirement for providing security in the form of a bond in order to have access to the courts. While it is most common in nonjudicial foreclosure proceedings, it may also be used in cases where homeowners are attempting to stop eviction after a trustee sale, stay a judgment of foreclosure when the case is being appealed, set aside a foreclosure auction, or in other similar circumstances.

Many courts have also found that the failure to post this bond is enough to make the challenge worthless. In one case, homeowners’ appeal of a post-foreclosure eviction was thrown out because they had failed to post a bond. Homeowners attempting to save their homes from foreclosure need to be aware of the bond requirement and how important it is to courts that borrowers pay as much as (or more than) humanly possible in order to prevent foreclosure.

Foreclosure Auction Occurs but Ownership is Not Transferred?

©Ga Home Foreclosures - flickr

©Ga Home Foreclosures – flickr

At the end of the foreclosure process, once all of the notices have been sent and published and the lawsuit has ended, a public auction is held to dispose of the property. This typically called a sheriff sale or trustee sale, and is the event during foreclosure where borrowers’ ownership interest is transferred to the buyer at auction. But sheriff sales do not always go smoothly, and homeowners may need to find out if their home was sold or not.

For instance, if the lender called off the scheduled sale for any reason, homeowners may believe that their property was sold out from under them when they are, in fact, still the owners. Banks cancel auctions for any number of reasons, from not having an inspection done, to waiting for an appraisal, to a response by a request for more time from the borrowers themselves.

Another factor that may cause a sheriff sale to be scheduled but not confirmed is if a third party bids on the home, wins the auction, but can not pay the purchase price. If this is the case, the property may have to be put up for auction again, in the hope of finding a more willing and able buyer. If this happens, though, homeowners may not even know the first auction did not count, as they assume the house was sold and paid for.

This is why, after a sheriff sale, it is important for homeowners to make sure that their home was actually sold and properly confirmed by the county. If the property was not sold, the borrowers may be able to keep living in their home until a valid auction is conducted. This may take an additional two or three months to schedule, conduct, and confirm, and all of this time can be used by the homeowners to save up more money.

There are a number of ways to find out if a property has been sold or if an auction has been confirmed. Possibly the easiest way is for homeowners to call the county recorder’s office or the clerk’s office and ask them to provide the information as to who currently owns the property, as well as any liens on the property right now. If the bank purchased it, there will most likely be no liens, but if a third party took out a loan to buy it, there may be a new mortgage affecting the deed.

This would be the easiest way to determine the status of the sheriff sale, since the county in which the property is located keeps all of the records affecting the property. If the foreclosure went through but there was a problem with the sale, they will be able to give the homeowners that information, while the court will be able to inform them if a new auction has been scheduled yet.

But if no documents have been recorded to show a transfer of ownership, then the house may have to be auctioned again at a later date. Especially if it is a few months after the scheduled auction and no documents to show a transfer of title have been filed, it may indicate that the sheriff sale was not valid. This may be due to any of the reasons listed above, but especially if the high bidder could not pay, the house may just be auctioned again.

In the meantime, the original owners might still have possession and legal ownership rights of the property, just as they had during the foreclosure process. According to many state foreclosure laws, it is the confirmation of the sale that finally transfer ownership to the high bidder at the auction — if that has not been done in a particular case, the borrowers may still own the property for now.

Attorneys Engaging in Loan Modification and Foreclosure Scams

©attorney74136 - flickr

©attorney74136 – flickr

There is an amazing story in the August 2009 issue of the California Bar Journal about the growing number of complaints against lawyers and law firms offering mortgage help to homeowners. From investigating nine such complaints for all of 2008, the California State Bar is now investigating 391 complaints against 140 attorneys. What is causing this huge increase in the number of borrowers complaining about attorneys?

With the rise in the foreclosure rate over the past few years, it seems that many lawyers have gone into the foreclosure assistance business. Even in states like California, where loan mitigation companies are no longer allowed to charge an up-front fee from borrowers, attorneys can still charge a multiple-thousand dollar retainer fee before any work is done for a homeowner. This makes the foreclosure business very lucrative, and very attractive for the corrupt.

Also, what happened to all of the lawyers providing mortgage services during the boom for lenders, title companies, and home buyers? Many states require that borrowers and sellers both have an attorney at closing to represent them. With the falloff in new closings and refinances, these attorneys may have decided to enter the other side of the business — helping homeowners escape the predatory loans the lawyers should have warned about in the first place.

Many homeowners were given loans that were either misrepresented to them or were simply not explained at all. Too many lawyers hired to make sure the borrowers understood the terms of the contracts did very little other than collect several hundred dollars at the closing table. The law requiring legal counsel before a real estate closing had more to do with injecting unnecessary legal fees into the housing market than creating educated borrowers.

Some of the complaints against these lawyers now providing loan modification services are the same ones homeowners routinely file against loss mitigation companies. Some of the complaints involve no service being provided, up-front fees that are collected but no work is done, no refunds even though no work is done, instructing homeowners to stop contacting their lenders, even attempting to transfer money directly out of a borrower’s bank account.

This indicates that some lawyers have entered the loan modification business essentially just to steal money from desperate homeowners. Too many companies or law firms take payments from borrowers and then never provide any work — it is one of the most common foreclosure scams around, and one that homeowners keep becoming victims of as they try to save their homes.

But none of this really explains the shocking rise in complaints against attorneys offering foreclosure help. From nine in 2008 to close to 400 in the first seven months of 2009, it seems that more factors than just legal industry corruption are involved. Or, have attorneys in large numbers made the move from other less lucrative practices into the foreclosure business, where they can prey off the huge numbers of people struggling to keep their properties?