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06/11/14

REPORT: ATTORNEYS AND THE FORECLOSURE RESCUE FRAUD EPIDEMIC

The Lawyers' Committee for Civil Rights Under Law (Lawyers’ Committee) and its coalition partners in the Loan Modification Scam Prevention Network (LMSPN) have been tracking the foreclosure rescue fraud crisis since March 2010. As of early 2014, the national Loan Modification Scam Database, managed by the Lawyers’ Committee, has compiled over 40,000 complaints with total reported losses of over $90 million to homeowners.

A particularly troublesome trend is the increasing prevalence of legal services entities (real or not) and attorneys among the scam complaints gathered in the Lawyers’ Committee’s Database. According to Database complaints, attorneys appeared to be jumping into foreclosure rescue fraud beginning in early 2011. The Lawyers’ Committee began to look more closely at these scams that allegedly involved attorneys and the impact this trend had on the foreclosure rescue fraud fight.  Did attorney involvement cause more harm to complaining homeowners? Does the “sales pitch” of scammers change with the involvement of attorneys? Are attorneys involved in foreclosure rescue services actual attorneys engaging in the authorized practice of law?

Read the Report here