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More loan mod lawyers busted!

October 13th, 2010 · 1 Comment · Mortgage Fraud

The California State Bar has prosecuted and disbarred Brian Colombana and Mark Alan Shoemaker.  From their press release:

"Colombana, who practiced in Laguna Hills, accepted fees totaling nearly $36,000 from 12 distressed homeowners but did not obtain a single loan modification. Eight of the clients live in states where Colombana is not licensed to practice, and he admitted to engaging “in a scheme to defraud these clients, by exploiting them for personal gain and accepting employment where he was not licensed to practice law.”

Two of Colombana’s clients lost their homes to foreclosure, one had to sell his home at a loss and another cashed in insurance policies to bring the mortgage current and avoid foreclosure.

Colombana affiliated with several loan modification companies, including Loan Negotiators of America, Housing Law Center and Mortgage Relief Law Center. In most cases, he never met his clients. His associates, however, advised them to stop making their mortgage payments. When State Bar Court Judge Richard Honn ordered Colombana to stop practicing in June, he said many homeowners were current but then fell behind. Many “were worse off after retaining (Colombana’s) services, “ Honn said.

In agreeing to disbarment, Colombana admitted that his misconduct “resulted in significant harm to multiple clients (and) . . . constituted a pattern of willfully failing to perform and a habitual disregard for . . . clients’ interests.”

As president of Advocate For Fair Lending (AFFL), Shoemaker promised homeowners “trapped in their mortgages,” that his company could “reduce your payments, interest and balance without refinancing your home.” Clients paid a minimum $1,000 a month for three months for the company’s services.

AFFL promised to audit loan documents, which, Shoemaker said in a stipulation, “had no value to clients.” Demand letters were sent to lenders and when they didn’t respond, AFFL said the client would need an attorney for an additional fee. Shoemaker never acted on any client’s behalf and many clients lost their homes. He also admitted to knowing or being “grossly negligent in not knowing” that AFFL employees who were not lawyers were giving legal advice."
 

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One Comment so far ↓

  • Fran Delamo

    Do we have any idea of the exposure in California for falsified foreclosure paperwork? I am told the fine is $25K per offense in CA…if we have 17% of the nation’s foreclosures, how many do we suspect are impacted?

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