Official NACBA Communication
To all California NACBA members:
I am writing to let you know that last Friday, NACBA's Board of Directors approved our taking action to oppose pending state legislation (Assembly Bill 764/Senate Bill 94), which would bar attorneys from requesting or receiving advance retainers for work on loan modifications for borrowers. This blanket prohibition on attorneys surfaced only recently, reportedly on the demand of Governor Schwarzenegger, and was added to legislation supported by various consumer advocates to address scam artists in the state who have been ripping off desperate homeowners. The language in the Assembly version would both prohibit an attorney from receiving an advance retainer for loan mod work and bar payment to the attorney for such services ever in the event the loan mod is not granted to the borrower. So not only would an attorney be barred from payment in advance for legal services, the attorney would also be denied the right to be compensated for work already performed if the lender turned the loan mod application down for any reason.
WE NEED YOUR HELP TODAY TO CONTACT YOUR STATE ASSEMBLY MEMBER AND STATE SENATOR TO LET THEM KNOW YOU STRONGLY OPPOSE THIS LEGISLATION CONTAINING RESTRICTIONS ON ATTORNEYS REPRESENTING CONSUMERS.
The relevant language in the latest version of AB 764 that affects attorneys charging retainers, as amended in the Assembly Judiciary Committee on 7/9/09, reads:
Business and Professions Code Section 6106.4. (a) It shall constitute cause for the imposition of discipline of an attorney within the meaning of this chapter for an attorney to engage in any conduct prohibited under Section 2944.6 of the Civil Code.
Civil Code Section 2944.6. (a) Notwithstanding any other provision of law, it shall be unlawful for any person who performs loan modification services as described in subdivision (b) to claim, demand, charge, receive, or collect a fee paid for by the borrower for loan modification agreements until the terms of that loan have been modified.
NACBA's position is that while there have been a very few law firms implicated in loan modification abuses, adequate legal recourse against bad actors in our profession already exists, including disbarment and criminal prosecution for fraud. Because other fly-by-night scammers can pack up and move on to greener pastures on very short notice and don't have a bar license to lose, it is understandable why consumer advocates would seek protections for consumers against those predators.
However, placing blanket retainer restrictions on attorneys whom consumers may need to represent them is an unconscionable effort to interfere with their legal rights. We also know that the bills under consideration in Congress addressing judicial modification have included requirements for debtors to make a proper request for a HAMP loan modification to be eligible to seek a home mortgage modification in bankruptcy. It is highly foreseeable that bankruptcy attorneys across the nation will need to be closely involved in pre-bankruptcy loan modification proposals if such bankruptcy legislation does pass. Of course, if homeowners are effectively barred from retaining an attorney to help them, lender misconduct in the processing of a loan mod will be much more likely to be uncovered. Given the widespread and well-documented refusals by lenders to grant loan mods, lender violations of HAMP will get little or no scrutiny - and surely no consequences for the lenders.
Finally, this effort to restrict lawyers representing consumers can be seen as an extension of BAPCPA's insidious attempt by banking interests to limit legal access and recourse for bankruptcy debtors.
This legislation is working its way very quickly through the California Assembly, with little or no discussion of the attorney bar provision. The next stop prior to a full vote in the Assembly will be a hearing before the Assembly Appropriations Committee. It may pass the Assembly within the week, and will be sent back to the Senate for further action.
NACBA's Board of Directors is urging you to immediately contact your individual state legislators and the following key Assembly and State Senate members to educate them on the danger of this provision and to urge their opposition to it (or to the bill, if the provision is not withdrawn). PLEASE ACT NOW - TIME IS OF THE ESSENCE.
Ike Shulman
Chair, NACBA Legislative Committee
CONTACT INFORMATION:
Assembly Speaker Karen Bass:
Email: speaker.bass@assembly.ca.gov
Capitol Office
1303 10th Street, Room 219
State Capitol
Sacramento, CA 95814
(916) 319-2047 (916) 319-2147 fax
District Office
5750 Wilshire Blvd., Suite 565
Los Angeles, CA 90036
(323) 937-4747
(323) 937-3466 fax
Assembly Appropriations Committee Chair Kevin de Leon:
Email: Assemblymember.deLeon@assembly.ca.gov
Capitol Office
State Capitol, Room 2114
Sacramento, CA 94249
Phone:(916) 319-2045
Fax: (916) 319-2145
Los Angeles District Office
360 West Avenue 26
Los Angeles, CA 90031
Phone: (323) 225-4545
Fax: (323)225-450
State Senate Judiciary Committee Chair Ellen Corbett:
Email: Embedded in website HERE:
Capitol Office
State Capitol, Room 5108
Sacramento, CA 95814
Phone:(916) 651-4010
Fax: (916) 327-2433
San Leandro District Office
1057 MacArthur Blvd. Suite 206
San Leandro, CA 94577
Phone: (510) 577-2310
Phone: (408) 286-0329
Fax: (510) 577-2308
Fremont District Office
39155 Liberty St., #F610
Fremont, CA 94538
Phone: 510-794-3900
Fax: 510-794-3940
State Senator Ron S. Calderon (Chief Sponsor of SB 94):
Email: Embedded on website HERE
Capitol Office
State Capitol, Room 5066
Sacramento, CA 95814
Phone: (916) 651-4030
Fax: (916) 327-8755
District Office
400 N. Montebello Blvd., Suite 100
Montebello, CA 90640
Phone: (323) 890-2790 Fax: (323) 890-2795
Link to list of /contact info for California Assembly members:
http://www.assembly.ca.gov/clerk/MEMBERINFORMATION/memberdir_1.asp
Governor Arnold Schwarzenegger
State Capitol Building
Sacramento, CA 95814
Phone: 916-445-2841
Fax: 916-558-3160
Email: Embedded on website HERE
District Offices:
Fresno Office
2550 Mariposa Mall #3013
Fresno, CA 93721
Phone: 559-477-1804
Fax: 559-445-5328
Los Angeles Office
300 South Spring Street
Suite 16701
Los Angeles, CA 90013
Phone: 213-897-0322
Fax: 213-897-0319
Riverside Office
3737 Main Street #201
Riverside, CA 92501
Phone: 951-680-6860
Fax: 951-680-6863
San Diego Office
1350 Front Street
Suite 6054
San Diego, CA 92101
Phone: 619-525-4641
Fax: 619-525-4640
San Francisco Office
455 Golden Gate Avenue
Suite 14000
San Francisco, CA 94102
Phone: 415-703-2218
Fax: 415-703-2803
Washington D.C. Office
134 Hall of the States
444 North Capitol Street NW
Washington D.C. 20001
Phone: 202-624-5270
Fax: 202-624-5280
