Foreclosure Defense Florida

An Open Letter To Candidates for The Florida Bar Regarding Foreclosures

For the first time in many years, two attorneys are competing to become the President of the Florida Bar, Ervin Gonzalez of Coral Gables and Scott Hawkins of West Palm Beach.   An article regarding the contest can be found here. The following letter is being published and sent to the candidates by a member of the Florida Bar’s Committee.   Many lawyers that represent consumers are deeply concerned about the unethical practices that are being used to victimize consumers, and those concerned lawyers want to know how or if the Florida Bar is prepared to stand up and protect consumers.

Millions of consumers in Florida have been negatively affected, either directly or indirectly, by the foreclosure   crisis that continues to grip the country and which is concentrated in Florida. Consumers who find themselves in foreclosure are directly affected by the crisis but every citizen is affected as the crisis continues and property values continue to fall.

A contributing factor in the scope and magnitude of the crisis is the fact that mortgage brokers, title agents, con artists and an assorted cast of unscrupulous characters preyed on the unsophisticated and unprotected. True some attorneys may be included among the cast of bad actors, but their numbers are small and all members of the Bar undoubtedly support their prompt dismissal from the ranks of practicing attorneys.

In the midst of this crisis it is widely perceived by those who practice in real estate/consumer law that the Florida Bar has consistently ignored the interests of real estate/consumer attorneys and that the Bar is not doing nearly enough to protect consumers who continue to be victimized by con artists and out of state attorneys who are preying upon them in the middle of this crisis.

Consumers who have been served with a foreclosure lawsuit are aggressively targeted by loan modification companies operating both in the state and from out of state.   Many such firms emphasize their actual or fictitious affiliation with out of state attorneys or law firms then make direct and specific promises that they can absolutely save the consumer’s home and stop the foreclosure process.   I have emailed several of these companies, told them I’m in foreclosure then asked them if I should hire a Florida attorney.   They have responded, “Absolutely not.   You don’t want a Florida attorney, Foreclosure is federal law.   We’re based in California where the lenders are and you need a California based attorney.”   That’s just one example, but this problem is epidemic. The Florida Attorney General’s Office is doing a great job of pursing this problem, but the Florida Bar seems unwilling to address this problem as aggressively as it should.   The reality is that consumers who fall victim to these schemes do not distinguish that the lawyer or law firm might have been out of state, they only perceive that they have been victimized by an attorney.

Although it’s bad enough that the Florida Bar is not being proactive in response to this crisis, I am even more concerned by the Bar’s recent failures to protect our existing scope of practice.   In 2008, the Florida Bar allowed a law to take effect which made it a violation of law for attorneys to represent homeowners in foreclosure or bankruptcy. (See the 2008 version of F.S. 501.1377)   The Attorney General subsequently issued a letter clarifying that while the law did in fact make the practice of law illegal, that was not what was intended.   Was the Bar aware of this piece of legislation or did the Bar simply not understand the issue and allow this bad law to pass?   An attorney exemption was hastily added (See the 2009 version of 501.1377) which reads as follows:

An attorney licensed to practice law in this state who provides foreclosure rescue-related services as an ancillary matter to the attorney’s representation of a homeowner as a client.

This is bad language because it encroaches on the broad scope of practice that attorneys are entitled to if an agency other than the Bar might be asked to determine whether the attorney’s representation is in fact ” ancillary” to that attorney’s representation of the client.

While it was disconcerting to me that the Florida Bar would allow a law to pass that made the practice of law illegal in the first place, I am even more concerned that a similar situation was permitted to occur again in the 2009 legislative session when yet another bill with this ” ancillary” language passed that once again encroaches on broad scope of practice attorneys have earned.   I wonder whether the Bar fall asleep again or whether this bad law was allowed to pass with the Bar’s consent?   The issue is as follows:

Chapter 2009-241 was signed into law by Governor Crist on June 29, 2009.   This law, which amends the mortgage lending and brokering licensing statute, includes an amendment which again improperly restricts the practice of law and which must be amended.   The 2008 and previous versions of Florida Statutes contained the following attorney exemption:

494.003   Exemptions– (e)   Any person licensed to practice law in this state, not actively and principally engaged in the business of negotiating loans secured by real property, when such person renders services in the course of her or his practice as an attorney at law.

The exemption has now been restricted and reads as follows:

494.00115 Exemptions”” (d) An attorney licensed in this state who negotiates the terms of a mortgage loan on behalf of a client as an ancillary matter to the attorney’s representation of the client.

Many attorneys are now actively involved in foreclosure defense and other issues relating to mortgages and real estate.   All exemptions relating to our scope of practice should be broad, unrestricted and consistent throughout Florida Statutes. The exemption should simply read, ” An attorney licensed to practice law in this state.”

The thousands of attorneys who are ethically representing homeowners in foreclosure dramatically improve the public’s perception of attorneys and the Bar in general because we serve them in a time of acute crisis and provide service with a value that far exceeds the fees charged.   The Florida Bar should not be allowing any language to pass which encroaches on our scope of practice and it certainly should not allow this be occurring in the middle of an acute crisis.
Every crisis presents an opportunity. The ongoing foreclosure crisis presents the Bar with a unique and powerful opportunity to provide real service to consumers and citizens who find themselves in peril.   What will you do, as president of the Florida Bar, to ensure more laws are not permitted to pass which further encroach on the attorney’s scope of practice and how will you use your position to protect consumers from continued harm caused by out of state attorneys and other unscrupulous individuals?

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