The Florida Bar’s Ethics Hotline recently has received numerous calls from lawyers around the state who have been contacted by nonlawyers seeking to set up an arrangement in which lawyers are involved in loan modifications, short sales and other foreclosure related rescue services on behalf of distressed homeowners.
The nonlawyers – including mortgage brokers, financial management advisors and foreclosure “consultants” – have proposed lawyers with a variety of agreements for services to lawyer’s clients.
The Foreclosure Rescue Act, in effect since October 2008, imposes restrictions on non-lawyer loan modifiers to protect distressed homeowners.
Of note, many proposals violate ethics rules and may subject attorneys to discipline.
Bar members cannot:
• Pay referral fees or give anything of value to nonlawyers for referring distressed homeowners.
• Be paid by nonlawyers to provide services to distressed homeowners.
• Directly or indirectly divide fees with nonlawyers.
• Provide legal services for distressed homeowners while employed as in-house counsel for any nonlawyer company, form a company with a nonlawyer to perform foreclosure related services under practice of law or assist nonlawyers or companies in providing services not authorized to provide.
• Assist in violating provisions of the Foreclosure Rescue Act.
• Contact distressed homeowners to offer representation or have someone else contact them on their behalf.
• Accept referrals from nonlawyers acting as a lawyer referral service.
• Have indirect relationship with distressed homeowner who hires a lawyer for representation.
For more information on potential violations or questions regarding ethical behavior, call the Florida Bar Unlicensed Practice of Law Department at (850) 561-5840.
– Courtesy Florida Bar News