Schwarzenegger Squeezed By Lenders, Servicers To Demand Rule Prohibiting California Attorneys From Accepting Retainers For Loan Mod Negotiations???

A press release issued by three California consumer advocates(1) announces:

• The lending industry and loan servicing lobbyists have successfully pressured Governor Schwarzenegger to demand that language be included in SB 94 that would prohibit attorneys from accepting retainers for loan modification negotiations with their loan servicers.(2) The language, if adopted, will prevent homeowners from seeking legal representation to save their home from foreclosure.

For the rest of the press release, see Lending Industry Attacks California Homeowner's Rights to Legal Representation (California Governor Arnold Schwarzenegger told the legislature over the weekend that he would not sign AB 94, a law that would protect homeowners from mortgage modification companies, unless they included a clause that would prohibit attorneys from accepting retainers for performing legal services to prevent foreclosures).

(1) Martin Andelman, of mandelmanmatters on ml-implode.com; Alan Jablonski, a Long Beach, CA based consumer rights attorney, J. Arthur Roberts, a bankruptcy attorney located in Newport Beach, CA.

(2) Reportedly, the language proposed is as follows, according to Martin Andelman:

• "5) Prohibits persons including attorneys, until January 1, 2013, who negotiates, attempts to negotiate, arranges, attempts to arrange, or otherwise offers to perform a mortgage loan modification or other compensation paid by the borrower to do any of the following:
  a) Claim, demand, charge, collect, or receive any compensation until after the licensee has fully performed each and every service the licensee contracted to perform or represented that he/she would perform."