State High Court Slams Ohio Lawyer With "6-Month Time Out" For Bad Acts Committed While Associated With Loan Modification Foreclosure Rescue Operator

The Ohio Supreme Court announced last week:

• The Supreme Court of Ohio [Thursday] suspended the law license of Hamilton attorney John T. Willard for one year, with the final six months of that term stayed, for professional misconduct arising from Willard’s participation in a “foreclosure rescue” business in which he accepted client referrals and shared legal fees with non-attorneys who engaged in the unlicensed practice of law.

• The Court adopted findings by the Board of Commissioners on Grievances & Discipline that Willard violated multiple provisions of the Rules of Professional Conduct by partnering with the non-attorney owners of a company called Foreclosure Alternatives. The company identified homeowners against whom mortgage foreclosure actions had been filed and contacted them offering to negotiate a settlement with the lender that would halt the foreclosure process. Under Willard’s arrangement with Foreclosure Alternatives, when a homeowner responded to the company’s solicitation, the company would forward a power of attorney signed by the client and information about the foreclosure action to Willard, who would prepare and file an answer to the lender’s foreclosure complaint without meeting or speaking with the homeowner for a flat fee of $150 that he received from Foreclosure Alternatives.(1) All negotiations with the lender and virtually all subsequent information and advice provided to homeowners about their cases was provided by the company’s non-attorney employees.

In at least 28 cases in collaborating with the non-attorney owners of Foreclosure Alternatives, Willard was found to have violated the Ohio Code of Professional Responsibility rules that prohibit:

• requesting a third party to promote or recommend an attorney’s professional services, DR 2-103(C);
• aiding a non-lawyer in the unauthorized practice of law, DR 3-101(A);
• forming a partnership with a non-attorney, DR 3-103(A), and sharing legal fees with a non-attorney, DR 3-102(A);
• handling a legal matter without adequate preparation, DR 6-101(A)(2); and
• failing to pursue the lawful objectives of a client, DR 7-101(A)(1).

For the Ohio Supreme Court announcement, see Supreme Court Suspends Hamilton Attorney.

For the court's ruling, see Disciplinary Counsel v. Willard, Slip Opinion No. 2009-Ohio-3629 (July 30, 2009).

For other cases of Ohio attorneys getting slammed for associating with loan modification firms, see:

• Cincinnati Bar, Ohio Supreme Court Slam Attorneys Teaming Up With Upfront Fee Loan Modification, Foreclosure Rescue Operators,
• Attorneys Incur License Suspensions For Fee Sharing, Other Violations In Arrangement With Loan Modification, Foreclosure Rescue Operator.

(1) According to the Ohio Supreme Court ruling (see Disciplinary Counsel v. Willard, paragraphs 7-8):

• Under [Willard's] usual protocol for these cases, he would receive a copy of the foreclosure complaint filed against the client and the limited power of attorney from Foreclosure Alternatives. He would then file an answer to the complaint or a motion to strike and send a copy to the client along with a letter stating: “This is a response I filed on your behalf. I had a referral from Foreclosure Alternatives. If there are any other defenses you can think of, feel free to call me.” This letter was the first communication with the client, and, in fact, usually the first occasion for the client to learn the name of his attorney. Out of the 28 or more Foreclosure Alternatives clients, [Willard] discussed cases with only three or four of them. Negotiations with the lender were conducted by Foreclosure Alternatives; [Willard] was not even informed of their progress. The next action [Willard] would take was to notify the company when he received a motion for summary judgment filed by the lender. If the client had no defense, [Willard] sent a letter to the client stating: “A motion for summary judgment was filed. I suggest that you consider a Chapter 13 bankruptcy or a bankruptcy.” [Willard] did not otherwise personally communicate with the client. UnauthPractOfLawTheta