In an unprecedented move that can only be described as stunning ignorance, the California State Bar recently released a legal opinion that will effectively deny legal representation to millions of homeowners faced with foreclosure. The controversy is around SB 94, a law put into effect in 2009 that was meant to protect homeowners from predatory loan modification companies.
As with any crisis, when people are in trouble or desperate, other people jump into action to take what little money those desperate people have left. While SB 94 was little more than an imperfect knee-jerk reaction to systemic fraud, it was supposed to protect homeowners from scammers who promised to get loans modified, took hefty upfront fees, and were never heard from again. These scumbags were generally former mortgage brokers, also known as Department of Real Estate Licensees (DRE), looking to make up some of the losses from the meltdown by recycling the suckers they had sold homes to during the drunken housing orgy.