Will the Federal Consumer Protection Bureau and the State Bar Ensure Recovered Funds Go to Defrauded Homeowners?
Doesn't Look Like It
The California State Bar has warned attorneys for a long time: don't handle homeowner mortgage foreclosures. In fact, those warnings started in 1978 after our state Legislature. The warnings started in earnest in 2008-2009 when, the State Bar issued an ethics ruling alerting lawyers to the ethical problems with loan foreclosures. We listened; we've never handled a homeowner loan foreclosure.
Apparently, though, the message didn't reach everybody, and perhaps most notoriously, now suspended Chance Edward Gordon. Go ahead. Click on that last link and see the State Bar's warning to consumers. In fact, every time you hire an attorney, you should check with the State Bar to ensure the lawyer is licensed. Mine's here for comparison purposes.
Well, it turns out that Mr. Gordon handled forclosures from 2010 to 2012, and collected a lot of money from homeowners facing foreclosure. More than $11 million dollars. That's right. $11 million from people who had no money left to pay their mortgages.
Now, the Federal Consumer Protection Bureau has fined Mr. Gordon $11.4 million dollars, seeking to disgorge the fees he collected. He fought and just lost before the Ninth Circuit Court of Appeals, and he's likely reached he end of the appeal road, and will have to start forking over money.
I have a few questions. First, why didn't the State Bar collect this fine? Apparently, the State Bar found out about Mr. Gordon after he was sued by the FCBP, and decided to pile on, but left the collection of money up to the Feds. And what is the State Bar of California Anti-corruption League that's referenced on Mr. Godon's State Bar profile?
Second, will the $11.4 million go back to the very same people he took the money from, or will the money go to the coffers of the FCPB? Becuase the FCBP's webpage about Mr. Gordon makes no mention of the money going back to the homeowners.
Sure, Mr. Gordon defrauded homeowners, but it looks like their losses aren't going to end there.