2 Attorneys Disbarred for Misleading Vulnerable Homeowners

Allison Tussey —  October 8, 2010 — 2 Comments

Brian Colombana, 29, who was placed on involuntary inactive status, stipulated Sept. 17, 2010 that he committed nine acts of misconduct in 12 matters. Less than a week later, Mark Alan Shoemaker, 50, Santa Ana, California, stipulated to disbarment as a result of complaints from 18 homeowners. These two Orange County, California lawyers handled dozens of foreclosure cases and admitted extensive misconduct which lead to their disbarment.

The two become the fifth and sixth lawyers who agreed to be disbarred in the wake of complaints by distressed mortgage holders who paid fees to lawyers who then did little or nothing to help them.

Colombana, who practiced in Laguna Hills, accepted fees totaling nearly $36,000 from 12 distressed homeowners but did not obtain a single loan modification. Eight of the clients live in states where Colombana is not licensed to practice, and he admitted to engaging “in a scheme to defraud these clients, by exploiting them for personal gain and accepting employment where he was not licensed to practice law.”

Two of Colombana‘s clients lost their homes to foreclosure, one had to sell his home at a loss and another cashed in insurance policies to bring the mortgage current and avoid foreclosure.

Colombana affiliated with several loan modification companies, including Loan Negotiators of America, Housing Law Center and Mortgage Relief Law Center. In most cases, he never met his clients. His associates, however, advised them to stop making their mortgage payments. When State Bar Court Judge Richard Honn ordered Colombana to stop practicing in June, he said many homeowners were current but then fell behind. Many “were worse off after retaining (Colombana‘s) services, ” Honn said.

In agreeing to disbarment, Colombana admitted that his misconduct “resulted in significant harm to multiple clients (and) . . . constituted a pattern of willfully failing to perform and a habitual disregard for . . . clients’ interests.”

Colombana, who has been a lawyer only since 2005, received some mitigation for cooperating with the bar’s investigation and recognition of his wrongdoing.

As president of Advocate For Fair Lending (AFFL), Shoemaker promised homeowners “trapped in their mortgages,” that his company could “reduce your payments, interest and balance without refinancing your home.” Clients paid a minimum $1,000 a month for three months for the company’s services.

AFFL promised to audit loan documents, which, Shoemaker said in a stipulation, “had no value to clients.” Demand letters were sent to lenders and when they didn’t respond, AFFL said the client would need an attorney for an additional fee. Shoemaker never acted on any client’s behalf and many clients lost their homes. He also admitted to knowing or being “grossly negligent in not knowing” that AFFL employees who were not lawyers were giving legal advice.

Shoemaker failed to perform legal services competently, refund unearned fees, communicate with clients, account for advanced fees and costs and deposit funds in the client trust account and he charged an unconscionable fee and aided a non-attorney in the practice of law, according to the stipulation. Shoemaker admitted that his misconduct “demonstrates a pattern of willfully failing to perform services and a habitual disregard for his clients.”

 

“The State Bar continues to be vigilant in prosecuting attorneys who have taken advantage of homeowners when they are at their most vulnerable,” said State Bar President Bill Hebert. “The conduct of these lawyers, who make promises they can’t keep and take money their clients can ill afford to pay, is deplorable and we will continue our efforts to protect the public from such behavior.”

Attorneys for the State Bar’s Loan Modification Task Force, created in April 2009, have obtained the resignations of 12 attorneys involved in loan modification misconduct. Six trials are pending and another 1,800 active investigations related to loan modification are underway; more than 4,000 complaints have come through the task force since it was formed.

Chief Trial Counsel James Towery described the results of the task force’s work as “remarkable,” adding, “What the State Bar discipline system is doing to lawyers engaged in loan modification misconduct is historic. The bar has never so aggressively gone after a group of attorneys committing misconduct.”

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Allison Tussey

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2 responses to 2 Attorneys Disbarred for Misleading Vulnerable Homeowners

  1. It’s great that they are disbarring these attorneys. They took advantage of so many people.

  2. I like how even the investigators label the attorneys’ conduct as incompetence…it’s FRAUD AND ILLEGAL, PLAIN AND SIMPLE! These guys need to go to prison!!!

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