Law Firms in Los Angeles Busted For Fraud

Law Firms in Los Angeles were taking advantage of distressed homeowners

In 2011, California broke up a network of law firms in Los Angeles that have fraudulently forced distressed homeowners nationally to pay thousands of dollars each to file mass litigation against their mortgage lenders.

Kamala Harris, who was the state's attorney general back in 2011, sued several Los Angeles law firms, California attorneys, and 14 other businesses and individuals who preyed on desperate borrowers to get mortgage relief.

She stated at the time that the defendants took advantage of the dissatisfaction of borrowers with lenders and servicers in a housing crisis that hit California hard after the mortgage crisis of 2009.

"The state said in its complaint filed in the Los Angeles County superior court, "With the industry's increasing reputation for fraud and the legislative prohibition on advance payments for loan modification services, defendants saw a more lucrative opportunity to market litigation rather than loan modifications.

According to officials at the time, the defendants asked homeowners to engage in "mass joinder" litigation in 17 U.S. states of at least 2 million pieces of mail and extracted retainer fees of up to $10,000 from each of approximately 2,500 families.

Harris explained back then that these law firms in Los Angeles would mislead borrowers into thinking that their involvement would help them escape foreclosures, minimize their loan balances or interest rates, or even give their homes a clear title.

Instead, she stated that poor legal advice was frequently given to borrowers or that they were unable to get answers to basic queries, like whether they were actually associated to litigation. A disproportionate amount, officials said, were African-American and Hispanic families.

During a news conference, Harris said that victims were led to believe that the litigation "would be the way they could get justice." "Those homeowners were the only people who paid."

The California State Bar disciplined several lawyers and Los Angeles law firms for ethical misconduct, fraud, and for violating professional standards. The lawsuit was charged with violations of many laws, as well as damages and other remedies, and was aimed to deter unlawful activities.

About Kamala Harris

In 2017, Kamala D. Harris, the second African-American woman and first South Asian-American senator in history was sworn in as a U.S. Senator for California. She serves on the Committee on Homeland Security and Government Relations, the Special Committee on Intelligence, the Judiciary Committee, and the Budget Committee.

Kamala spent her life battling against injustice. It is a passion that her mother, Shyamala, an Indian-American refugee, activist, and breast cancer researcher, first inspired.

Growing up in Oakland, Kamala had the Civil Rights movement's stroller-eye view. Kamala learned the kind of character it takes to stand up to the strong through the example of brave leaders such as Thurgood Marshall, Constance Baker Motley, and Charles Hamilton Houston and vowed to protect those who could not fight for themselves.

She started her career in the Alameda County District Attorney's Office after receiving a degree from the University of Howard and a law degree from the University of California, Hastings.

Kamala became the City and County of San Francisco District Attorney in 2003. Harris began a program among her successes as District Attorney that offers first-time drug offenders the chance to receive a high school diploma GED and find jobs.

Kamala was elected as the first woman and the first African-American to serve as California's Attorney General after having served two terms as the District Attorney of San Francisco. She worked diligently in this position to keep businesses accountable and protect the most vulnerable citizens in the state.

Kamala secured a $25 billion settlement for California homeowners affected by the mortgage crisis during her nearly two terms in office, defended California's landmark climate change legislation, secured the Affordable Care Act, supported marriage equality for all Californians, and prosecuted transnational gangs that trafficked weapons, narcotics, and women.

Kamala's role remains unchanged in the United States Senate: to campaign for the interests of all communities in California. She has introduced and co-sponsored legislation since taking office to increase salaries for working people, overhaul our dysfunctional criminal justice system, make healthcare a right for all Americans, combat the opioid addiction crisis, help veterans and military families, and improve access to childcare for working parents.

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