Mortgage Assistance Relief Services - Proposed Rulemaking, Rule #546727-00068

Submission Number:
546727-00068
Commenter:
John Gabel
Organization:
Gabel Legal Services, L.L.C.
State:
MD
Initiative Name:
Mortgage Assistance Relief Services - Proposed Rulemaking, Rule

As an attorney who helped several families in this foreclosure crisis through pro bono services, I am very upset by the proposed rules. First, let me say that I understand the need to protect consumers from bad actors in the MARS industry. I also understand that attorneys have participated in some of these bad acts. That does not justify the burdens being placed on attorneys that will drastically decrease the services available to homeowners in trouble. The worst of these is the tape-recording requirement. Attorneys must be exempt from these requirements because of their duties of confidentiality. How can attorney-client conversations be reviewable by a third party without violating attorney-client privilege absent forcing client waivers of their rights? This is not in keeping with protecting the client, particularly if these conversations will later be discoverable by foreclosing lenders as a result of the violation of the privilege. The other major problem is the fee limitation. You are telling attorneys, many of them younger (like myself), newly out of law school (like myself), and with little to no ability to carry the overhead costs of providing assistance absent receipt of SOME fees, that they can't collect a fee from clients who are the very definition of credit risk until the close of the matter. These matters typically take over 6 months to as long as a year. Statistically something like only 10% of these are "successful" (although during the intervening year, the homeowner was not kicked out of their home because of the efforts of the "MARS" attorney, that is a kind of success right?) As a result, young attorneys under mountains of debt from student loans and struggling to stay out of foreclosure themselves have only a 10% chance of getting paid after a 6 months to a year of work. That does not seem in the least bit fair. I would ask that FTC provide a broader exemption for attorneys so that they can afford to EAT. Mandatory Escrows work. TY.