Mortgage Assistance Relief Services - Proposed Rulemaking, Rule #546727-00059

Submission Number:
Michael Olenick
Legalprise, Inc.
Initiative Name:
Mortgage Assistance Relief Services - Proposed Rulemaking, Rule
While the public comment period has closed we respectfully petition the FTC to consider the following. Legalprise, Inc. is a legal services company, providing back-office support to attorneys. One of our services is docket tracking and aggregation across multiple jurisdictions. Though not the primary focus of our business our databases allow us to monitor notices of appearance in foreclosures, that is, we are able to see how many individuals actually hire licensed attorneys to defend foreclosures. While even our data is skewed towards the high side, because some defense counsel are actually related entities making appearances, it appears that about 4-percent of homeowners hire licensed attorneys to represent them in foreclosures. This number has risen from about 3-percent of homeowners over the past year. Obviously all banks have licensed attorneys representing them. Legalprise, Inc. would likely benefit from the new rules in that one of our primary products is a Legal Customer Relationship Management which would become necessary to fulfill the heightened record-keeping functions required of attorneys under this rule. However, since many of our clients are attorneys that represent debtors we are alarmed by the scope of the law and have concerns -- well articulated by the American Bar Association -- that it is over-broad. [Legalprise, Inc. does no work whatsoever for non-attorneys, we are not a MARS agency and the rule would have no effect on us directly.] Specifically the notion that foreclosure defendants should negotiate, presumably pro se, with attorneys that represent banks bothers us. This is especially true in light of the fact the Fair Debt Collection Practices Act explicitly prohibits debt collection agencies from contacting debtors represented by counsel. We find it impossible to reconcile the FTC's belief that the FTC has Congressional authority to encourage or require behavior Congress has clearly banned. We applaud the FTC for working to eliminate the non-attorney charlatans who arguably are not only ineffective but oftentimes make matters substantially worse for litigants. However, foreclosure defense litigants clearly have a right to counsel and the adversarial system does not function well when one party is a licensed, experienced attorney and the other a pro se litigant. We therefore strongly encourage the FTC to adopt the stance of the ABA, to exempt licensed attorneys from this rule, and leave attorney regulation to the states. Respectfully submitted, Michael F. Olenick Founder Legalprise, Inc.