I received a few fascinating calls in the last couple of weeks that I have not written about yet because I thought it was just a fluke. But then I read about it in the California Bar Journal this week. Mortgage brokers are calling clients and attorneys trying to match them up together.
So, it goes like this. Mr. Consumer took out a mortgage in 2004 with Broker A. Broker A makes some money on that deal. Now, Mr. Consumer cannot afford his mortgage. He calls Broker A. Broker A tells him that he can set up Mr. Consumer with attorney B to modify the mortgage. Broker A then gets a referral fee from the attorney.
There are so many problems with this. Broker A may have committed malpractice and may be trying to avoid anyone looking at that by now helping Mr. Consumer. Also, the attorney cannot pay a referral fee or a finders fee to a non-attorney. In addition, there may be privacy issues with something like this.
If you think you need a modification, do not call your mortgage broker. Talk to an attorney about your options and find one independent of your mortgage broker.