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Marin Lawyer Faces Disbarment in Foreclosure 'Rescue' Scam Case

mercurynews.comNov 10, 2012

By Nels Johnson

A Greenbrae attorney involved in what court officials called a bogus predatory lending lawsuit scheme and foreclosure rescue scam faces disbarment after a decision by a State Bar Court hearing judge this week.

Sharon L. Lapin, 57, attorney of record in 130 predatory lending lawsuits from August 2009 to November 2010, was charged with 26 counts of professional misconduct and found guilty of most. None of the victims listed in the decision were from Marin County.

Lapin claimed innocence and said she would appeal.

"I never engaged in a scheme to defraud clients," Lapin said Friday as she scrambled to tie up loose ends before losing her license to practice law at midnight.

She was excoriated in a judgment Wednesday after being found "culpable of multiple counts of professional misconduct, including moral turpitude, aiding the unauthorized practice of law, sharing fees with a nonlawyer, participating in a nonlegal lawyer referral service, failure to perform legal services with competence, failure to maintain only legal or just actions and failure to avoid representing adverse interests," the State Bar said in a report by spokeswoman Laura Ernde.

Lapin worked as a contract attorney for an organization that operated under names including US Loan Auditors LLC, US Loan Auditors Inc., My US Legal Services and US Legal Services. She received $177,000 from August 2009 through November 2010 without having to provide legal services, officials said.

"She has no remorse and does not accept responsibility for her actions," Judge Lucy Armendariz said in the decision. "She continued to make excuses and rationalized her fraud. When asked if there was any value that clients received, respondent testified that they were able to stay in their homes that much longer. She insisted, despite overwhelming evidence to the contrary, that she was entitled to the monies as reimbursement for costs. Yet she could not explain how costs could exceed $34,000 per month. She kept no time records of her alleged hourly services to justify her $350 hourly fee."

The court found that homeowners would pay 1 percent of their mortgage value to a foreclosure "rescue" organization for a "forensic loan audit" that was then used to persuade them they had a good case against lenders -- even though the audits merely provided routine boilerplate information. Many legal filings were then handled by organization staffers who were not lawyers.

"As a result, (homeowners) lost thousands of dollars and, in some cases, their homes," the State Bar said.

Robin Brune, a state attorney, argued Lapin used "the secret agent defense -- she is claiming that she knew nothing about the fraud. But a lawyer is not a secret agent. She is bound by ethical duties of absolute transparency and fiduciary duty; her duty of competence and communication. The attorney can't be oblivious to the mission."

Judge Armendariz ordered Lapin's license pulled as of Saturday pending disbarment, which becomes effective when approved by the state Supreme Court.

Lapin said she was a dupe in the program. "I never intended to harm any of my clients," she said. "I became a victim as did the clients. ... It was the mortgage companies ... not me."

Lapin's Los Angeles lawyer, Richard Lubetzky, said evidence supporting her contentions was ignored by the court.

"I just read the opinion. ... My impression is this is a case that was decided before it was started," he said, calling Lapin an unwitting victim who had nothing to do with a scam that fleeced troubled homeowners. When she learned that that sales representatives advised her clients to stop paying their mortgages, she told them to pay up, he said.

"She was not a participant in this scheme to defraud," he asserted.

Ernde said that since February 2009, the State Bar's Office of Chief Trial Counsel has received thousands of complaints against attorneys regarding loan modification fraud. More than 100 attorneys have been disciplined, including 22 who have been disbarred.

Back to November 2012 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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