There has always been a seamy underbelly to home mortgage modifications. Let's face it, a whole crop of scam artists emerged to take advantage of desperate people. To combat this, the state of California passed a law that forbids homeowners from paying lawyers who work on loan modifications until the work is complete.

That has led more lawyers to take on much fewer modification clients, given the uncertain prospects for ever being paid, according to the New York Times. A modification is hardly a sure shot.

So that has left more people facing foreclosure with no honest legal help. Since California is one of the nonjudicial states, homeowners must deal with banks directly outside of a state court. This is daunting for many, especially those with complex cases.

This also throws into the spotlight alternative payment options. People chuckled derisively when they heard about lawyers in Florida who were placing liens on the properties they helped save from foreclosure, essentially asking folks to take another mortgage to pay their fees over time. This may seem sleazy to some. But at the end of the day, honest lawyers deserve to be paid. While I doubt we'll see this in California, there is still a huge need for a tweaked rule on payments.

For more:
- here's the article

Related Articles:
Wells Fargo to provide $2.4B in relief to California homeowners
New Jersey judge to suspend foreclosures?
Two states sue Bank of America over foreclosures, modifications