“A unique and effective style -a great mediator”Please notenew Address!Meet the Tax Section’s2010 Incoming President!JONATHON M. MORRISONPracticing Tax and Estate Planning, Tax Controversy,Business, Real Estate, and Non-Profit LawYoungman Ericsson & Low, LLP1981 N. Broadway, Suite 300 • Walnut Creek, CA 94596925.930.6000jmorrison@youngman.com • www.youngman.comand Mediation CenterCandice StoddardRon MullinWillows Office Park p 1355 Willow Way, Suite 110Concord, California 94520Telephone (925) 798-3413 p Facsimile (925) 798-3118Email ronald@mullinlaw.comand his equity, and was spared having totestify against his fellow church member.Mrs. E’s children, not really parties tothe litigation, joined their mother andher stepchildren in the mediation. Theyfigured out what was needed to maintainher standard of living and forged an agreementthat created the necessary streamof income from the “family” business toprovide for her. There were no hard feelingsbetween the family groups. In fact,the mediation gave them an opportunityto reinforce their continuing, positiverelationship after the death of Mr. E.Mr. O and the beneficiaries agreed thathe could remain as trustee, but that hehad to proceed with the assistance of hisattorney and an accountant, and reportto the beneficiaries.The demands of a court appearance, letalone a trial, can be confusing and overwhelmingfor someone suffering the frailtiesof advanced age. Whether it is poor hearing,limited vision, general physical frailty, orsimply the need to maintain a medicationschedule, the reasons formal legal proceedingsare best avoided in favor of mediationare generally not only present, but oftencompelling when a senior is a party.A well-handled mediation can providea comfort level for all participants. It willnot likely have an all or nothing result.There will not be the vindication of a winsuch as at trial. The result is more likelyto be one that truly works for the parties,especially the elderly parties. In additionto what is tangible, the senior will havebeen spared the risks and stresses ofcourt proceedings, without foregoingthe benefits of a thorough exploration ofthe issues and possible solutions. As abonus, the elderly party may even comeaway with some of the dignity and selfrespectafforded by the process, benefitsthat can otherwise be so elusive. u— Arlene Segal is thepresident of CCCBA’s ElderLaw Section. Her litigationand mediation practicefocuses on real property issues,trust/estate disputes, andfinancial abuse of elders.12 November 2009
ALERT!Legislature Prohibits Advance Fee Retainer Agreementsfor Residential Mortgage Loan Modificationsby Karl E. GeierNew legislation signed by the Governor onOctober 13 imposes a number of restrictionsupon third parties who attempt to assistborrowers in the negotiation of loanmodifications, forbearance and similartransactions. While no doubt motivated bya desire to thwart fraudulent and deceptivepractices of predatory opportunists holdingthemselves out as mortgage modificationconsultants, the legislative process hasresulted in a statute that may discouragelegitimate advisors and counselors, includingattorneys, from representing borrowersin troubled loan situations.Under SB 94 (Calderon), effective as anemergency measure as of October 13, 1 anyattorney or other person who requiresadvance consideration or security for futurepayment from a borrower as a conditionof providing loan modification or forbearance-relatedservices commits a violationof Civil Code §2944.7. This statute appliesto any such agreement where the mortgageis secured by residential real propertycontaining four or fewer dwelling units.There are no exemptions for any sort ofpreexisting attorney-client relationship orother criteria. The penalty for violationis a fine of $10,000, a jail term of oneyear for the individual, as well as a $50,000fine for a business entity. The operativelanguage of the statute prohibits any person(including an attorney) from requiringcompensation until the person has fullyperformed each and every service contractedto perform, and prohibits any suchperson from taking “any wage assignment,lien, or other security to secure the paymentof compensation” or any power of attorneyfrom the borrower for any purpose. Ineffect, it is illegal and a criminal offense torequire an upfront retainer as part of a legalengagement with a client who falls withinthe statutory provisions. Further, underBusiness & Professions Code §6106.3, theviolation of §2944.7 by any attorney iscause for discipline of the attorney.As a result of this statute, any legalengagement that may involve the provisionof advice or assistance in negotiatinga modification, forbearance or other revisionsof the loan terms or the remedies ofa lender where the borrower’s securityproperty consists of a one to four familyresidential property (whether or not owneroccupied) will require careful scrutinyand compliance. The Legislature mightnot have intended the term “security”or “advance compensation” to includestandard attorney retention agreements,but the language of the statute does notsupport a contrary interpretation.Under a second provision, also enactedas an urgency measure under SB 94, anyattorney or any other person attemptingto represent a borrower in the negotiationof a loan modification or forbearance, priorto entering into any fee agreement withthe borrower, is required to provide to theclient, a separate statement in not less than14 point bold type, containing a specificdisclosure prescribed by the statute, to theeffect that it is not necessary for a borrowerto pay a third party to arrange for a loanmodification or forbearance. 2 This provisionmust be provided in the language inwhich the mortgage loan forbearanceservices are offered or negotiated if theretainer agreement is negotiated in one ofthe six languages other than English thatare specified in Civil Code §1632. A violationof this statute also is a public offensefor which the individual is subject to a fineof $10,000 and a one-year jail term, anda business entity is subject to a fine of$50,000. Again, it only applies to residentialreal property containing four or fewerdwelling units. Under Business and ProfessionsCode §6106.3, a violation of CivilCode §2944.6 by any attorney is alsogrounds for discipline of that attorney. u— Karl E. Geier is a shareholder of MillerStarr Regalia and Editor in Chief of Miller& Starr California Real Estate 3 rd .12009 Status., Ch. 94 (SB 94, Calderon).2The full text of this disclosure is as follows: It is notnecessary to pay a third party to arrange for a loanmodification or other form of forbearance from yourmortgage lender or servicer. You may call your lenderdirectly to ask for a change in your loan terms. Nonprofithousing counseling agencies also offer these andother forms of borrower assistance free of charge. Alist of nonprofit housing counseling agencies approvedby the United States Department of Housing andUrban Development (HUD) is available from yourlocal HUD office of by visiting www.hud.gov.925.790-2600 • info@amllp.com • www.amllp.comNicole M. Mills, Esq.Mediation ServicesSpecializing inElder and Civil MediationpMills ADR Services(925) 351-3171nicolemillsesq@yahoo.com<strong>Contra</strong> <strong>Costa</strong> Lawyer 13