Where should we file this legislative botch? Perhaps we should file it under incompetence, lack of diligence, irresponsibility, or inexcusable ignorance of unintended—but completely predictable–consequences.

In California, a statute  passed overwhelmingly by the State Legislature required that lawyers who work on loan modification agreements for homeowners facing foreclosure cannot require any payment until the work is complete. The law was intended to eliminate unscrupulous firms from running scams on desperate Californians, more of whom face foreclosure than in any other state, in which the firms charged large up-front fees and then did nothing. Unfortunately, it also made it unprofitable and risky for legitimate, honest lawyers to put in many hours battling lenders skilled at running out the clock in the hopes of being reimbursed by clients who are already in financial deep water. Thus stressed California homeowners, having been given protection by their tunnel-visioned representatives, now can find no legal help at all, honest or otherwise. Continue reading →