Some lawyers profit off foreclosure fears, loan mods

A loophole in state and federal laws has made it easy for some attorneys to take advantage of Illinois residents struggling to keep their homes.


Attorneys are among the few professionals who can legally charge upfront fees to help homeowners modify their mortgages. But instead of negotiating with a lender, some attorneys or the companies they work for just keep the cash and don't complete the job. Homeowners are often unaware until it's too late and their homes are in or near foreclosure.

A year and a half ago, Henry Vega paid $2,495 to Skokie attorney David Mierswa for a loan modification. But neither Mierswa nor a company he worked with did the job, according to the Illinois attorney general's office.

"I still don't have a loan modification," said Vega, who is trying to modify the mortgage for his Berwyn home. Mierswa declined to comment.

Loan modification schemes have flourished throughout the country as the financial and mortgage crisis squeezed consumers. In 2006 Illinois passed legislation that banned charging upfront fees for loan modifications.

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