Monday, November 8, 2010

Lawyer Who Took $36,000 From Homeowners Facing Foreclosure Is Disbarred, Says It's Not His Fault

By Amanda Bronstad

The National Law Journal

A California lawyer will submit to disbarment after admitting that he represented nine struggling homeowners in states in which he was not authorized to practice.

Brian Colombana, who practiced in Irvine and Ontario, Calif., accepted nearly $36,000 from 12 struggling homeowners but did not obtain a single loan modification, according to the State Bar of California.

Colombana was the fifth California lawyer who has agreed to disbarment amid the bar's investigation of loan modification scams. He was placed on involuntary inactive status on June 20. He was admitted to practice in California in 2005.

According to the state bar, two of Colombana's clients lost their homes to foreclosure, while another was forced to sell at a loss. A fourth cashed in insurance policies to avoid foreclosure. Colombana was affiliated with Loan Negotiators of America, the Housing Law Center and Mortgage Relief Law Center.

On Sept. 22, the state bar announced that Colombana had stipulated to committing nine acts of misconduct. In eight of the cases, the clients lived in states in which Colombana was not licensed to practice, including South Carolina, Utah, Nevada, Minnesota and Maryland.

Colombana, representing himself in the matter, said he believed that he could represent clients outside California under the American Bar Association's model rules about transactional matters in federal law. He said bar officials never clarified to him or other loan modification attorneys whether they were allowed to represent those clients.

"The whole thing was just a mess because it was so unclear from the very beginning," he said. "Had they said one time, 'Don't take anybody out of state,' no one would have done it. No one was trying to break the rules. It was unclear."

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