Two Bay Area attorneys face disbarment on charges they ran a home foreclosure rescue scam during the mortgage crisis that charged more than $90,000 in fees but ultimately made things worse for their customers, a State Bar judge said Monday.
Stevan Henrioulle, 68, of Oakland and Ronald Uy, 52, of Pacifica were found culpable on 27 counts of misconduct Oct. 28 in nine cases, including two in Contra Costa County, and should be stripped of their law licenses, State Bar Court Judge Patrice E. McElroy ruled.
The ruling means the men are suspended from practicing law, and if they don't appeal within 30 days, their licenses will be revoked. Uy's attorney didn't immediately respond to requests for comment.
Henrioulle said he plans to appeal judge's ruling because it contains numerous errors, but declined to elaborate. He was, however, willing to put some of the responsibility for the problems on the alleged victims.
"Some people had some unrealistic expectations about the litigation process," he said. "In some instances they wanted a more immediate positive result than was potentially available."
McElroy's ruling says the men, from July 2008 to October 2011, represented 200 homeowners who wanted to push lenders into setting better terms for their loans. They were among thousands of state homeowners who sought to renegotiate unaffordable loans during the Great Recession. Over 230,000 homes were lost to foreclosure in California in 2008 alone.
The homeowners agreed to pay them $3,995 to $4,500 in fees up front, and from then on they were to pay $500 to $850 monthly as long as their case was going on. Henrioulle and Uy claimed they would sue the banks, stopping foreclosure and winning the clients title to their homes "free and clear," McElroy's ruling says.
Instead, the clients in some cases were advised to stop paying their mortgage but told to keep making their payments to the lawyers. Of the nine cases cited by the Bar, only the homeowners who personally negotiated with the banks were able to save their homes, the ruling says.
McElroy's ruling lists a series of unperformed legal tasks or broken promises that led to the charges. A Sacramento woman learned after her home was foreclosed and auctioned off, that the lawsuit she'd paid for against the bank was never filed.
A Concord man was told to stop paying his mortgage and rent the house out to an elderly woman. A co-conspirator of the lawyers, Tarik Sami Soudani, explained an elderly renter gave the lawyers the ability to stop any bank foreclosure, McElroy wrote.
A Pinole woman was also told to stop paying her mortgage and paid the lawyers about $6,200 to file a suit against her lender. She hired the lawyers in January 2011, but by September 2011, they still had not filed a suit seeking better loan terms for her. After she confronted Henrioulle about the lapse, he told her she didn't qualify for a loan modification, according to the judge's ruling.
If the lawyers decide to appeal the ruling against them, the case could drag on for months. They have 30 days to appeal to the State Bar Court Review Department, and if they don't agree with its findings, they could ask the state Supreme Court, the final arbiter, to review the case.
Contact Joshua Melvin at 650-348-4335. Follow him at Twitter.com/melvinreport.