Housing Policy

"I Wish the Law Had Worked": A Dispatch from the Land of Unintended Consequences


in the red

Once upon a time, people seeking loan modifications got screwed by lawyers who promised to save their homes, took a few thousand dollars, and disappeared from the face of the Earth. Then the light of regulation shone upon California and a task force was convened, legislation was devised, and everyone smiled when it passed by an overwhelming 36-4 in September 2009.

Now, this:

Lawyers throughout California say they have no choice but to reject clients [seeking help with mortgage modifications] because of a new state law that sharply restricts how they can be paid. Under the measure, passed overwhelmingly by the State Legislature and backed by the state bar association, lawyers who work on loan modifications cannot receive any money until the work is complete. The bar association says that under the law, clients cannot put retainers in trust accounts….

Foreclosure specialists say there has been an unintended consequence: the honest lawyers can no longer afford to assist.. others who feel helpless before lenders that they see as elusive, unyielding and skilled at losing paperwork.

Everyone had good intentions. Smart people spend a lot of hours trying to solve the problem. Lenders signed on to the new rules. The result: swindlers continue the same unscrupulous practices and honest lawyers have bowed out.

Suzan Anderson, supervising trial counsel of the California bar's special team on loan modification, sums it up nicely.

"I wish the law had worked," Ms. Anderson said.


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  1. If the law doesn’t produce the intended consequences, the government needs to elect a new people.

  2. “I wish the law had worked,” Ms. Anderson said.

    But since there is no penalty to you for writing a shitty law, you won’t think it through any further next time either.

    1. Wish in one hand, shitty in the other….

  3. “The law is an ass.” – Charles Dickens

  4. And, Ms. Anderson, I wish you and your cronies at the state bar weren’t such fucking idiots that you actually thought that placing burdens and barriers on the provision of a service would cause more of that service to be provided.

  5. While channel surfing yesterday, I saw some graphic about whether Tea Party candidates can say anything other than “no.” That pissed me off, because the government should be saying no, no, and no again to just about everything. Unless the question is, “Should we gut the government some more?” Then the answer should be “yes.”

    Obstructing the federal government is usually a virtue, not a vice.

  6. Well, apparently the sponsor of the law thinks it worked:

    The law is working well, Senator Calderon (D) said. “You do not need a lawyer,” he said.

    See, he knows better than you what you want and need.

  7. “the honest lawyers can no longer afford to assist…”

    Wait. First off, how is this any different from the status quo ante, and second, why in hell would I hire an honest lawyer?!? I can tell the truth without any help.

  8. Ms. Anderson. . .you disappoint me.

  9. What we need is a commission…..a group of REALLY smart lawyers to come up with a regulation to fix this problem. (Says the status quo bunch).

    Or, get rid of this and a whole shitpot of other regulations and LET PEOPLE DO WHAT’S RIGHT FOR THEM.

    Damn….stupid fucking legislators, congress, politicians and lawyers (yes, I realize this last one is redundant).

    1. or we could kill all the lawyers…

      1. Yes…because, deep down…about 6 feet down, lawyers are nice folks. =D

  10. Please tell us more about this concept you call “unintended consequences”. It sounds very futuristic, and obviously fictional.

  11. Well, first off, calling this result an unintended consequence violates the Iron Law:

    Foreseeable consequences are not unintended.

    As noted above, it is foreseeable, nay, inevitable, that placing burdens and barriers on the provision of a service will cause less of that service to be provided.

    1. As noted above, it is foreseeable, nay, inevitable, that placing burdens and barriers on the provision of a service will cause less of that service to be provided.

      While I don’t argue the truth of this point, is this what is happening? Why would a monopolistic entity NOT claim “we can’t afford to do it for that amount”? If the law is so complex that you must hire a lawyer, of course they will claim it must cost a fortune. Having to hire someone who has a law degree (at minimum) isn’t exactly free from burdens and barriers. Is there any evidence that this is really only dis-interested public concern?

      The only “sources” in this article are attorneys and foreclosure experts. If you had asked Ma Bell why long distance was so outrageously expensive before the breakup I am sure they would have claimed that it couldn’t be done for less.

  12. “I wish the law had worked that we weren’t ruled by a collection of idiots and otherwise sub-optimal evolutionary rejects,” Ms. Anderson said.


  13. “I wish the law had worked,” Ms. Anderson said.

    I think regulators and legislators should be required to perform seppuku when a law/regulation fails, instead of render some half-assed qualification or apology.

    1. That would make such an excellent sci-fi (fantasy?) short story!

  14. From the article:
    Ron Calderon, a state senator who represents several communities east of Los Angeles, sponsored a bill that prohibits advance payments for modifications and required lawyers to warn clients that they could do the job themselves without professional assistance. Lenders were supportive of the bill, Senator Calderon said.

    I really wish we would stop believing that the “chosen” are sooooo pure of heart. Really, in every case our benevolent legislatures are seemingly shocked and surprised about the ill effects of their efforts.

    Why wouldn’t the Lenders approve of a measure to hamstring their opponents’ potential counsel? Yes, of course, they care. Calderon may be that obtuse, but I am not willing to rule out something more devious.

    As to the bar association support, the lawyers that run bar associations crap themselves at the mere mention of a problem – advocating more rules to protect the “profession”. Many of them never practiced in a courtroom other than their first big case in moot court defending Harry potter from a charge of theft of a wizard’s quiditch stick.

  15. Don’t tell Jon Chait!

  16. “I wish the law had worked,” Ms. Anderson said.

    She should’ve wished harder!

  17. “I wish the law had worked,” Ms. Anderson said.

    Which doesn’t mean we’re going to repeal it of course. The lawr is the lawr after all.

  18. “I wish the law had worked,”
    This should be repeated, loudly, before *every* meeting of *every* governmental body.
    Maybe some of the less dense among them would stop legislating and regulating for unicorns.

    1. Yes, but if we are going to have a recitation before every meeting, my first choice would be “We are out of money!!” Maybe with a little “Gabba gabba gabba” thrown in.

  19. There is no problem, big or small, that cannot be compounded by the purported solution proposed and imposed by well-intentioned people.

    Collorary to Old Mexican’s law of public policy, which states that: the problems stemming from a solution purported to solve a previous problem, created by a previous solution, increase geometrically, and the problems generated from the new solutions will also increase geometrically.

    And so on, and so on.

      1. Wouldn’t ^e be more appropriate than +1?

    1. And hilarity ensues.

  20. ‘If I only had a brain…”

  21. Alcohol is the cheapest drug in B.C., says a report released Thursday by the Centre for Addictions Research, which recommends a hike in liquor prices to reduce illness and injuries.CTV reports that according to the research, raising booze prices by up to 150% “could have a major impact on everything from hospital visits and traffic accidents, to venereal disease.”

    So far, so good. But “there’s a concern” that if prices go up, “those who can’t afford it” will “go to the less expensive, and far more damaging, rubbing alcohol, antifreeze and mouthwash to drink.”

    The proposed solution: “a controlled access program that gives free alcohol to homeless alcoholics.” A socialized open bar! Those who drink responsibly pay more to bail out the real drunks.

    At least the Obama administration hasn’t caught up with this idea yet. If it does, the Long Island Iced Tea Party will have something to say about it.


    1. As a booze snob, I figure that most people already HAVE turned to rubbing alcohol, antifreeze and mouthwash.

  22. Flailing is the new legislation.

  23. Well, Suzan, why don’t you shit in one hand and wish in the other and let me know which hand fills up first?

  24. What are the “unintended consequences” of this law? It was drafted by the mortgage banking lobby to handicap consumers, and it’s worked just as it was designed.

  25. Honest lawyer? Pfft! If you want to get a “not guilty” verdict, truly innocent or not, you should hire the sleaziest, crookedist lawyer you can. You think the prosecution cares about law and rules? They are just as sleazy and crooked!

    Anyway, this is the problem with laws. Instead of going AFTER people who are crooked, they make laws restricting everyone, crooked or not. But the crooks still find ways around it. Instead of making laws that specifically target crooks and vigorously prosecuting them, we just tell everyone to bend over and take it! Ridiculous, but that is how the government operates!

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