Attorney leaves clients facing foreclosure stranded

December 14, 2009 7:27:52 PM PST
Thousands of distressed homeowners are looking for a way to get their money back after hiring a lawyer to save their homes.

The families were left in a lurch when the lawyer suddenly resigned from the State Bar. But even before his resignation, investigators were raising questions about whether the attorney was doing more harm than good.

James Parsa advertised heavily on both television and radio up and down the state.

James Anderson signed a contract with Parsa and paid $3,500 up front to get a loan modification.

"What I got for my money was a big headache," said Anderson.

Jeanine Barajas paid an advance fee of $5,000 for the same thing.

"I wouldn't do it again if that's what you mean," she said.

The California State Bar told 7 On Your Side Parsa was one of 300 lawyers under investigation.

"Mr. Parsa was being investigated for his loan modification activities by the State Bar based on complaints we have received from clients. And as part of our investigation we learned that Mr. Parsa had a criminal conviction in 2001," said Suzan Anderson from the California State Bar.

Prosecutors convicted him of two counts of unlawful intercourse with a minor in Orange County.

"The courts are supposed to report any criminal conviction to the State Bar and the attorney is supposed to report the conviction. Apparently it slipped through the system," said Anderson.

When the Bar learned of his conviction, it put him on interim suspension and Parsa resigned one week later. Now the State Bar is encouraging Parsa's 4,500 clients to apply for its restitution fund.

"We can reimburse for an attorney actually stealing personal injury settlement funds or even taking advance fees for performing no work or any significant amount of work," said Matthew Zawol from the California State Bar.

Last year, the Bar received 1,000 requests for restitution. This year that number has already topped 2,000.

Many clients claim the lawyers leave them in worse shape than before they came to them.

"When you look back at it, you feel really stupid that you even listened to them, because you ended up in really in a bigger mess," said Barajas.

"We really, really thought that this was going to help us relieve our debt on this house here. We didn't really get anything," said Anderson.

7 On Your Side was unsuccessful in reaching Parsa for comment.

Anderson was able to successfully dispute the charge on his credit card bill. Others should apply for restitution.


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