Crooked Lawyers Ruin it for the Rest

The New York Times reports that in California it is now virtually impossible to find legal help fighting a foreclosure. That is because the state recently passed laws making it illegal for attorneys to accept up front payment for help in those kinds of cases.

It is not unprecedented for lawyers to work under those conditions. Personal injury and medical malpractice lawyers do not get paid until settlement. The difference, according to the article, is that people in foreclosure often wind up in bankruptcy as well. This mean that a lawyer waiting until the end of a case for payment may never get paid.

California lawmakers did not spin the rules out thin air. Foreclosure help fraud has become a favorite scam for those wishing to make a quick buck. The scammer offers to help the homeowner for an up front fee.  The homeowner pays the fee and never receives any help.  Outlawing up front payment makes it much harder to run a scam like this without attracting the attention of the authorities. Unfortunately the law also makes it an extremely risky proposition to take on a foreclosure case. Payday could be years away, if it ever comes at all.

Clearly part of the problem is that the legislation was ineptly written but the deeper problem is that the legislation was needed in the first place. There has been a lot of talk recently about the need for regulation in every sphere of public life. Some say the regulation is too much, that it stifles the free market on which the American economy is based. But our culture of corruption necessitates such measures. If there is a moral to the story it is that the price of corruption is regulation.  Unfortunately that also means that good and services will be less convenient, more expensive, and  cases totally unavailable.