Matt Padilla… Again? Matt, Matt, Matt…

Matt Padilla of the Orange County Register has done it yet again… reported a story about loan modifications without having the foggiest idea what’s actually going on. I don’t know about everyone else, but it’s getting annoying, as far as I’m concerned.

It’s not that I expect Matt to get everything right… I don’t. It’s just that I expect him to get it right once in a while, and when it comes to the topic of getting your loan modified, well… he hits like a girl.

Here’s my response to Matt’s article that reported Sean Rutledge receiving a disciplinary action from the California State Bar Association in conjunction with loan modification services.

Why is it so difficult for you to look into anything? I interviewed Sean Rutledge last night. Here’s how you framed the complaint in your story:

“The notice accuses Rutledge of taking $1,750 from a homeowner in November 2008 but never making an effort to get his loan modified. After the client requested a refund, it took months to get his money back and the client had to first sign a document releasing Rutledge of all legal liabilities, according to the filing.”

Here are the facts of the matters:

1. The client in question called United in early December and retained the firm during the second week by authorizing an electronic check for $1750. His authorization was voice recorded.

2. That client called his bank and stopped payment on the check the following day.

3. The next day the client called United and apologized for stopping payment on the electronic check, stating that he did so because he became nervous about giving out his banking information. He stated that he wanted to retain the firm as agreed, but wanted pay the retainer using a cashier’s check.

4. United received the cashier’s check a couple of days before the Christmas holiday and it was deposited the day after Christmas. The bank held the check until it cleared the clearing house, as a result of the client having stopped payment on the previous payment. It cleared United’s account just before New Year’s.

5. On January 3rd, the client called United stating that he wanted his money back, as he had changed his mind once again. United asked that he send in the request in writing and they received that written request a few days later.

6. United then contacted the client and let him know that they were sending him a release of liability for him to sign before he could be issued a refund.

7. The release in question was a standard release of liability, downloaded from the Bar Association’s Website. It states that United would no longer be representing the client in question and would be released from any liability for acts that occurred after the date on which the form was signed.

8. Roughly a week later, the client called United and spoke with Sean Rutledge. He told Sean that he was going to complain to the State Bar Association because his electronic check had been deposited twice, after he had stopped payment the day after he wrote it. Sean explained that that was not due to anything United did. It was the normal practice of the clearing house to attempt to collect funds from an authorized electronic check twice.

9. The client started calling the law firm asking to speak with an attorney and asking questions about his home and the foreclosure process. United attorneys answered his questions.

10. The client called for Sean Rutledge on several occasions over a two week period of time, and was unable to reach Mr. Rutledge. Sean is the managing partner of United Law, a firm with offices in Irvine, on Wall St. in New York, and in Ft. Lauderdale, Florida, and as a result, Sean spends a great deal of time traveling.

11. In early February, Sean’s assistant came running into his office saying that the paramedics were on the phone and that his mother had been in a car accident. When he picked up the phone it was the client in question who had used the ruse to talk to Sean.

12. Sean informed the client that he was not to call his firm and lie about the nature of the call. He also told the client that United still had not received the signed released and that he would send another one, as he wanted it signed and returned so the firm could send the refund immediately.

13. It was 65 days after United first sent the client the release of liability, a standard form, and the client received the refund in the amount of $1750… 72 hours after United received the signed release.

14. When the California Bar Association began investigating the complaint made by the client, the client had received his full refund two months earlier.

And again, here’s how you, Matt Padilla, characterized the Bar’s filing of a disciplinary action against Sean Rutledge of United Law Group, Irvine.

“The notice accuses Rutledge of taking $1,750 from a homeowner in November 2008 but never making an effort to get his loan modified. After the client requested a refund, it took months to get his money back and the client had to first sign a document releasing Rutledge of all legal liabilities, according to the filing.”

I can tell you that Mr. Rutledge is deeply offended by the actions and statements of the California Bar Association. And in my opinion, you as a journalist, and one that refers to himself as “The Mortgage Insider,” are clearly anything but.

It took me 45 minutes to investigate the details of the disciplinary action involving Sean Rutledge. I suppose you are too busy to be bothered with the facts.

Signed… your friend and admirer…

The Rambling Attack Monger

Wordpress Responses to “Matt Padilla… Again? Matt, Matt, Matt…”

  1. Thanks for saying that, rdulecki… I really appreciate it. Did you by any chance get a chance to read my cover story in the July issue of The Niche Report on HVCC? You can find it at, scroll down on the left and click on the July cover. Check out the illustration on the cover, which was drawn by my partner, Richard Taylor, and the story starts on page 16. It’s about the new HVCC rules governing appraisals, and the only thing I know less about than mortgages, are appraisals, so I was just wondering what others thought of the article. Glad to have you reading Mandelman Matters, and I hope you’ll spread the word.

    I also write a monthly column in The Niche Report on the very last page of the magazine, called Bringing Up the Rear. Each month I bring up a new rear… this month the rear in question is Sheila Bair of the FDIC.

  2. Well, I understand what you’re saying, but in this case I’m not so sure it’s what it appears to be. For example, this client was not a client of Sean Rutledge’s, he was a client of the firm and was calling the firm’s managing partner. The firm has a record of how many times he called to ask questions of his attorney and was provided with answers. He first called Mr. Rutlledge to complain that the electronic check that he authorized had been sent through twice and Sean explained that had nothing to do with United Law, it was simply the standard practice of the clearing house when processing an electronic check. It never cleared, as he called the day after he authorized it to stop payment, but the clearing house sent it through again. He told Mr. Rutledge that he was going to complain to the Bar Association and Mr. Rutledge said that it was his right to do so, but that the firm had not sent anything through twice and has no control over the clearing house that processes electronic checks. Then the client called Mr. Rutledge maybe a dozen times over a two week period while Sean was traveling, and each time was offered another partner and refused. Then he pulled the paramedic stunt, which is against the law, by the way, as is lying about authorizing an electronic check. This client was only a client of the firm for a week, between the end of December and January 3rd.

    Look… I’m not saying that I don’t understand people being freaked out about hiring a firm to help them with a loan modification… with the confusion caused by the government and the scams that are out there, it’s a mess. I’m just saying that this particular case seems incredibly weak. It makes no sense that a firm the size of United, a firm that offers so many other areas of law, that they would accept a retainer of $1750 and then do nothing or not refund it. There are real problem companies out there… does this instance really rise to the level of being a problem? The man received his refund 72 hours after signing the standard release of liability that all firms require when a client no longer wants to be represented. And when the Bar started to investigate, the man had received his money two months before.

    I know you think I attacked Matt unfairly, and perhaps you think that I defend loan modification firms in all cases, but it’s not true. First of all, I’ve actually helped to get scam firms closed down. I’ve helped at least a dozen people get their money back, and I’d be happy to help put anyone away that ripped off a homeowner. I just don’t think that the government has done anyone a service by saying that they’re all scams, when they clearly aren’t. I don’t think telling people that they can handle things themselves, when they clearly cannot in many cases. And I think Matt, as the Orange County Register mortgage expert, should be a voice that helps people find their way through that maze… and he hasn’t.

    So, just like you find it acceptable that the United client used the paramedic ruse to get Mr. Rutledge on the phone, I went after Matt to get a reaction. He’s ignored so many calls from ML-Implode I couldn’t possibly count. After my response to his column, he got in touch with Aaron and Randall right away… to say that he didn’t like me attacking him.

    And for the record… I don’t claim to be balanced… I am an editorialist that is pro homeowner every time.

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