Business Booming for Lawyers Who Help Homeowners Facing Foreclosure

B. McLeod
Mar 9, 2009 5:26 PM CST

Also in desperate need of legal services are those who have already been divested of their homes, such that their needs are now both in tents, and of growing in tent cities.  (A/k/a, “Bushvilles”).

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T. Doucet
Mar 13, 2009 7:34 AM CST

It’s nice to see more attorneys are practicing in this area because there are great opportunities to help people, while not (always) working for free.

The last line mentions the Truth in Lending Act (TILA).  This powerful law offers homeowners who refinanced within the last 3 years (3 year SoL) the ability to rescind their transaction if technical errors are present.  Rescission enables the homeowner to recoup at least all interest paid on the mortgage plus most closing costs, which can amount to tens of thousands of dollars.  Attorney’s fees can also be statutorily available.

As someone who wrote a book on foreclosure defense (23 Legal Defenses to Foreclosure), and regularly audits loans for attorneys (I am a former mortgage firm owner and 2L), the amount of damages I see in some loans can be astounding.  Recently, I completed an audit that triggered about $120,000 in rescission value for the borrower ($650,000 mortgage), plus statutory attorneys fees.  About 50%+ of the refinance transactions I audit have errors enabling statutory rescission – errors that could have easily been avoided at closing.

If you are thinking about getting into foreclosure defense, but are not sure how to make a living in it, take a look at resources on TILA.  There are certainly homeowners who could use your help.

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B. McLeod
Mar 13, 2009 7:44 AM CST

“No issue with banks paying their bills”?  Must be on a distant planet.

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Sid Goldstein
Mar 13, 2009 8:21 AM CST

Of any possible interest?

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Diana Tsudik
Mar 13, 2009 8:57 AM CST

I’ve been approached by foreclosure companies looking to connect with an attorney. But I am wary of joining such companies because they’re so frequently shut down. I would, however, love to do this on my own, but have little foreclosure experience. What are the best resources I can references to learn?

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JME
Mar 13, 2009 10:03 AM CST

Also, accept a case.  I have two foreclosure cases going now, one is probably a lost cause because the family didn’t come to me until after the Sheriff’s Sale, but there are holes in the case, so I am going to fight anyway.  Surprising how much you will learn by digging into a case.

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Gordon
Mar 13, 2009 11:57 AM CST

I have heard of a foreclosure delay tactic being used in some parts of the country that, after a bit of research, it reminds me of how important in law (and finance) to always go back to the basics. It’s a legal delay tactic to use when a homeowner is in foreclosure. File a motion demanding the lender to produce the original note as proof the lender has a right to foreclose. When I say back to basics, the history of the mortgage industry is that most banks never sold the loans or packed loans together to be sold as investments like today. So the “current lender” who is receives the monthly mortgage payment and now foreclosing either owns a package of loans or acquired the loan as it was sold. Remember 1L property law the saying “nemo dat que non habit”? It meant one cannot give an interest in property that one does not have. In contrast, one cannot take an interest in property that one does not have a right to take.
So the tactic of demanding the current lender present the note forces the lender to trace the loan back to the original lender and obtain the note giving the current lender to right to payment of that note. This process takes time but the homeowner is entitled to it or otherwise anyone could claim a right to foreclose on a home. With so many lenders foreclosing, some don’t have time to track down the original note so foreclosure is delayed because they go after the easy ones first. Eventually the document can be produced so its no assurance the homeowner won’t get the boot. But it gives them time to maybe get current or find some alternatives for refinancing. But also, it is in the judge’s discretion to grant the homeowner’s motion.

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B. McLeod
Mar 13, 2009 5:42 PM CST

Gordon, it can be much better than a delay.  Some of the servicers trying to foreclose on behalf of mortgage pools have been unable to find the damned things AT ALL, despite being given time by the court to come up with them.  You are right, it comes of nobody really thinking through how the underlying mortgages would be enforced when they set up these securitizations.

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Marion L. Bell
Mar 13, 2009 11:38 PM CST

How do I find a good lawyer that I can trust?  I have been trying to modify my loan since OCt. But because it ia not my primary home, my lender will not budge.  My lesser has been laid off.  He’s moving out.  I have paid 9 mos. on this loan before it was rented, that is , so far.  If I could just lower it, it will be easier to rent, but so far no help from my lender.  I am not interested in a short sell because we have put too much in the house.  Several firms called me, but because of the numerous scamers, I don’t know where to turn.  I can’t trust anyone.

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Atiya
Mar 16, 2009 11:32 AM CST

For those who are interested in gaining experience in foreclosure defense, I suggest contacting your local Legal Aid office.  I know that we have offered free training.  You take a case or two pro bono; we provide malpractice insurance for our cases, and you gain valuable experience.

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