Homeowners across the nation have locked and loaded and are launching their mortgage wars. Sales of my new book, Mortgage Wars: How to Fight Fraud and Reverse Foreclosure are thriving among homeowners and attorneys alike. We have even taken over the airways, advertising the book on Monday night football! The book was requested for sale at the annual conference of the California Bar Association.
More attorneys are being trained up, and California attorney Walter Hackett is in the process of announcing an institute for lending practices to help attorneys gear up faster. Lenders are besieged with mortgage audits, qualified written requests and predatory lending complaints. As a result, many lenders are postponing foreclosure sales time and again, and some states, like Florida and Ohio have become virtually, no foreclosure zones.
The war games have begun and now it's time for the predatory lenders, brokers and foreclosure consultants to sweat. The Fed is weeding out the predators who promise loan mods and can't deliver after devouring huge fees. The tide is turning, as it must, if the largest lenders, like Chase, Citibank, Wells Fargo and the like, are to transform their predatory schemes against innocent homeowners.
There has been so much progress since my book has hit bookshelves. Just ask forensic expert Marie McDonnell, who is offering a full securitization analysis for $1,500 dollars. She maps every transaction in the securitization daisy chain and prepares an expert report to demonstrate to the judge how the lender has no legal standing to foreclose. She is also available as an expert witness at trial.
Or ask California attorney, Walter Hackett, who challenges the sanctity of a deed of trust when there has been no trust in the mortgage transaction. Or California attorney, Jeff Schwartz, who incorporates a lack of fiduciary duty claim into some of his well deserving complaints.
Or ask Ohio attorney Dan McGookey, who just reversed a foreclosure action due to the lender not owning the loan and note. His pleadings are becoming legendary. Rock on, Dan!
I receive daily calls from homeowners confused about the mortgage war plan of attack, and many have been incredibly misinformed. Some have committed bankruptcy fraud and didn't know it, making themselves vulnerable to criminal charges. So here is the skinny on what to do and not do in your own mortgage war.
The Dos:
1. Get a mortgage audit. For only $499.00, you can go to www.yourmortgagewar.com and order one. Our evidentiary audit has been designed by attorneys. It examines TILA and RESPA violations, fraud and illegal securitization. You will receive your report after two week upon collecting all the documents.
2. Second, if your audit warrants it, you can file a legal complaint. We can help you find a qualified attorney from our network, or from their networks. The good ones are always in contact with each other.
3. Your new best friend attorney will take the audit data and interview you at length. Based upon your responses, your attorney will prepare a legal complaint detailing the facts of your case and appropriate causes of action. You should not pay more than $2,500 for this service, including court filing fees. On that note, you should not pay more than $275 per hour for legal assistance, as that is the going national rate.
4. Your attorney will determine whether to file your complaint in state or federal court. TILA violations are heard in federal court, as are RESPA claims. However, many attorneys I chat with believe that predatory complaints involving other causes of action, such as fraud and lack of fiduciary duty, are best heard in state court. Your attorney can educate you on what's best for you in your state.
5. Your attorney will also determine whether to demand a jury trial. The attorneys I know are split on this one: some believe a jury would side with a fellow homeowner. However, some cities may have jurors who cannot follow the proceedings, particularly with regard to technicalities in the securitization process. Your attorney will determine which choice is right for you.
6. Once your complaint is filed and served, your attorney can begin discovery after only a few days. Discovery takes the form of written demands for information from your lender, including who owns your loan and note. If your lender refused to answer, it can be compelled to do so by the court. Your attorney will also depose representatives from your lender or brokerage, and other parties with knowledge. Not a bad idea to search for whistle blowers who worked for your lender in sunnier times.
7. You will also get a trial date at a hearing known as a case management conference. Your trial date most likely will be scheduled many months in the future.
8. Your attorney can also begin settlement discussions with your lender. These take the form of a reduction in interest rate and principal balance. Just ask Florida attorney, Dawn Rapoport how lenders are responding, now that the number of plaintiffs is dramatically increasing.
9. Your judge, by the way, may very likely order you to meet with a negotiator or mediator to settle your case. Most judges do not want their courtroom crowded by enraged homeowners engaging in mortgage war. This is also a time to get a better deal from your lender in exchange for dropping your lawsuit. In my opinion, this is the only way to get a decent loan modification.
10. If you live in a non-judicial state, and your lender attempts to foreclose before your trial, your attorney will have to obtain a TRO, or temporary restraining order from the judge. The judge will have to be convinced that you will be irreparably harmed by the foreclosure, and that you stand a good chance to win at trial. This is a very good time to have Marie McDonnell prepare a report for the judge regarding who owns your loan and note. You may find you already own your home free and clear and don't know it yet.
11. After obtaining the TRO, you will have to go back to court to obtain an injunction to stay the foreclosure pending outcome of your trial. The judge may demand that you post a bond to stop the bleeding for your lender. There is a new cottage industry sprouting in the bond business, and many companies are providing bonds using real estate as collateral. However, you cannot use the subject property as collateral.
12. You may receive several settlement offers pre-trial. Let your attorney determine which one is best for you. Or you may just roll the dice and take your war to the courtroom.
13. If you decide to go to court, your attorney may demand a portion of your settlement in exchange for litigating your case. This arrangement, called a contingency agreement, allows you to defer your considerable legal costs until the end of the trial. If you get nothin', your attorney gets nothin' as well.
14. If you don't like the outcome of your trial and there were process errors, you may decide to appeal. This may also require the posting of a bond.
15. Or you may prevail, and win your mortgage war. It's happening more and more every day.
Here is my list of Don'ts when waging your mortgage war:
1. Don't go pro per. There is nothing wrong with having an attorney write, file and serve a pro per complaint. This may save you money on the front end. After the complaint is served, your defendants, which should include all parties you have a beef with, such as your appraiser, broker, lender, title agent, servicer, trustee and beneficiary, have thirty days to respond. They generally respond with a "demur" which is an attack on your complaint.
2. Don't go to court by yourself. You will need an attorney to oppose the demur in writing and at a hearing. Don't' play Perry Mason and think you can waltz into court and get the result that you want. Judges do not like pro per litigants, as they are ill-trained in courtroom procedure and etiquette. You may score a sympathetic judge, but sooner or later the lender's attorneys will eat your alive. Don't have a fool for a client, or go into battle without a loaded weapon.
3. Don't believe that bankruptcy is the answer to your mortgage hell. Lender's attorneys will request a lift of stay in a New York minute. They often get it, and you lose your home. File a predatory claim first. You can always succumb to filing bankruptcy. So don't believe predatory attorneys who tell you that your only hope is to file bankruptcy without interviewing skilled predatory lending litigators.
4. Don't play any tricks with having others take a piece of your home and then they declare bankruptcy. Whoever invented this illegal practice, ain't doing homeowners a world of good. Especially when those homeowners are facing bankruptcy themselves and have already defrauded the court.
5. Don't put your home in the hands of loan mod companies. I get calls every day from foreclosed homeowners who were told their loans were being modified and there was nothing to worry about. If this has happened to you, sue the loan mod company, or file a malpractice complaint against your loan modification attorney. The only thing that will stop your foreclosure is a signed settlement from your lender or an order signed by a judge. If you are one of the few that has gotten a loan modification on your own, make sure it is good for you. If not, sue the bastards.
6. Don't deny your mortgage hell. If you are in delinquency or default, it is time to get moving. God helps those who get help themselves. I get many calls from homeowners whose foreclosure sale is imminent, and there isn't much that can be done. Preparing and filing a legal complaint is required before you can seek a temporary restraining order. All this takes time. Good attorneys are swamped with clients. Plan in advance to save your home.
7. Don't attempt a loan modification on your own. Attorneys tell me war stories that set my hair on file. How the banksters use every trick in the book to trap the homeowner into an unaffordable profile. This gives the lender even more ammunition to foreclose, especially because it has "cooperated" with the Obama plan.
8. Don't drive your auditor and attorney crazy with all hours phone calls. Yes, you have every right to panic, and the threat of losing the roof over your head is a terrifying possibility. But you must control your anxiety so that your helpers can do their jobs. Constant demands for reassurance and advice only makes them want to avoid contact with you.
9. Don't prematurely give up and turn in keys for cash. If you have been told by a reputable attorney that you have a strong case, persevere and fight on. The bank is not your mother or father. If your lender has violated laws, there are legal remedies at your disposal. But only if you use them.
10. Don't rush or second guess the process. Every case is different, depending on a unique set of facts. Even attorneys disagree on various approaches to a complaint. It takes time and effort to research the law and what causes of action and motions are working. Mortgage war is a marathon, not a sprint.
11. Don't get discouraged. You will have good days and bad days. It helps to meditate instead of awfulize. You will sleep better at night when you are sure you are following the best plan of attack for saving your home and waging war against your predatory lender and broker.
I hope this helps answer some of your questions. I do try to call everyone who contacts me through our website www.yourmortgagewar.com. I am truly blessed to have chatted with so many smart, and justifiably, enraged homeowners in the throes of their mortgage wars. If you have a reaction to the book or have a question, feel free to e mail me.
And give yourselves kudos for pioneering this war. It is only when the courts are overwhelmed with predatory lending lawsuits that the state and federal government may follow the steps of Ohio and force arrogant predatory lenders to prove that they have standing before filing a foreclosure action.
So, in the spirit of celebrity chef Bobby Flay, Ohio, keep doing what you're doin'. And the rest of America? Ask yourself this: Are you ready for a mortgage throw down?
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I agree and if you take this advice and choose to have someone represent you, I would suggest avoiding paying hefty fees up front before any work has been completed. Advance fee charges are getting a lot of attention and FTC chairman Jon Leibowitz even said 'very often, if they’re asking for advance fees, … it’s a red flag that the service is bogus.'
I'm not saying all companies that charge advance fees are bogus because that's not true, but what would you rather do, pay money up front and hope you chose the right guy or wait until you have tangible evidence of progress in your hands before you pay anything?
I'd choose the latter.
The home loan modification law group I work for follows a "No Advance Fees" model that I think is much more fair to the home owner as their risk is lowered.
No Advance Fees: http://www.amlgloanmodification.com
Check with former clients or Google ' Marie McDonnell Audit '
That's not the way that it works in Illinois. And that may or may not be the way that it works in all other states.
Years ago, the Illinois courts changed the law applicable to Illinois contingency-fee agreements by providing that such an agreement will not protect a client against liability to the client's attorney based upon a per-hour rate charge if certain conditions exist. This is namely a refusal by the client to continue the attorney-client relationship and follow the attorney's directions.
Attorneys who discover that they cannot prevail against a defendant in a contingency-fee agreement, as well as attorneys who take on clients without ever having an intention to take cases against defendants to trial, can create such conditions. It's not difficult. As one example, under contingency-fee agreements which require clients to pay for all costs other than the attorney's fee, an attorney can run up costs by taking unnecessary depositions or threatening to do so. As another example, an attorney can turn against a client by claiming that the client is lying. There are a great many other things that can also be done by any knowledgeable practitioner.
If your stuck in a McMansion that's worth 50 grand less than you paid for it by all means follow this advice, but learn your lesson and live within your means.
Great article, great advice.
I recently had a conersation with Bank of America about my mortgage. They kept saying something like "your grantor", or "sponsor" or something like that, is participated in the loan mod program. I had to ask 3 times but they finally admitted that they didn't own my loan,...... Fannie May does. This was news to me!
There are exceptions to the anti-deficiency rules.
In addition, there are tax issues that may need to be considered.
Sometimes filing for bankruptcy is a better solution.
There are "unscrupulous lawyers." Some may even work for lenders.
It is clear however, that no one, not Iris Martin nor anyone else, has advised that poor homeowners should "turn to unscrupulous lawyers for help."
Her own words show that she hasn't provided such advice.
It looks like she is offering more help than most. Good for her.