Mortgage Foreclosure Defense: Careful Who You Hire

While we are completing publication of our series of Handbooks for borrowers, lenders and lawyers, we are receiving many emails from people who are in the midst of complicated litigation or threat of litigation from their lenders. Just remember the 80-20 rule: 80% of the people out there who offer you help at any price (including free consumer advocate groups) can’t or won’t do a thing for you. Your objective is to stop the foeclosure, keep your house and get stabilized in your house situation and your overall finances. An agressive stance using existing laws and procedures is your ONLY hope and it DOES hold out considerable hope. Buried in the laws designed to “protect” borrowers from predatory practices are some REAL provisions with REAL TEETH.

The fact that someone has been through law school and has passed a bar exam does not qualify him or her to represent you . “Loss mitigators” are largely unregulated and 95% of them are scam artists just looking for a retainer. The same holds true unfotunately for attorneys, accountants and financial advisers offering these services.  We are compiling lists of people whom we are carefully qualifying as competent to provide assistance. Their resumes are being sent to 772-594-6244 (an eFAX number). At present, while still inthe first stages of formation the GTC Honor System has already established informal relationships with several attorneys in the major states affected, and apparently one competent loss mitigator who employs expert mortgage auditors who examine the mortgage application and closing documents to reveal violations of truth in lending (see our blog on this).

I am careful about the structure of this venture to assist beleagured borrowers. Each person — auditor, loss mitigator, attorney, expert witness, etc., receives compensation in conformance with the laws of each state and in most cases will be paid by the lender, if the borrorwer is successful in negotiating or litigating their way out of foreclosure.

The message is do not surrender, be careful who you hire, and be as aggressive as possible in putting lenders on the defensive. They already know that that what they need is a good loan rather than an empty house. A good loan will reverse the losses they have taken on their accounting statements. An excellent article on this can be found on the opinion page of www.nytimes.com by Howard F. Millstein, entitled “Give the Banks Some credit.” He seems to be the only one who gets it: there isn’t enough money in the world to cure this mortgage meltdown. The ONLY thing that can save our economy and our homemowners in particular is to agree on putting most of these bad loans back on the books as good loans. His solution is legislative. Ours recognizes what Obama calls the fierce urgency of NOW. Both are valid.

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