Foreclosure Defense: Contingency Fees

most vendors are looking for money up front that will make them rich while you go down the tubes

More and more “professionals” are coming out of the woodwork to “help” with your mortgage. Whether you are in default, foreclosure, in the midst of sale or eviction, or just sitting with a mortgage where the note is worth more than the house, there are plenty of remedies available for you to pursue and plenty of defenses to stop the foreclosures dead in their tracks. There are even methods by which you can modify your note downward, even without the congressional bill currently wandering through the halls of capital hill. 

The fact is that had you known your “lender” was just some middleman who didn’t care whether you could afford the mortgage or not, had you known that within 3-12 months your payments would be too high for you to qualify for the mortgage they were granting you at closing, had you known that the appraised value of your house and all the houses in your new neighborhood were artificially inflated (i.e. false and deceptive), well then you probably would have figured out this wasn’t such a good deal and that you could be in for a lot of heartbreak not too far down the road. 

All the people at closing — from the title agent through the lender — were only there for one purpose: to get your signature on those documents so the mortgage, the note and the servicing rights could be used to satisfy the commitments made on securities already sold in anticipation of your signature and the signature of millions of other people just like you. 


Very few lawyers really know anything about TILA from the consumer prospective. Some lawyers who have represented landers and others involved in the lending process, have familiarity with the procedures in TILA disclosures and statements but have a virtually no knowledge of the remedies for consumers and borrowers or how to pursue them. Yet lawyers are allowed to take your case even though they have no idea where to start. Accountants can do audits of your closing even they have no idea where to start.

And most vendors are looking for money up front that will make them rich while you go down the tubes. But it is actually fairly easy to tell who knows and who doesn’t. Ask them how many refund cases they have handled and ask them for personal and professional references and MAKE THE CALLS. 

The best source for a TILA audit is from people who are former auditors who worked for bank regulation agencies. I found one operation and I am starting to work closely with them. In fact, to be honest, I stopped looking for others after I got to know these people and I completed the due diligence. That is why I have a link for you to go to at If I run across others I will publish those too. If you know of others that fit the requirements, let me know and I will publish it here.

Some up-front money is all right if it is stated in hundreds rather than thousands. There are costs in performing the audit, getting the right documents from the lender and from you. Don’t forget, with all the sales of mortgages, notes and servicing rights, demands for the documents showing who is the real party in interest in your particular mortgage and note takes time and money. The lenders will almost always be reluctant to disclose that information but eventually they give in. 

If you deal with an organization that is (a) already registered as a collection agency (to collect on your behalf from the banks!) and (b) has a working alliance with lawyers who can put local boots on the ground in any state of the union, you are more likely to be in the hands of a true professional rather than a hit and run artist. 

The typical acceptable lawyer’s contingency fee is 33 1/3% if the matter stays out of litigation, 40% if the mater goes into litigation (including administrative proceedings) and 45% if the matter goes to appeal. The question of course is percentage of what? It is the value of the recovery you actually receive, whether it is an actual cash refund, payment of damages, reduction in your amount owed on your mortgage, etc. recovery of fees from the lender varies from zero to 100%. Usually the recovery of fees is applied first to a bonus for the collection agency and attorney and then the rest goes back to you. An even (50-50) distribution of the recovery of fees and costs is common although some are offering clients all of it, or 2/3 of it. 

One Response

  1. I found yur site and I love it. I love the apparent value of giving education and information to a group of people who really are ‘swamped and drowning’.

    My only concern is that the average Joe may clearly be in over his head and unable to integrate this process without counsel,without funds,and in many cases without faith.

    You have done a good deed-Keep it coming-make it even better. This is so rare in these times-you are an excellent example.


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