FORECLOSURE DEFENSE: BEWARE OF PEOPLE OFFERING HELP


AUDITS, REPORTS AND DEMANDS DO NOT STOP NOTICES OF SALE, FORECLOSURES, JUDGMENTS, SALES OR EVICTIONS. ONLY AN ORDER ENTERED BY A JUDGE OF COMPETENT JURISDICTION CAN HAVE THAT EFFECT.

Our objective is to get to as many people as possible who were or are effected by the mortgage meltdown practices between 2001-2008. We are allowing and promoting as much free information as possible and providing active assistance mostly to other lawyers who already have clients. It is our goal to get to as many people as possible whether or not they have money to pay fees to outside consultants or attorneys.

There are some cases that we are referring to local attorneys and we are assisting them in learning the strategies for foreclosure defense. Most people who contact us or our readers are not an attorney but that many have some knowledge regarding certain rights of the borrower and that they feel qualified to perform mortgage audits or they are outsourcing your mortgage audit function to a third party or parties.

AUDITS, REPORTS AND DEMANDS DO NOT STOP NOTICES OF SALE, FORECLOSURES, JUDGMENTS, SALES OR EVICTIONS. ONLY AN ORDER ENTERED BY A JUDGE OF COMPETENT JURISDICTION CAN HAVE THAT EFFECT.

It is extremely important that to realize that there are now 26 states wherein the attorney general or the equivalent is investigating not only outright scams and fraud by those who purport to be helpful in settling foreclosures, but also those who are charging fees in excess of a few hundred dollars, including contingency fees, on the promise that they will stop the foreclosure, prevent the foreclosure, or collect money refunds, rebates or damages.

Most people are unaware of the fact that State Law in most states makes UPL (Unauthorized Practice of Law) not only illegal and subject to injunction, but actually a crime. In some states it is raised to the level of a felony and people have been and are being prosecuted criminally on a very aggressive basis in several states. Jail and fines are not unusual punishments.

Our goal is to legally help people without aiding or abetting a lay person in the unauthorized practice of law. Some of the red flags that prosecutors look for is whether promises have been made regarding the outcome of entering into a retainer agreement, whether a contingency fee payable to a non-lawyer is involved, whether the upfront fee exceeds a few hundred dollars, and whether the services being rendered go beyond the audit and report and into the area of opinions and advocating for the client about the lender and borrower legal liability, rights, obligations, procedures and consequences.

It is possible there might be lee-way for some entities that have qualified themselves as collection agencies to receive a percentage of actual dollars recovered, but this ignores many If not most of the rights of the owner(s) of a home threatened with foreclosure, sale, or eviction.

Thus if your goal is to perform audits and issue reports, that is fine. If you wish to perform further services, it must be for a licensed attorney in the jurisdiction where the property is located. We have a growing list of attorneys who are forming an informal mentoring network with whom you could work. However, it is not possible that you can, on a some geographically remote basis, perform the services or do the work that is ordinarily performed in a law office — unless you qualify as a paralegal and you are associated with licensed local counsel. We can support local counsel and educate him or her in this area of increasingly complex litigation. Your financial arrangements would best be through the office of a local attorney rather than directly with a client. If you are providing services to an attorney (with a license in the proper jurisdiction) then you are not offering legal services to the public.

We do find that most ‘audit servicers’ are either re marketing the services of companies that actually do the work or are trying to perform the services themselves without specific training or experience in doing so. While channeling sales through a conduit is a perfectly proper way of doing business, it is a red flag at the moment for prosecutors and bar associations. Obviously not having the credentials to actually perform the work would tend to work against you if you are requested to perform the audit. We consider a person qualified to perform these audits ONLY if they have prior auditing experience with a financial institution or regulator. And they must have the qualifications to appear as an expert at trial if that becomes necessary. If the ‘Auditor’ is receiving a fee contingent upon the outcome of the case, the credibility of the expert is severely impaired.

It is our opinion and the opinion of most regulators that most of the work of foreclosure defense and offensive including strategies involving violations of disclosure requirements under TILA or Resolution requirements under RESPA, etc., constitutes the practice of law. Many companies are springing up to try to offer these services and we believe that they are low-hanging fruit for criminal prosecution, regardless of how surprised or offended they are by the interpretation of the law and the legal requirements. For that reason we issue this information prior to commencing any relationship with an entity or person that wishes to offer auditing services.

Assuming you are seeking to offer services within the narrow constraints outlined above, then please send a return email with your acknowledgment and a member of our staff will contact you in order to qualify you and commence contractual work.

Neil F. Garfield, Esq.
ngarfield@msn.com

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