The Economics of Justice

There is no doubt in the minds of most serious trial lawyers who dig deep enough that homeowners can and should win all or most of the foreclosure cases. There is also little doubt that homeowners will lose by default or by inadequate presentation and well-founded attacks on the foreclosing party’s existence and ownership of the loan.

But in the absence of a well founded presentation, in the absence of well founded objections and in the absence of appropriate cross examination and aggressive investigation and analysis, a complete stranger will emerge as the victor in a fight over whether the home should be sold in foreclosure.

This leaves the homeowner and the investor whose money was used to fund or acquire the loan in the dust. It eliminates workouts that are best for both the investors and the homeowners. It rewards the culprits who condemned this country to more than a decade, so far, of strife and inequality of wealth. And it happens because of a defect in the judicial system that is wholly reliant on the financial resources of parties to a dispute.

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.


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see The Truth About American Mortgages

I listen to a phone message message. The air of despair is evident in the voice of a homeowner who desperately wants to stay in her home. She correctly believes that the parties seeking foreclosure sale of her property are complete strangers to the loan and the property. She would do a workout with anyone who is entitled to her payments, assuming the debt still exists.
She knows in her bones that what is happening is legally and morally wrong. But she can’t do anything about it without spending thousands of dollars on trial lawyers, forensic analysts and ghost writers. In the end she knows that even in cases of blatant fraud, even when it is clear that she is a victim of illegal behavior, the party with the money has multiple layers of lawyers at their disposal who work tirelessly to make every wrongful act appear right.
It sounds like she is drifting. I can ask around but it is unlikely that any lawyer will take on her case without some upfront retainer and assurance that future fees will be paid. I know this is unfair but this is how our system has always worked. Organizations like Legal Aid do not generally accept cases involving foreclosure defense.

The American judicial system boils down to this: if you want representation in a courtroom and it is not a criminal matter, you are on your own. People who commit wide scale fraud across the country generally have deep or nearly infinite pockets. They have lawyers for their lawyers. The bottom line is that anyone can commit fraud and get away with it if they have the assistance of lawyers drafting the documents to make the illusion seem real and more lawyers to represent “clients” in court that either don’t exist or who have no nexus to the loan, debt, note or mortgage. The only risk in committing fraud is the risk of targeting a victim who has equal access to lawyers, money and investigators. Consumers are fair game.
The appropriate defense of foreclosure actions would include private investigators and aggressive discovery, in addition to carefully worded pleadings and motions. It would require adept lawyers who understand how to present a motion, how to play the discovery game and how to use well-founded objections and good cross examination at trial.
If the homeowner had deep or infinite pockets, the cost of defense would be over $100,000 and in at least one case of mine was close to $200,000. Very few homeowners have access to that kind of money. If they did, they would have won most of the time. And now that fee awards have virtually been eliminated in a twist of a legal fiction, there is little hope of collecting fees from the foreclosing party except as damages for wrongful foreclosure and related claims.
Even on the fee awards that exist, the generally accepted amount of “appropriate” or “reasonable” fees is usually set at around $25,000-$50,000. Sometimes that is right but more often it is not. So a lawyer seeking to recover his fees upon winning the case is going to get, in the best of circumstances a fraction of the billable time he/she spent on the case.

Lawyers are required to do some pro bono work, but those cases typically take a back seat to the cases where the client is paying “full freight.” So file research and analysis is scarce when the fees are low or nonexistent. In large firms pro bono cases are frequently treated with the same respect as clients paying the fees. But that is because they can. A solo practitioner needs to pay his own mortgage and living expenses. Taking a foreclosure defense case pro bono and giving it all it deserves would mean virtually endless hours spent in investigation, analysis, legal research and strategic planning for presentations.
So the upshot is that really good legal representation is scarce even from the best of trial lawyers. And getting any legal representation is getting increasingly difficult because lawyers don’t like losing. They also privately admit that they don’t want to “look silly” or “anger the judge” because deep inside they believe their client does owe the money and it doesn’t matter who is collecting. It doesn’t matter that a typical loan workout would have eliminated most foreclosures. They are going to lose most of the time without presenting a well focused defense based upon the lies, fabrications and forgeries that are used to pursue foreclosures.
Most lawyers go through the motions and are content to say that at least they bought time for their clients. It’s easy for me to say that it shouldn’t work that way. Lawyers should seek to win because they can win. But reality sides with the lawyers who do not have clients who are able to pay the going rates for legal representation or who cannot pay the extra amounts necessary to present a full throated defense.
But reality  does not side with lawyers who refuse to work on contingency in an action for damages based upon false and fraudulent presentation of falsified evidence. For lawyers who take the time to truly understand what the banks have done, they will then understand why the homeowner should not only be able to avoid foreclosure, but should also get monetary damages including in many cases punitive damages.
But it takes a genuine belief on the part of the lawyer to do it. Most lawyers don’t have that belief because they are ignorant of the true facts and the law. Those lawyers who have done the work have been rewarded handsomely for their efforts in what are not confidential settlements under seal of confidentiality. I know because I have seen many of them but I am restricted as well.
In every system lawyers are not required to work unless they get paid a reasonable fee. Unfortunately reasonable fees are usually beyond the means of the typical homeowner.
So like the other intrepid homeowners who won’t give up their home without a fight, you must piece together a defense using your own skills, perhaps a paralegal, a forensic analyst and ghost writers like me to get you over the top. You are right that you should win because most foreclosures are fraudulent and probably criminal schemes. And that is why homeowners do win cases — if they present their defense correctly and they are able to gain access to some attorney who can guide them on trial practice.

Innovative Lawsuits Test the Credibility of Securitized Loans

For further information or assistance please call 954-495-9867 or 520-405-1688.



If you ever saw the movie “The Firm” from the book by John Grisham, you know the ending. The whole system was rigged but what finally produced a result was mail fraud, which is generally off the radar screen for any lawyer combating powerful opponents. The lesson for the perpetrators of crimes, predatory loans and so forth is that they can’t cover everything. There are too many ways that they faked the deals from top to bottom. Mail fraud might be one of them. And as you will see, talking to the borrower might be another. One lawsuit against US Bank shows that anyone who really does their homework might be able to take down Goliath with just such an innocuous provision.

A word of caution here  — these strategies are predicated in part on the assumption that the entire loan process was fraudulent, where there were dozens of undisclosed entities taking undisclosed fees from a large pool of investor money used in part to fund mortgage that were not tied to any documents signed at closing. The documents that were signed had no connection to the actual lender and the entity identified as the lender was a pretender paid to act as though it was loaning money. The reason I mention this is not to hammer down on the reality of those mortgages, but to suggest that a judge who still thinks that the borrower is a deadbeat trying to get out of legitimate loan, is likely to find problems with “innovative strategies.” But it is also true that there are a variety of things that bother many judges more and more about these loans and the foreclosures.

The article in the New York Times by Peter Eavis goes into some detail, but the essence is in this quote:

Not engaging with borrowers who have missed payments may not seem like the strongest grounds for litigation against a bank. Yet that is the basis for an innovative lawsuit against U.S. Bank, a division of U.S. Bancorp, one of the largest banks in the country. The legal action could mean fresh legal problems for other big mortgage banks, as well. It is the latest threat to emerge from a barrage of cases that have forced big banks to pay tens of billions of dollars in recent months.

The lawsuit focuses on a popular type of government-guaranteed mortgage that in fact requires that banks take distinct steps — like trying to arrange a meeting — when borrowers stop paying.

The lawsuit is being brought by Advocates for Basic Legal Equality, a legal aid group. In a twist, the group is suing U.S. Bank in federal court in Ohio on behalf of the United States government, using the False Claims Act. This legislation, which dates to the Civil War, allows private citizens and groups to pursue legal action against companies and other entities for receiving payments from the government on false grounds.

The more you drill down on the existing laws, rules and regulations the more violations you will find. And when it comes to foreclosing, anyone watching this nightmare unfold must get to to wondering about why all of these deals went to foreclosure instead of workouts. The answer is that the foreclosure judgment and the foreclosure sale is part of a massive cover-up of massive fraud. And for the most part, the government has decided to (a) not prosecute real claims for real damages and real crimes and (b) not provide individual homeowners with information already obtained about their homes, their mortgages and their foreclosures that would shut the process down if known. The latter is what most irks Elizabeth Warren who now officially speaks for the average American and who seeks a level playing field in the Senate of the U.S. Congress.

People like Senator Warren, Sheila Bair, former FDIC chief, and others who have been outspoken about the out right fraud — i.e., nonexistence of the loans being used as a basis for foreclosure — keep getting stepped on, but the recent “promotion” of Warren is at least somewhat encouraging in that it shows that the leadership of the Democratic party recognizes they can no longer ignore her or the issues she speaks about. She speaks at gathering that attract voters from across the political spectrum and she is proving what I said years ago a constantly ever since — if you want to win by a landslide, run against the banks  and the people they own in our government.

New York to Assure Legal Aid in Foreclosure Cases




New York court officials outlined procedures Tuesday aimed at assuring that all homeowners facing foreclosure were represented by a lawyer, a significant shift that could give thousands of families a chance to strike a better deal with lenders.

Yana Paskova for The New York Times

Jonathan Lippman, New York’s chief judge, wants all homeowners facing foreclosure in the state to have legal representation.

Criminal defendants are guaranteed a lawyer, but New York will be the first state to try to extend that pledge to foreclosures, which are civil matters. There are about 80,000 active foreclosure cases in New York courts.

Under the procedures, which will be put in place in Queens and Orange Counties in the next few weeks and then across the entire state, any homeowner in foreclosure who does not have a lawyer will be supplied one by legal aid groups or other volunteer groups.

New York has been successful in getting foreclosure defendants to show up at settlement meetings overseen by a judge and attended by the lender, but most are unassisted and have little idea how to proceed. The cases are overwhelming the courts.

The state’s chief judge, Jonathan Lippman, said the current system was “such an uneven playing field.”

“Banks wind up with the property and the homeowner winds up over the cliff, on the street,” Judge Lippman said. “It doesn’t serve anyone’s interest, including the bank’s.”

Legal aid groups will find the task of representing foreclosure defendants easier if the state legislature agrees to Judge Lippman’s request for a $100 million increase in legal services programs spread over the next four years. Current funding for legal services in the state is about $200 million a year drawn from a variety of public and private sources.

New York, which is one of the 23 states where foreclosures must be overseen by a judge, has been more aggressive than most in trying to reshape the housing cases flooding its courts. Lawyers in New York are now personally liable for the accuracy of the documents they represent in foreclosure cases, a requirement that some find onerous.

Legal aid organizations in the 23 states say that they do not have enough money or lawyers to help everyone who wants to be helped. New Mexico has started classes to help train people to represent themselves in court. Legal aid groups in other states are forced to choose among families, helping some but not others.

The Legal Aid Society, which assists families and individuals in New York City, will be working with the courts to supply the necessary lawyers in Queens, a foreclosure hotbed.

“There’s a huge demand,” said Steven Banks, the society’s attorney in chief. “The new model is focused on redeploying resources to attempt to take more of an early intervention in the case rather than at the 11th hour when the sheriff is on the way.”

Judge Lippman said he hoped that the lawyers would reach out to defendants before they even appeared in court.

Citing the 1963 ruling by the United States Supreme Court that state courts are required by the Constitution to provide counsel in criminal cases to defendants who cannot afford their own, Mr. Lippman said in an interview this was the right moment to extend that provision.

“Today it is an equally obvious truth that people in civil cases dealing with the necessities of life can’t get a fair day in court without a lawyer,” he said.

Legal Aid, April Charney et al File Amicus Brief

It’s not just a really good brief, it is a good resource. I recommend everyone read it. While it is specifically and powerfully directed against MERS, it also attacks the heart of the securitization scheme in terms of its effect “on the ground.”  You can learn a lot about the mortgage mess just by reading this document.

MERS Amicus Brief

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