Livinglies's Weblog

REMEMBER TO DIAL IN ON NEW NUMBER FOR MEMBERS’ TELECONFERENCE TONIGHT: 1-626-677-3000

Editor’s Comment: Every case is different so this is not a comment on any specific case nor should you act on anything you read here without in-depth consultation with a trusted adviser.

As I have stated many times in my appearances at seminars, radio and television the first rule is don’t exchange a predatory lender for a predatory attorney. The same holds true for any organization offering services to consumers or homeowners in financial distress. The more popular ones may have achieved that status by good marketing and advertising rather than by efficient use of their skills which produces a satisfactory result to the client.

On the other hand, homeowners and consumers must understand that the practice of law is a business. None of these businesses played any major part in creating your distress. None of them owe you anything; nonetheless most homeowners and consumers contact my organizations do so under the mistaken belief that we are a foundation with infinite resources or that because they were screwed by the banks there is some special obligation on the part of the attorney, counselor, or other service provider. No such obligation exists.

The amount of money that such service providers charge is determined by the marketplace, ethical rules and disciplinary rules, and in certain cases by a web of regulatory or statutory restrictions or prohibitions. As soon as any service provider accepts you as a customer they are creating a liability for themselves and if they are offering a payment plan they are creating a risk that they will not be paid a reasonable fee for the services that they provide.

The second rule is that anyone who guarantees you a result is either lying or stupid. Stay away from them. Anyone who will tell you that they can do anything a lawyer can do for much less money is essentially offering their services under the banner of “unauthorized practice of law” which in some states is an actual felony. But that doesn’t mean that you can’t use alternative service vendors to assist you in getting information, analyzing information and presenting the information in a format that would be useful to an attorney or judge.

When speaking to a prospective client I often hear that other lawyers are charging much less than what I charge. My answer is always the same, to wit: if you’re shopping for price than you are in the wrong place; if you want Neil Garfield to represent you then you are in the right place but you have to choose whether you are willing to pay a higher price for a 66-year-old veteran of Wall Street, real estate investments and trading, and 34 years as a trial lawyer.

In places like South Florida where competition has become intense, several law offices have created the illusion that they are an anti-foreclosure mill by offering low down payments and low monthly payments. Such law firms are concentrating on developing volume rather than developing their skills and prowess in the courtroom. I have had to clean up the mess of many prior attorneys in order to present the case to a new lawyer. And of course the prospective client has mistaken the actions or inaction of prior counsel as a reason to distrust any member of the bar; such prospective clients jump from the frying pan into the fire when they enter into various agreements involving the execution of documents transferring title and contingency fee agreements which lack specificity on how they will be applied.

Back in 2007 and 2008 couldn’t find a lawyer that understood what I’m talking about or who would be willing to defend a foreclosure action for any amount of money because they thought they would lose every one of those cases. Now a number of cases are being lost not because there are no lawyers, but rather because the lawyers have taken on a large caseload without enlarging their staff to handle it. Therefore they end up unprepared in court conceding points that should be in issue.

As I have been saying for the last two or three years we are far beyond the point where a homeowner representing themselves is likely to get any satisfactory result. You will hear anecdotal stories where sometimes the homeowner was able to get a good result; but for the most part these cases are won on a knowledge of civil procedure and a use of strategy and tactics based upon prior experience in motion practice and trial practice. In this case you also want people who are already knowledgeable about negotiable instruments, the UCC,  contract law, property law, and the actual workings of Wall Street. The lawyer should be competent to be able to follow both the money trail and the paper trail and to compare the two as part of his preparation for his appearance in court.

The time to consult with an attorney is at the first moment that you think you might have a problem. Going to a neighbor or friend and following advice based upon a small number of anecdotal tales will probably result in you producing documents or making statements that will be later used against you. Like when the bank tells you what to say in a hardship letter making it clear that you couldn’t possibly pay any mortgage when in fact you could make mortgage payments based upon reasonable terms. Also, when a representative of the bank tells you that you should stop making payments they are telling you to breach the contract you signed. I make it a practice never to advise clients to do anything that puts them in a worse position than they are already in.

There is a built-in conflict between lawyer and client that is not ever likely to be resolved. The client wants a particular result and the lawyer wants to get paid for the work he has done regardless of the result. They are both right. The reality is that the lawyer should get paid for the work that he does and hopefully client has chosen a lawyer carefully bus and enhancing the likelihood that they will get a satisfactory result.  There is also the age old conflict over contingency fees and how they should be applied. At the moment my opinion is that the use of a contingency fee when the only result is a reduction in the amount of the principal demanded is probably going to be hard to enforce and may violate ethical rules and disciplinary rules governing how attorneys charge for their services. On the other hand where there is a recovery of an actual cash payment, a contingency fee is perfectly valid.

The argument over how attorneys get paid a lot of money on a contingency fee can be avoided simply by paying the attorney for the work he does. In the absence of being paid a reasonable fee in full the attorney is entitled to enhance the likelihood of him being paid with a contingency fee. Contingency fees vary from 10% or the way up to 50% depending upon the state, local rules and the situation at hand and usually do not cover the cost of attorney’s fees for an appeal or an administrative action that is ancillary to the civil proceedings in state or federal court.

The time to change attorneys is when you have lost faith in the capacity or willingness of the attorney or law firm to advocate on your behalf with all available resources. You should be aware that the successor attorney will be completely disinterested in what you have already paid the prior attorney. As far as the new attorney is concerned, it is a new case and requires a retainer and monthly payments, if that is what the attorney offers.

When you interview an a prospective attorney you should take the lead and inquire about his or her experience and what the reasonable expectations should be on the outcome of the case. AND if you know about a deadline, then keep after the lawyer and make sure they don’t blow the deadline.

I’ll be taking questions tonight on the members teleconference. REMEMBER TO USE THE NEW NUMBER: 1-626-677-3000

Short sales may show up on credit reports as foreclosures
http://www.inman.com/2013/06/04/short-sales-may-show-up-on-credit-reports-as-foreclosures/

WANT TO KNOW WHY NO PROSECUTIONS OF TOO BIG TO JAIL BANKERS? LOOK NO FURTHER THAN ERIC HOLDER: http://www.huffingtonpost.com/2013/06/04/eric-holder-1999-memo_n_3384980.html?ncid=txtlnkushpmg00000029

Filed under: CDO, CORRUPTION, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud | Tagged: statutory restrictions, Unauthorized Practice of Law | 83 Comments »