ONCE AND FOR ALL, THE ANSWER IS YES. Water is wet, the sky is blue, and you need a lawyer… Period.
Originally posted in January 2010.
Okay, I have two questions that really need answers:
1. Why is there controversy or uncertainty over whether someone at risk of losing his or her home should or should not hire an attorney?
2. Now that we have all clearly seen that it’s the lenders and servicers that have failed to modify mortgages, why do I still hear pejorative statements made about lawyers who were hired but failed to get someone’s mortgage modified?
Let’s take the first one first, shall we. Just because the rest of the country is being illogical doesn’t mean we have to be here on Mandelman Matters. Okay, let’s go with #1:
Question: If you’re at risk of losing your home, should you hire an attorney?
Answer: Of course you should. Why would you even ask such a question?
If you’re at risk of losing your home, for whatever reason, your options are many and varied, and the choices you make can be positive, or they could cost you an absolute fortune and plague you for the rest of your life. Chances are that your home is the single largest investment you’ll ever make. If that investment goes south for whatever reason, you should absolutely hire an attorney to help you make the best out of a bad situation.
At one end of the spectrum you may want or need to sue your bank. At the other end there are numerous options involving the various chapters of the Federal Bankruptcy Code. And in the vast middle, there’s the potential for any number of flavors of loan modification, short sale, Deed in Lieu, and even the increasingly popular “strategic default”. And that’s to say nothing of second mortgages, thirds, HELOCs or “purchase money, credit card debt, property taxes… the list goes on and on.
There are issues related to deficiency judgments, income taxes, the Fair Debt Collection Practices Act, or at the state level in California, the Rosenthal Act, Truth in Lending or TILA,, RESPA… and I have no idea what that acronym stands for… all of which afford homeowners some rights, and limit others.
A person at risk of losing a home may want to try to negotiate the modification of what may, or may not be a legally binding contract in an effort to produce an amended contract or perhaps an entirely new contractual agreement. I don’t know how anyone else feels about that sentence, but it’s starting to sound dangerously close to “contract law” to me. A person in the situation has rights that need to be protected, and the servicer or lender sitting on the other side of whatever the transaction turns out to be, is not at all concerned with protecting a homeowner’s rights. Their view is: If you’re not going to pay them whatever they think you owe them, then they want the house back through foreclosing on the property.
And you don’t need to hire a lawyer for any of that? What’s in the world is going on here? Did I inadvertently take a nap and now I’ve awoken in a meaner and stupider time and place?
If you’re at risk of losing your home and you’re up against Bank of America for example… get a lawyer, okay? Or don’t, if you don’t want to. I don’t care which way you go; it’s your house and your business. But if you ask me… I think you should get a lawyer.
There are so many legal issues involved when one is at risk of losing a home that a list would certainly fill hundreds of pages. As a result, the banks and servicers have plenty of lawyers hanging around, I might add. Banks, after all, don’t just go off half-cocked, foreclosing willy-nilly without the advise of legal counsel. But I’m supposed to absolutely shun the idea of hiring my own legal representative? Why?
Well, according to many in our government, and even some at various Bar Associations, it’s because there have been some number of attorneys that have done something wrong related to loan modifications, and some number that MAY have done something wrong in that regard.
Seriously? That’s why I shouldn’t hire an attorney when I’m at risk of losing my home? What’s wrong with these people? Are they high? Stupid? What’s the deal?
First of all, according to the California State Bar’s own numbers, over the last year they’ve taken action against fewer than two-dozen lawyers in a state with 206,000 plus attorneys. So what and who cares? That should persuade me to go it alone against Bank of America? I don’t think so. They also add that they are investigating hundreds of others.
Hundreds of attorneys are under investigation. Really. So, woo-friggin-hoo. There are always hundreds of doctors under some sort of investigation in this country and it doesn’t do anything to deter me from getting medical attention when I find myself at risk of developing a bad case of the sniffles. Why in the world would I let it stop me from making sure my rights are being protected when I’m losing the single biggest investment of my lifetime?
Let’s use another example: Let’s say I was arrested for armed robbery. Would the arresting officers and District Attorney put me in a room and try to convince me not to hire an attorney because there are hundreds of bad ones out there?
“Come on Mandelman… you don’t need a lawyer… if you have any legal questions you can just ask the Assistant D.A… he’ll be more than happy to help. Besides, you do realize that 50% of all lawyers graduated in the bottom half of their class. You wouldn’t want an underachiever representing you, would you? Probably better off handling it yourself, don’t you see that?”
“Gee no, Officer Krupke… I don’t see that. Now, could you please pull that German Shephard back another foot away from my genitals… thanks so much. Yes, I know… civil rights are often overrated.”
And since we’re talking Officer Krupke, for those of you who can remember West Side Story… here’s my version of a great song… the music by Leonard Bernstein, the lyrics by Stephen Sondheim.
Dear kindly Sergeant Krupke,
You gotta’ understand,
We thank you for your input,
But the banks are out of hand.
Obama’s done nothing,
It defies explanation,
All we want is a loan modification.
Gee, Officer Krupke, we’ve got some exposure;
We’re at risk of losing homes to a foreclosure.
So, we want a lawyer,
For that we’ll say thanks…
Golly Moses, we’re up against the banks!
Chorus of Homeowners: Yes, indeed, we are up against the banks…
Dear kindly Judge, your Honor,
My realtor never said.
That if I bought the house I bought,
I’d spend my life in red.
My bank said I’d refinance,
Then said no when I tried.
My lawyer said we can sue them cause they lied.
Chorus of Lawyers: Yes we will, we will sue them ‘cause they lied.
Officer Krupke, you’re really a square;
We don’t need a HUD counselor, we need a lawyer’s care!
Stop saying we don’t need one, that campaign should be curbed.
If you don’t think so you’re mentally disturbed!
My banker is a bastard,
My broker’s an S.O.B.
My realtor’s always plastered,
My senator pushes tea.
The media is clueless.
Wall Street should be in jail.
Goodness gracious, they’re all too big to fail?
Chorus of Bankers: Yes! We are, we are all too big to fail…
Oh… Officer Krupke, you’re really a slob.
We wouldn’t need no loan mods if the bankers did their job.
We gave them all bailouts, to cover their blunder.
Pay us back, we don’t care if they go under.
Chorus of Homeowners: We don’t care if they go under…
Dear kindly HUD counselor,
You say go earn a buck.
But unemployment’s 10 percent,
And you are such a schumck.
If you can’t help me keep my house,
My lawyer, Oy gevalt!
He will help me strategically default!
Chorus of Lawyers: Yes! We’ll help him strategically default…
Oh… Officer Krupke, you’ve done it again.
The question of a lawyer, is not if, but it’s when.
We don’t care if you say that a few are bad seeds.
They’re the ones who look out for our needs.
Gee, Officer Krupke,
We’re using our brains,
If a lawyer doesn’t work, we’ll pour cement down our drains.
Gee, Officer Krupke,
What else are we to do?
Gee, Officer Krupke,
Everyone sing: Gee, Officer Krupke… KRUP YOU!
Okay, well enough of that, I suppose. Although I will admit that I was having fun there for a few minutes… alas, it’s time to get back to the stupidity of real life in 2010… let’s turn to question #2… I’ll restate it so we’re all on the same page, since I know how West Side Story can lead one to distraction…
2. Now that we have all clearly seen that it’s the lenders and servicers that have failed to modify mortgages, why do I still hear derogatory statements made about lawyers who were hired but failed to get someone’s mortgage modified?
What’s the deal here? Seriously. I understood before the “report cards” came out that some people would not realize what was going on with the whole loan modification thing, really I did. I thought they were idiots then too, but I understood which facts they were missing. But then, in late July the report cards came out and showed without any question that the banks weren’t doing what they had promised… and contracted to do, right?
Remember? Bank of America like 4%. Wells Fargo like 6%. Or maybe you can reverse those percentages, I’m certainly not going to bother looking them up because it doesn’t matter. The banks haven’t done what they said they would do. So, why is it my lawyer’s fault that my loan didn’t get modified?
The damn President of the United States gave the banks several TRILLION DOLLARS and he can’t get them to modify loans on any sort of schedule, how the hell can some attorney make them do anything within a certain timeframe?
And homeowners… yoohoo! Homeowners… are you listening? You’re no picnic in this regard either, I’m hearing. You’re complaining about your attorneys too! Unbelievable! Some of you are even blackmailing your lawyer AFTER he or she gets you a modification from your bank. I’ve even see a few letters that some of you have written to your lawyer AFTER he or she got you a modification from your bank saying that now you’ve decided that you could have done it on your own, so you want your money back or you’re calling the State Bar!
I even know of two excellent attorneys that have helped hundreds of homeowners who won’t help with loan modifications anymore because of crap like that. Nice job guys… let’s blackmail the good guys here, then our neighbors will only have the bad ones left when they need help saving their home.
People… homeowners… cut the crap right now! It’s not all of you, I realize. I’m just talking to the group that’s engaged in those sort of thing. I know you’re pissed. You have every right to be. But let’s shoot at the bad guys, okay?
First of all, you have all tried it yourself before you hired your attorney… yes you have, I’ve never talked to one of you that hadn’t. And second of all, you didn’t hire your lawyer to get a loan modification, you hired him or her to try his or her best to get one. The outcome is uncertain. The outcome is ALWAYS uncertain when you hire an attorney… that’s WHY you hire an attorney.
If the outcome were CERTAIN, you wouldn’t NEED an attorney, right?
But, it’s not just the homeowners that say this stuff, it’s the California State Bar Association too, and that’s just unforgivably stupid, if you ask me. You guys at the State Bar are lawyers, for God’s sake. What part of your thought process is defective? Did you drop too much blotter acid in the 1960s, what’s the deal?
Let’s get a few things straight here:
A. If it were up to the attorney, a loan modification would take 72 hours from start to finish. Each one would come with a 50% principal reduction, and an interest rate of 2% for 30 years. Why? Because that’s how the lawyers would make the most money, that’s why. Lawyers offer to try to get loan modifications for a fixed fee of three or four thousand dollars. They don’t want it to take a year, and the fact that it often does is not the lawyer’s fault, it’s the bank’s doing.
It’s the banks that can’t answer the phone until the 100th ring. It’s the banks that lose files four times in a month. It’s the banks that are the problem here, not the attorneys.
And if there really are some number of rouge lawyers traveling through the countryside stealing $3,000 checks from homeowners, find them and put them away… both for stealing and for being morons for throwing away a law degree to get checks for $3,000. They could have worked on Wall Street and thrown their careers away for much larger amounts than that.
B. You’re not hiring a lawyer to modify your loan. It’s your bank that does that and everyone should know that. You’re hiring a lawyer to help you make the best out of an horrific situation. You didn’t create the situation, and the fact that you refinanced your home to fix it up, or go to Europe is irrelevant. No one saw that housing prices were going to drop by 40-50% because no one thought the banks were this evil or that our government was this stupid.
So, when an attorney fails to get a bank to agree that it would make more sense to modify a loan… when it would, by the way… and the bank forecloses anyway… let’s blame the people that are actually to blame… the bankers. The lawyers all feel terrible… they’re all going broke because it takes so long to find out anything from a bank… unless you want a loan, of course, and then they can say no in a matter of minutes… AND EVEN WITH ALL THAT BEING THE CASE…
THE ANSWER IS YES! YOU STILL NEED TO HIRE A LAWYER WHEN YOU’RE AT RISK OF LOSING YOUR HOME. PERIOD.
Because it’s a better answer that you can come up with on your own, that’s why. And I don’t care how many episodes of Law & Order you’ve watched.
I’ve seen thousands of homeowners get loan modifications by working with attorneys… I’ve even seen quite a few principal reductions attorneys have been able to get banks to agree to. Homeowners on their own almost never succeed. And the ones that have written to me to say they did manage it on their own… all three of them, by the way, all got modifications so small that I had to chuckle. One saved $40 a month… for the first five years anyway… so, woo-friggin-hoo for them.
Lawyers are the only answer we’ve got to help us regular people get through this mess. If we vent our frustrations on them they won’t help us, and then homeowners will be on their own against their banks. And in case you don’t already know how that story ends…
They shoot the Czar and Czarina, Alexia and Nicholas Romanoff, and their children… and then we all wonder if Anesthesia escaped…
Now, I’ll ask one more time… would you like a torch, a pitchfork or an attorney? Last call…