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 itâs 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 someoneâs mortgage modified?
Letâs take the first one first, shall we.Â Just because the rest of the country is being illogical doesnât mean we have to be here on Mandelman Matters.Â Okay, letâs go with #1:
Question:Â If youâre at risk of losing your home, should you hire an attorney?
Answer:Â Of course you should.Â Why would you even ask such a question?
If youâre 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.Â Chances are that your home is the single largest investment youâll ever make.Â 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.Â At the other end there are numerous options involving the various chapters of the Federal Bankruptcy Code.Â And in the vast middle, thereâs the potential for any number of flavors of loan modification, short sale, Deed in Lieu, and even the increasingly popular âstrategic defaultâ.Â And thatâs to say nothing of second mortgages, thirds, HELOCs or âpurchase money, credit card debt, property taxesâŚ 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,, RESPAâŚ and I have no idea what that acronym stands forâŚ 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.Â I donât know how anyone else feels about that sentence, but itâs starting to sound dangerously close to âcontract lawâ to me.Â 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 homeownerâs rights.Â Their view is: If youâre not going to pay them whatever they think you owe them, then they want the house back through foreclosing on the property.
And you donât need to hire a lawyer for any of that?Â Whatâs in the world is going on here?Â Did I inadvertently take a nap and now Iâve awoken in a meaner and stupider time and place?
If youâre at risk of losing your home and youâre up against Bank of America for exampleâŚ get a lawyer, okay?Â Or donât, if you donât want to.Â I donât care which way you go; itâs your house and your business.Â But if you ask meâŚ 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.Â As a result, the banks and servicers have plenty of lawyers hanging around, I might add.Â Banks, after all, donât just go off half-cocked, foreclosing willy-nilly without the advise of legal counsel.Â But Iâm supposed to absolutely shun the idea of hiring my own legal representative?Â Why?
Well, according to many in our government, and even some at various Bar Associations, itâs 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?Â Thatâs why I shouldnât hire an attorney when Iâm at risk of losing my home?Â Whatâs wrong with these people?Â Are they high?Â Stupid?Â Whatâs the deal?
First of all, according to the California State Barâs own numbers, over the last year theyâve taken action against fewer than two-dozen lawyers in a state with 206,000 plus attorneys.Â So what and who cares?Â That should persuade me to go it alone against Bank of America?Â I donât think so.Â They also add that they are investigating hundreds of others.
Hundreds of attorneys are under investigation.Â Really.Â So, woo-friggin-hoo.Â There are always hundreds of doctors under some sort of investigation in this country and it doesnât do anything to deter me from getting medical attention when I find myself at risk of developing a bad case of the sniffles.Â Why in the world would I let it stop me from making sure my rights are being protected when Iâm losing the single biggest investment of my lifetime?
Letâs use another example: Letâs say I was arrested for armed robbery.Â 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?
âCome on MandelmanâŚ you donât need a lawyerâŚ if you have any legal questions you can just ask the Assistant D.AâŚ heâll be more than happy to help.Â Besides, you do realize that 50% of all lawyers graduated in the bottom half of their class.Â You wouldnât want an underachiever representing you, would you?Â Probably better off handling it yourself, donât you see that?â
âGee no, Officer KrupkeâŚ I donât see that.Â Now, could you please pull that German Shephard back another foot away from my genitalsâŚ thanks so much.Â Yes, I knowâŚ civil rights are often overrated.â
And since weâre talking Officer Krupke, for those of you who can remember West Side StoryâŚ hereâs my version of a great songâŚ the music by Leonard Bernstein, the lyrics by Stephen Sondheim.
Dear kindly Sergeant Krupke,
You gottaâ understand,
We thank you for your input,
But the banks are out of hand.
Obamaâs done nothing,
It defies explanation,
All we want is a loan modification.
Gee, Officer Krupke, weâve got some exposure;
Weâre at risk of losing homes to a foreclosure.
So, we want a lawyer,
For that weâll say thanksâŚ
Golly Moses, weâre up against the banks!
Chorus of Homeowners:Â Yes, indeed, we are up against the banksâŚ
Dear kindly Judge, your Honor,
My realtor never said.
That if I bought the house I bought,
Iâd spend my life in red.
My bank said Iâd refinance,
Then said no when I tried.
My lawyer said we can sue them cause they lied.
Chorus of Lawyers:Â Yes we will, we will sue them âcause they lied.
Officer Krupke, youâre really a square;
We donât need a HUD counselor, we need a lawyerâs care!
Stop saying we donât need one, that campaign should be curbed.
If you donât think so youâre mentally disturbed!
My banker is a bastard,
My brokerâs an S.O.B.
My realtorâs always plastered,
My senator pushes tea.
The media is clueless.
Wall Street should be in jail.
Goodness gracious, theyâre all too big to fail?
Chorus of Bankers:Â Yes!Â We are, we are all too big to failâŚ
OhâŚ Officer Krupke, youâre really a slob.
We wouldnât need no loan mods if the bankers did their job.
We gave them all bailouts, to cover their blunder.
Pay us back, we donât care if they go under.
Chorus of Homeowners:Â We donât care if they go underâŚ
Dear kindly HUD counselor,
You say go earn a buck.
But unemploymentâs 10 percent,
And you are such a schumck.
If you canât help me keep my house,
My lawyer, Oy gevalt!
He will help me strategically default!
Chorus of Lawyers:Â Yes! Weâll help him strategically defaultâŚ
OhâŚ Officer Krupke, youâve done it again.
The question of a lawyer, is not if, but itâs when.
We donât care if you say that a few are bad seeds.
Theyâre the ones who look out for our needs.
Gee, Officer Krupke,
Weâre using our brains,
If a lawyer doesnât work, weâll pour cement down our drains.
Gee, Officer Krupke,
What else are we to do?
Gee, Officer Krupke,
Everyone sing:Â Gee, Officer KrupkeâŚ KRUP YOU!
Okay, well enough of that, I suppose.Â Although I will admit that I was having fun there for a few minutesâŚ alas, itâs time to get back to the stupidity of real life in 2010âŚ letâs turn to question #2âŚ Iâll restate it so weâre all on the same page, since I know how West Side Story can lead one to distractionâŚ
2. Now that we have all clearly seen that itâs 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 someoneâs mortgage modified?
Whatâs the deal here?Â Seriously.Â I understood before the âreport cardsâ came out that some people would not realize what was going on with the whole loan modification thing, really I did.Â I thought they were idiots then too, but I understood which facts they were missing.Â But then, in late July the report cards came out and showed without any question that the banks werenât doing what they had promisedâŚ and contracted to do, right?
Remember?Â Bank of America like 4%.Â Wells Fargo like 6%.Â Or maybe you can reverse those percentages, Iâm certainly not going to bother looking them up because it doesnât matter.Â The banks havenât done what they said they would do.Â So, why is it my lawyerâs fault that my loan didnât get modified?
The damn President of the United States gave the banks several TRILLION DOLLARS and he canât 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 homeownersâŚ yoohoo!Â HomeownersâŚ are you listening?Â Youâre no picnic in this regard either, Iâm hearing.Â Youâre complaining about your attorneys too!Â Unbelievable!Â Some of you are even blackmailing your lawyer AFTER he or she gets you a modification from your bank.Â Iâve 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 youâve decided that you could have done it on your own, so you want your money back or youâre calling the State Bar!
I even know of two excellent attorneys that have helped hundreds of homeowners who wonât help with loan modifications anymore because of crap like that.Â Nice job guysâŚ letâs blackmail the good guys here, then our neighbors will only have the bad ones left when they need help saving their home.
PeopleâŚ homeownersâŚ cut the crap right now!Â Itâs not all of you, I realize.Â Iâm just talking to the group thatâs engaged in those sort of thing.Â I know youâre pissed.Â You have every right to be.Â But letâs shoot at the bad guys, okay?
First of all, you have all tried it yourself before you hired your attorneyâŚ yes you have, Iâve never talked to one of you that hadnât.Â And second of all, you didnât hire your lawyer to get a loan modification, you hired him or her to try his or her best to get one.Â The outcome is uncertain.Â The outcome is ALWAYS uncertain when you hire an attorneyâŚ thatâs WHY you hire an attorney.
If the outcome were CERTAIN, you wouldnât NEED an attorney, right?
But, itâs not just the homeowners that say this stuff, itâs the California State Bar Association too, and thatâs just unforgivably stupid, if you ask me.Â You guys at the State Bar are lawyers, for Godâs sake.Â What part of your thought process is defective?Â Did you drop too much blotter acid in the 1960s, whatâs the deal?
Letâs 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.Â Each one would come with a 50% principal reduction, and an interest rate of 2% for 30 years.Â Why?Â Because thatâs how the lawyers would make the most money, thatâs why.Â Lawyers offer to try to get loan modifications for a fixed fee of three or four thousand dollars.Â They donât want it to take a year, and the fact that it often does is not the lawyerâs fault, itâs the bankâs doing.
Itâs the banks that canât answer the phone until the 100thÂ ring.Â Itâs the banks that lose files four times in a month.Â Itâs 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 awayâŚ both for stealing and for being morons for throwing away a law degree to get checks for $3,000.Â They could have worked on Wall Street and thrown their careers away for much larger amounts than that.
B. Youâre not hiring a lawyer to modify your loan.Â Itâs your bank that does that and everyone should know that.Â Youâre hiring a lawyer to help you make the best out of an horrific situation.Â You didnât create the situation, and the fact that you refinanced your home to fix it up, or go to Europe is irrelevant.Â 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 loanâŚ when it would, by the wayâŚ and the bank forecloses anywayâŚ letâs blame the people that are actually to blameâŚ the bankers.Â The lawyers all feel terribleâŚ theyâre all going broke because it takes so long to find out anything from a bankâŚ unless you want a loan, of course, and then they can say no in a matter of minutesâŚ AND EVEN WITH ALL THAT BEING THE CASEâŚ
THE ANSWER IS YES!Â YOU STILL NEED TO HIRE A LAWYER WHEN YOUâRE AT RISK OF LOSING YOUR HOME.Â PERIOD.
Because itâs a better answer that you can come up with on your own, thatâs why. Â And I donât care how many episodes of Law & Order youâve watched.
Iâve seen thousands of homeowners get loan modifications by working with attorneysâŚ Iâve even seen quite a few principal reductions attorneys have been able to get banks to agree to.Â Homeowners on their own almost never succeed. And the ones that have written to me to say they did manage it on their ownâŚ all three of them, by the way, all got modifications so small that I had to chuckle.Â One saved $40 a monthâŚ for the first five years anywayâŚ so, woo-friggin-hoo for them.
Lawyers are the only answer weâve got to help us regular people get through this mess.Â If we vent our frustrations on them they wonât help us, and then homeowners will be on their own against their banks.Â And in case you donât already know how that story endsâŚ
They shoot the Czar and Czarina, Alexia and Nicholas Romanoff, and their childrenâŚ and then we all wonder if Anesthesia escapedâŚ
Now, Iâll ask one more timeâŚ would you like a torch, a pitchfork or an attorney?Â Last callâŚ