TOO GOOD TO BE TRUE HOMEOWNER SOLUTIONS

Feb 13, 2011

I know this is going to get more than a few people mad at me. But here are some rules of thumb to detect when you have been approached by someone with a “solution” to your mortgage problem, when in fact, at best they are mistaken and at worst, they are scam operators:

GUARANTEES: If the service involves anything more than information a guarantee is a dead ringer for a scam. Even in the area of information, those of you who have ordered services from us will see disclaimers all over the place. Much of the information posted by bankers is either wrong or misleading.
STOP PAYING YOUR MORTGAGE PAYMENTS: Anyone who tells you this is looking to redirect money from those who are seeking to collect your regular monthly payment into their own pockets. While I strongly believe that in securitized loans (96% of all loans) the servicers and others who are collecting from you have no right to do so, the cessation of payment can have grave consequences. Even a lawyer would be reluctant to tell you to do that.
UP FRONT MONEY: The regulators are right. Other than lawyers, giving money to someone without any actual work or results is taking a big risk that you’ll never see your money, the person, or any results. Even with lawyers, the higher the retainer up from the lower your expectations should be. Retainers generally should not exceed $3500 for lawyers, depending upon how they structure the rest of the fees (contingency, monthly, etc.)
DON’T HIRE ANYONE WITHOUT CALLING REFERENCES: Better yet, don’t use anyone who is not referred to you from someone you already know.
OUT OF STATE VENDORS: Other than procuring information and research assistance an out-of state person, lawyer or not, cannot do you much good. Lawyers can only practice in the jurisdiction in which they are licensed. If your property is not located where the lawyer is licensed, then it is probably true that the lawyer will be, at a minimum, restricted in what they can do for you.
MULTISTATE ACTIONS: State law varies considerably from state to state even on some of the simple stuff. I realize that the fraud allegation aspect covers all 50 states and maybe there is something in there than could be sustained as a certified class action or “mass-joinder” action, but I have grave doubts that such actions will produce any real results, other than lulling you into a sense of complacency and allowing your real rights to lapse with the statute of limitations. File your own lawsuit. Allegations that comply with pleading requirements in one state most probably do NOT comply with the pleading requirements of other states. Remedies for the same proof of facts will differ from state to state. I’m inclined to say take a pass on such “opportunities”particularly when there is an “upfront fee”.
SALESMAN: Even lawyers need to be careful on this one. A client should be solicited by the lawyer, not by a salesman. The attorney client relationship can only be formed when the client enters into a direct relationship with the lawyer. BUT there is nothing wrong with paralegals and staff members getting the fact gathering out of the way before you meet with the lawyer. Like a doctor’s office, the repetitive takes are performed by technicians who are trained to get your “vitals.” Interstate sales calls are particularly suspicious to me, and of course sales calls that involve services from non-attorneys should be closely scrutinized.
PRO SE LITIGATION ASSISTANCE: If you are thinking you will represent yourself with the help of a non-lawyer, the results are likely going to be disappointing even in the best of circumstances — but I do know of hundreds of cases where it has worked well. My problem is that this litigation gets more sophisticated each day and harder for non-lawyers to understand the procedures and presentations required in motion hearings, evidentiary hearings and pleadings. I won’t say don’t even do it, but I will say that if you take a single step or make a single decision without at least consulting a licensed attorney in the jurisdiction in which your property is located, you are probably going to make some fatal mistakes.