Do foreclosure mill lawyers have a real duty of performing due diligence before they send, file or argue anything in court?

Jul 13, 2022

The plain answer is no. I have tried a number of times to hold foreclosure mills accountable. But unless I was able to allege and use exhibits to support the allegations that the lawyer knew (i.e. personal knowledge) that he/she had no client, that there was no claim, that the claims were a fraud upon the court, etc., the lawyer was always held to be protected by litigation immunity.

As far as I have been able to determine, the duty of due diligence is either ill-defined or not defined.

Basically, a lawyer can say anything unless he personally knows that it is untrue. The lawyer in that context is seen as merely the mouthpiece for his lying client. But somebody on Wall Street figured out that the lawyer doesn’t even need to have a client.

As long as he/she thinks (or has reason to think or no reason to not think) there is a client and he does not personally know that there is no client, then he is allowed to speak as though the client existed and as though the assertions are true.

Once upon a time, this was regulated by norms and traditions. Lawyers would not stretch the truth that way for one simple reason — they would need to appear in front of the same judge at a later time. If the judge did not repose trust in the sincerity and credibility of the lawyer, the lawyer would be disbelieved. This has fallen apart but only in foreclosure litigation where the current judicial bias causes most courts to wink and nod.

The solution is political. First, shine a spotlight in a credible way with at least some members of the press following your accusations. Then build it up with evidence — quotes from transcripts and orders.

Believe me, nobody is comfortable with the current situation. But they do believe that there is no harm. And that is because homeowners keep admitting to and referring to a loan and admitting to and referencing a third party as a servicer. Once you admit that you have an unpaid debt that is in default, you can’t get relief in normal circumstances by technical deficiencies in the paperwork. If it was otherwise, that would increase the risk to all creditors of every type which is the exact opposite of doctrine and law for centuries.