Want to sue your lender for some sort of foreclosure- or mortgage-related fraud? Join the club – literally. A Florida lawyer who is targeting lenders on behalf of struggling homeowners will be happy to file several “innovative legal actions” on your behalf, but it costs $5,000 to join the lawsuit and the odds of winning a quick settlement are “a long shot”[1]. Many legal regulators are warning that this type of legal action – particularly if plaintiffs are solicited via cold calling, unapproved mail pieces and commissioned workers – are “just the latest twist on mortgage relief schemes” and could violate Florida bar rules.
The strategy is fairly simple: if your lender will not cooperate with you on a loan modification, file a “mass joinder” lawsuit along with thousands of others in an effort to make the banks comply by threat of volume. So far, while it works in theory, none of the lawsuits that have been filed have gone to trial or been settled.
On one hand, it seems reasonable that, as the lawyers put it, “the legal system is available but not free.” However, it is illegal in many states for individuals or law firms to charge up-front fees to homeowners seeking mortgage-related assistance[2]. Should these “mass joinder” cases be an exception to this rule, or is this just another scam?
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[1] http://www.tampabay.com/news/business/law-firms-strategies-in-mortgage-holders-struggles-provoke-ethics-issues/1182264
[2] http://www.dailyherald.com/article/20110715/entlife/707159960/
Once you start making exceptions to rules, you soon have rules that apply to a smaller percentage of the original class. Eventually, the exceptions can make the original rule obsolete, or a massive distortion of the original intent. Jim Myers
Oh no! More competition for use pre-foreclosure house buyers LOL. Just kidding. If its legal and it keeps people in their houses – more power to them.
This isn’t a mortgage modification company, it’s a lawfirm and they are suing! I don’t think ‘joinder’ lawsuits will net much in the way of mortgage relief or settlement money for the plaintiffs, however. Just like class action lawsuits, the injured parties don’t get much. But, never confuse actual lawsuits of any sort with mortgage relief companies or programs. We all have a constitutional right to petition our government for redress of wrongs, and we have ALL been wronged! Even those few who are not underwater or behind in mortgage payments have had a valuable asset, our home, devalued to a point that approaches the ridiculous. We ought ALL to be suing the banks.
so should the name of this attorney be known so one can avoid the silver tongued dialogue and save the 5k in frustration and potential postal thoughts.. no one likes being scammed.. they should all be listed just like the robo-signers..
We did list the sources for this article, which name the attorneys. However, while the story has merit and investors need to be aware of the possibility that this could be a scam, we were not comfortable calling out individuals who have had nothing proven against them and who have, as yet, not been convicted or even indicted as committing any wrongdoing. ~Carole
It is a real law firm, BUT the interests they represent seem questionable. The lawyer involved seems to be in the home buying business, that, in theory, is a contrdiction to protecting the home owner.
Its no different than an investor trying to do a short sale, unsuccessfuly. Then they try to actually buy the note from the bank for their own benefit.
There’s a company in California doing webinars to get people to join similar type lawsuits.
I’d wounder how any body could represent the homeowner’s individual interest in a massive lawsuit; maybe it’s not impossible, but highly unlikely.