Picturing Foreclosure

Who do you picture when you hear the word Foreclosure?  Do you picture people sitting around piles of cash they have saved up because they haven’t paid their mortgage? Do you picture people going on vacation on the money they saved by not paying their mortgage?  Do you think they are sleeping soundly on a bed of sweet-smelling flowers and wake up to rainbows?

Maybe that’s what you picture, since we have been trained, as good Americans, to work hard and pay our bills.  So if someone isn’t paying their bills they must really be enjoying all the “extra” money they have hanging around.  If we all believe that paying your bills = good and not paying bills = bad, then of course you think there is some benefit to the person not paying their bills, that they have “gotten away with something,” and are getting rich in the process.

After years and years of working with people in debt, I can tell you not being able to pay bills comes with nothing but gray hair and sleepless nights.

I’ve been trying to figure out who is more likely to be in foreclosure so that I can “target” my advertising better.  I want to focus my advertising time, energy and money on that group. The problem is, there is no ONE group more likely to be in foreclosure.  I have helped doctors, lawyers, real estate agents, mortgage brokers, landscapers, painters, contractors, nurses, teachers, retirees, the disabled–you name it—who have all fallen on hard (or even harder) times.  The only common denominator is owning a home. Whether your mortgage payment is $3000 per month or $900 per month, your home is your castle.  

And hardship doesn’t discriminate.  

I have a list a mile long of the terrible things that happened to my clients before they fell behind on their bills, all which fall under the main categories of unemployment, divorce, disability or injury, having to care for someone sick, or death of a spouse or family member.  That stuff can happen to anyone.

Believe me no one who isn’t paying their mortgage fat, happy and sitting on a pile of cash.  They come to my office crying, depressed, sleep deprived and arguing with their spouse because of the stress that reduced household income and inability to pay bills causes.  Don’t think for a minute that the shame and embarrassment is any less for the house painter than the doctor, or that it’s any easier for the real estate agent than the nurse to reach out for help.

I was talking to a friend today who just went through a major health crisis, which got worse while he was in denial about the seriousness of his condition before finally going to his doctor.  His takeaway is that he feels we should all be talking about our issues and how they affect us and make us feel. He specifically said he’s seeing a counselor to get over the stress he experienced while getting urgent medical treatment, and he thinks the more we all discuss that the better we will all be, and that we will be more likely to reach out for help when we need it sooner.

I couldn’t agree more.  I’ve been saying that for years, I even had the Got Debt? logo imprinted on my business cards for years because when I showed it to people it would make them smile and more likely to discuss money problems.  In my experience, the sooner someone reaches out for help with their financial issues the more options they have. Nine times out of ten I’m told by clients speaking to me has helped them sleep much better immediately.  At the very least, reaching out for help sooner can make you feel like you’re sleeping on a bed of flowers.

A Day in Court

I was in court a few days ago, a woman was there, representing herself, trying to tell the court that she was about to sell her house and the foreclosure ‘could stop now.’ She was too late. She tried explaining that the bank told her she’d be fine and needn’t worry about what was going on in court as long as the house was about to be sold. It didn’t matter, she was too late . . . by about a week.

More:

A different take in foreclosure court: usually the judge takes cases where attorneys have entered appearances – ostensibly to try and curb expenses, (who wants to pay a lawyer to sit in court all morning?) – but today, he decided to take homeowners representing themselves first – the better so they don’t miss work.

A lot of homeowners representing themselves don’t show up, but they did today.  So, I sat through foreclosure story after foreclosure story and a lot of pretty solid explanations why homes shouldn’t be foreclosed on.

o-GAME-OF-THRONES-TYRION-facebook
  It really is no fun to be in court by yourself….

One man explained he fell behind after his house sustained storm damage. His insurance company assured him he would be reimbursed in full for the repairs. Two checks came and he paid the contractors but then, for some reason, the bank held the last $19,000 check.

He is in the beginning of a foreclosure while still trying to work things out with the bank. That’s it, he, by himself, is working with his bank, only, to get money released and start to ‘take care of the mess.’

The judge set a date and if the homeowner doesn’t resolve the problem in time the bank will own his house. The poor guy has the attitude of someone who just can’t believe that the problem won’t get resolved, that the bank won’t do the right thing. Eventually.

Other families came before the judge with different stories based on the same theme – the bank said ‘x’ and they’ll be following up … soon.

All of them now have foreclosure dates.

I wrote a few weeks ago about where the banks’ interest lay. To tersely sum up that post – the banks do not share many interests with regular people.

The general rule is once you don’t feel your bank is helping you or listening to you, you need to stop seeking help and advice from them.  I mean, if if you were arrested, would you ask the cops for help?  I think we have been trained from all the law shows on TV to know there’s an adversarial relationship between the police and someone who has been arrested (even if the person is innocent).  What TV hasn’t taught us – because how un-sexy would a show about foreclosure court be – is that the banks and mortgage lenders are the cops and homeowners have the right to remain silent and have the right to seek the advice of an attorney.  People who are arrested know that without an attorney they are likely to lose some liberties- likely to spend time in jail.  People in foreclosure are also at risk of losing similar liberties- like the right to own their homes- if they don’t seek out the advice of an attorney.

So please, don’t be standing in front of a judge before it occurs to you to check with a lawyer.

Lawyers, Math, and Why You Can’t Buy A Third-Pound Burger at A&W.

This week’s blog was co-authored with Jenny Bradley, a Family Law Mediation Attorney in the Research Triangle in North Carolina.  

In a perfect world, any half-way serious review of fast food burgers from around the country would rank the A&W Third-Pound burger right up there with In N’ Out and Shake Shack. By all reports the Third-Pound was a burger among burgers. Fresh, grilled, delicious, and it was priced below McDonald’s latest, and biggest seller, the ubiquitous Quarter Pounder (0r, as Vincent Vega would say, the ‘Royale with cheese’).

We’d go for one now, it sounds that good. Except we can’t – and that has nothing to do with the fact there are a whole lot fewer A&W’s around these days than in the early ‘80’s.

It has everything to do with the fact the Third-Pound was a miserable failure. Sure, it was big, sure it was fresh and delicious, sure it was cheaper than a Quarter Pounder. None of that mattered, what mattered was some 40% of the hamburger eating public believed that the Third-Pounder was smaller than the Quarter Pounder. Because 4 is greater than 3.

This happened in the mid-Eighties. It’s hardly a stretch to say that America’s grasp of mathematics has not improved since the A&W fiasco.

That’s a problem.

We are both lawyers, albeit with very different focuses. We both need math – we deal with a variety of financial issues, sometimes complex. But we deal with it. Even though we have the Dr. McCoy excuse – “Dammit, Jim, I’m a lawyer not a mathematician.”

While true, when confronted with a knotty financial issue that pops up during a foreclosure or compiling a divorcing couple’s assets, we do the math. It’s never as hard as it seems before we start.

Getting clients to do the math, though is sometimes daunting. We need forms filled out and basic calculations made before we can do much. But, it’s math, and the forms look imposing, and it’s personal and in many ways it represents a finality – of a marriage, of a home. So, no one’s rushing to get it done.

That’s all fine and, somewhat, to be expected. We cajole and remind and bug and get it done.

Our ‘Third-Pound’ scenario, though, pops up when we’re asked ‘what are the odds’. “What are the odds I keep the house?” “If I take it to court, what are the odds …?” and every possible variation and scenario.

We’ve been practicing long enough and intensively enough in our respective areas of concentration to be able to answer this and be pretty damn close. If we answered. But, we are loathe to do so. Because if it’s true that the average American is not good with math, then it’s even more true that they are really bad with odds.

Not sure about this? Well, poll your friends after the local weather guy predicts a 70% chance of rain and nothing beside a few black clouds roll overhead. You’ll find that a more than a few will complain about the ‘blown’ forecast. In any group of friends and acquaintances, by the way, there is always at least one person who will say, “Ha! They always get it the forecast wrong!”

The weatherperson didn’t get it wrong, of course. Because there was a 30% chance of it not raining. Not insignificant. Yet most people never heard 70%, they heard ‘It will rain.’ Because 70 is closer to 100 than 30 is.

As most legal matters are just a little bit more important than a rain shower, you could see where giving odds could be problematic.

Then, there’s the flip side of this. The Patriots just won a Super Bowl after being down 25 points in the third quarter. At the time, the odds (they were calculated online as the game went on by various sites) gave them a .4% chance of winning. When they were down 28-20 with four minutes left, they had an 8% chance of winning.

But they won. Coming back from a deficit like that hadn’t happened in 50 previous Super Bowls. Statistics tell us it shouldn’t happen again for at least another 50. Though statistics also tell us it could happen again next year, then not repeat for another 100 or more Super Bowls.

Rare is rare, but there’s no telling when it might pop up.

Which leads to another math problem for lawyers. Instead of the Third-Pound Dilemma, it’s the ‘So you’re telling me there’s a chance dilemma’, watch:

Put these two dilemmas together and we think you’ll understand why we are really, really careful answering ‘what are the odds’ questions.

Roger Ebert’s ‘Lawyer in a Movie Rule’ and My Practice

The late great Roger Ebert came up with a set of movies rules for movie viewing gleaned 20130405_roger_ebert_crop_91from his decades of amazing reviews. Things like ‘the guy in a war movie who shows everyone the picture of his sweetheart will die by the end’. Or ‘Ali MacGraw Disease’: A movie illness in which the only symptom is that the sufferer grows more beautiful as death approaches. 

Another is ‘The Lawyer With One Case Scenario.’ That’s defined as: in nearly all legal dramas, the lawyer’s involved in only one case – the case the movie is about. They are never distracted by other cases, clients, or causes.

This is certainly true for every legal drama that doesn’t involve a down-on-his-luck lawyer grasping onto one case as a lifeline. Paul Newman in The Verdict and Jimmy Stewart in Anatomy of a Murder come to mind.

For every other movie (and most TV shows, for that matter) it really is the one case goliath-600x400scenario. The one case that is really cool (or they wouldn’t be making a movie about it) and most certainly takes laser focus despite all the really neat stuff screenwriters come up with the throw in the way. Most of which have nothing to do with the with the law. (For an example of creative, if not ridiculous, ‘Hollywood-only lawyer faced with multiple obstacles while pursuing a case’, check out Amazon Prime’s Goliath.)

The typical movie lawyer, say Billy Bob Thornton, shows up and dazzles the court with legal acumen seemingly off the top of his head, while, miraculously, the lights in his office stay on, a paralegal/secretary/amusing investigator work 12 hours a day for free. Because, they believe in the case as much as the star, which is a really lucky thing as, let’s face it, the movie lawyer has no visible means of income. Needless to say, none of these legal thrillers ever starts with a client walking into the attorney’s office with a million-dollar retainer.

Half a century of ‘lawyer movies’ have had to have an effect on how people, i.e., real clients, see lawyers and law firms. Which is, on occasion, a problem.

download-1A few weeks ago I met with a prospective client. Very nice guy, the meeting was highly productive, I knew I could help him. So did he. He was all set to sign a retainer agreement when he stopped and said, “Just promise me you’ll be the only one handling my case. I only want to work with you.”

Well, a long line of movie lawyers would have agreed immediately. Everyone from Spencer Tracy to Debra Winger, George Clooney, Matthew McConaughey, and, yes, Billy Bob Thornton, and everyone in between would have taken the retainer. Because, in movie law land, there are no teams, no need to pay bills, and the only legal work a case ever needs is when the lawyer shows up in court. (By the way, movie lawyers are almost always late to court, are usually seen running down the aisle as the judge takes a seat.)

In real like, it’s about a team, it’s about research or motions or briefs getting done while somebody else is stuck in the courthouse, it’s about someone painstakingly filling out financial disclosure forms and checking scheduling and …. you get the point.

I love movies, but I live and practice in the real world.

Flounder’s Car and No Worry Foreclosure Solutions

flounderAn attorney and a real estate guy were just arrested in Connecticut for allegedly running a scam on people facing foreclosure. They’re accused of something that looks remarkably like a variation on the Detroit scam I wrote about awhile back.

According to the Connecticut Law Journal “[they] would offer to purchase their homes and pay off their mortgages. The distressed homeowners agreed to sign various documents, including quitclaim deeds, indemnification agreements, management agreements and third-party authorization letters that [they] presented to them with the promise that they would be able to walk away from their homes debt-free.”

The homeowners were told to ignore any future communications from their banks, most, if not all of them, moved out. After they moved out, the alleged scammers then rented out the homes and pocketed the rent. No money was ever forwarded to either the real owners or the banks. It’s assumed that this went on until the banks foreclosed and the renters received eviction notices.

This is disturbing and, unfortunately, not uncommon. Distressed homeowners are well named – aside serious health issues there’s few things more stressful than facing losing one’s home. Distressed homeowners are targets for the smart but unscrupulous. Theses predators invent fantastical solutions that sound dead-on doable. Real.

So, here’s the thing, and it’s simple – if someone says they’ll handle everything, deal with the bank for you, take all the stress off, allow you to ignore future notices and all those pesky court dates they are ripping you off.

Get a lawyer, go to court, handle it directly, there is no magic to it. Real Estate Maven, Lawyer, Doctor, your favorite brother-in-law, anyone who tells you they have the solution and you can ignore … everything … is not there to help.

Go ahead and deal with these people and you’ll end up like Flounder from Animal House. Remember, he loans the guys his brother’s car for the infamous road trip and it comes back so trashed it’s unrecognizable. The response from Otter? To paraphase, “Face it, you screwed up, you trusted us.”

The Myth of the Free House

download (9)About a month or so ago, news came down about a California Appeals Court decision where the court recognized that a mortgage company/bank suing for foreclosure could not produce the note and had used robo-signing on documents.

The court lambasted the bank and awarded considerable damages to the former homeowners – the house had been foreclosed on years earlier and sold.

The decision set off a barrage of Internet invective and off the wall speculation – i.e., use this case as a template, end up with a free house.

There’s a lot wrong with this. First, maybe foremost, the decision in this case is based solely on on the facts of the case. It’s not your Starbucks card, it’s not transferable. Second, this decision represents years of litigation and immense legal fees.

Then there’s the free house. You know, scare off thetumblr_inline_nuhalibqIN1sfo6p3_540 mortgage company, make them so flummoxed by the legal brilliance you’ve taken from your careful reading of the California decision and stop them in their tracks.

Perfect, right? Well, perfect only in the sense that you and your family and your descendants want to live in the house forever. Because ,that’s what you’re signing up for.

I’ve heard of someone in Central Connecticut who has, indeed, pulled this off. Has so intimidated the mortgage company and mortgage company lawyers that they defaulted on his case and walked away.

He got his house. In name only. What he doesn’t have and never will have is a clear title. He does not pay a mortgage, he does pay property taxes. He cannot do any of the things people with clear title can do – sell, refinance, nothing.

The free house isn’t really free. It’s a ticking time bomb and it’s an anchor … unless they are willing to walk away from it. Then it’s the neighbors’ problem.

2015: The Year in Themes

It’s been quite a year, in court, out of court, blogging, talking, consulting. Since I started putting my thoughts down early in the year a few themes have emerged, themes I’m sure I’ll continue to follow into 2016.

Looking forward to 2016 and many more posts. Happy New Year, and thanks for being a reader.

A Day in Court

A different take in foreclosure court: usually the judge takes cases where attorneys have entered appearances – ostensibly to try and curb expenses, (who wants to pay a lawyer to sit in court all morning?) – but today, he decided to take homeowners representing themselves first – the better so they don’t miss work.

A lot of homeowners representing themselves don’t show up, but they did today.  So, I sat through foreclosure story after foreclosure story and a lot of pretty solid explanations why homes shouldn’t be foreclosed on.

o-GAME-OF-THRONES-TYRION-facebook
                                                It really is no fun to be in court by yourself….

One man explained he fell behind after his house sustained storm damage. His insurance company assured him he would be reimbursed in full for the repairs. Two checks came and he paid the contractors but then, for some reason, the bank held the last $19,000 check.

He is in the beginning of a foreclosure while still trying to work things out with the bank. That’s it, he, by himself, is working with his bank, only, to get money released and start to ‘take care of the mess.’

The judge set a date and if the homeowner doesn’t resolve the problem in time the bank will own his house. The poor guy has the attitude of someone who just can’t believe that the problem won’t get resolved, that the bank won’t do the right thing. Eventually.

Other families came before the judge with different stories based on the same theme – the bank said ‘x’ and they’ll be following up … soon.

All of them now have foreclosure dates.

I wrote a few weeks ago about where the banks’ interest lay. To tersely sum up that post – the banks do not share many interests with regular people.

The general rule is once you don’t feel your bank is helping you or listening to you, you need to stop seeking help and advice from them.  I mean, if if you were arrested, would you ask the cops for help?  I think we have been trained from all the law shows on TV to know there’s an adversarial relationship between the police and someone who has been arrested (even if the person is innocent).  What TV hasn’t taught us – because how un-sexy would a show about foreclosure court be – is that the banks and mortgage lenders are the cops and homeowners have the right to remain silent and have the right to seek the advice of an attorney.  People who are arrested know that without an attorney they are likely to lose some liberties- likely to spend time in jail.  People in foreclosure are also at risk of losing similar liberties- like the right to own their homes- if they don’t seek out the advice of an attorney.

So please, don’t be standing in front of a judge before it occurs to you to check with a lawyer.

Lawyers, Doctors, Car Mechanics, and Authority

Lawyers are heavily regulated.  I know it may not seem that way to the public, but we have to follow a lot of rules.  Many of those rules are designed to protect the public.  “Ambulance chasing” has been, well, chased off for the most part, and lawyers’ contacts with potential clients are heavily regulated.  For example, if I learn of a homeowner who might need help fending off a foreclosure, I can’t call that homeowner (or have anyone else call them for me); and if I choose to contact that peter-steiner-bernard-is-our-sous-mechanic-new-yorker-cartoonperson via letter, I have to stamp ADVERTISING MATERIAL in big red letters on the envelope and the letter.  That’s because an average member of the public might think they HAVE to respond to a letter they receive from a lawyer, but this ‘warning’ makes it clear that it is a solicitation.

Why would a homeowner, or anyone else for that matter, think they have to respond because the letter is from a lawyer? 

Because lawyers, doctors, and car mechanics know things. dihydrogen-monoxideMore importantly, they know how things work. Inside knowledge. That instills authority whether it is warranted or not.

So when your mechanic tells you that you sheared the transmorgerfer gears in the sprocaxle – and he does it in German, Swedish, and Japanese – you nod along and write a check. When your doctor tells you that after running four miles you need a dose of Dihydrogen oxide, you nod and write her a check.

And in the law? Well, it goes like this:

 

 

Judge-Chamberlain-Haller-from-My-Cousin-VinnyLast summer I was in court when a guy appeared by himself before a judge who was subbing in for the day. This happens, foreclosure, however, is … somewhat arcane and most definitely not in the usual purview of a covering judge.

The homeowner, of course, had no idea he had a sub and pretty much cowered – hey, it’s lonely out there when you’ve done it a thousand times, it has to be close to terrifying doing it for the first time, and with your house on the line.

The judge was not gentle. He pronounced a date by which time the homeowner had to sell, pay all the past due payments or refinance the house. Period. The guy  explained, quite nicely, that he had a good job (with a state agency) and was there anything he could do?

No, the judge entered judgment and then said, “Sir, you better start packing.”

A few days later the homeowner got to me,  6 weeks later, he was on a payment plan with his mortgage lender.He’s still in his home. Had he taken the judge’s word – as most would, a Judge is a pretty intimidating authority figure – he would have bagged it and left his home and who knows.

I wish I could stamp “I’M ON YOUR SIDE” or “AN ADVOCATE FOR YOU” in red caps on the letters I send out to potential clients.  But I respect the rules and the reasons for them so I’m thrilled when someone in need sees past the big red letters and calls and asks for help.

Advice from Strangers . . .

leo-cullum-i-was-just-going-to-say-well-i-don-t-make-the-rules-but-of-course-new-yorker-cartoonI recently met with a woman  who told me she hasn’t been sleeping.

She’s been having nightmares where people from her mortgage company come to her house and move her stuff out.  She calls out “Stop” but either no sound comes out, or they can’t hear her, or they ignore her.

I’m going to go out on a limb and guess that she’s having these dreams because reps from her mortgage lender have been calling because she’s a few months behind.

Which . . ., well, okay, they’re just trying to get a payment. Fine, understandable. Everyone wants to get paid. If it stopped at ‘when can we expect your payment?‘ it would be acceptable. In moderation.

But they don’t, they try to induce any kind of payment they can get out of her by advising that if they move to foreclose she’ll have to move out of her house in 30 to 60 days. That’s basically it – ‘Okay, don’t pay, we file, you’re out of the house before the the new season of Homeland starts.’

There’s pretty much zero truth behind that threat as it applies to foreclosures in Connecticut.  Since most every homeowner behind on the mortgage is stressed out, the bank’s threat/misrepresentation is very powerful.  Nightmare inducing, in fact.

There may well come a time in any unresolved foreclosure when the homeowner is 30-60 days from having to vacate the property.  That time is nowhere near being two months behind on payments.

One of the most satisfying parts about my job is counseling homeowners on just how long a foreclosure can take.  I get to tell them about due process and how long they still have to live in their homes. It’s always months and months longer than they think before meeting with me.

Then I get to hear  how well they are sleeping.

That’s me, Sarah Poriss, Attorney at Law & Sleep Specialist.