Debt, Judgments, and Liens

Last week I wrote about debt and AMC’s Lodge 49. A show in which debt is so pervasive it’s another character. This is the flip side of that conversation – the end result of many debts.
I don’t know about you, but sometimes my idea of fun is getting judgment liens paid off.  Yep, that’s right- it’s kind of a cool challenge and can be really satisfying. Taking care of judgment liens has been a satisfying part of being a lawyer for a long time, the letter below is to Attorney Abraham Lincoln about just that.
Last month a client, who was in foreclosure due to unpaid property taxes, found a buyer for her home.  The house needed a lot of work, she was unable to keep up payments on the taxes, and decided to sell.  She had about a half dozen judgment liens that resulted from old unpaid credit card accounts that remained outstanding.  In order to close, I had to track them down and get them settled.
At least there was enough money from the equity in the property to pay them at closing.  If this were a short sale, or if there wasn’t enough equity to get them all paid and still leave her with some cash out of the deal, we probably wouldn’t have bothered. (Then my strategy for her would have been to keep her in the home as long as possible and eventually move when the time came.)
Four out of her six unpaid liens were simple to deal with.  In addition to getting the lien information from the closing attorney’s title search, the original case information is usually available on the court website– www.jud.ct.gov.  I put my client’s name into the search field and found the cases, including the names of the lawyers who initiated each suit against her.  I just had to call them up and make settlement offers.  We averaged just about 50% overall on those.  The lesson here is it is always worth trying to get a discount so that the homeowner can keep as much of the cash out of the closing as possible!
I’m still tracking down the other two liens.  Most of the cases against my client were brought by third party “debt buyers”, companies you’re probably familiar with such as Unifund, Midland, CACH, Portfolio Recovery, Velocity Investments, Cuda & Associates or Lienfactors, etc.  The problem here is that the law firms that get the judgments don’t often continue to service the judgments, especially 5 or more years after the judgment enters, which was the case with my client. I know with a little more effort I’ll find the companies currently handling the judgments and get them settled and paid.  But in the mean time, we have to set aside the full amount of the judgment for these two liens in order to close, and my client won’t get anything that is left over until we know what these companies will accept in settlement.
She had another creditor who obtained a judgment but had not filed a judgment lien.  We still settled that one out because I feared that if we did not, and sold the house, the creditor’s attorney would discover my client disposed of her only asset and it would cause a major problem later.  It hurt because it was the highest balance of any of her outstanding accounts, but the closing attorney and I decided it was the right thing to do.
I regularly recommend selling to people who have equity but cannot afford their homes in the long term.  My experience with the creditors’ bar is that they will always take a settlement offer, no matter whether the account has been reduced to judgment and no matter how old the judgment is.

I Call BS . . . (on everyone, myself very much included)

“I call BS”

The students of the high school in Florida who suffered that mass school shooting earlier this year adopted the battle cry “I call BS” in the face of politicians’ empty promises to stop gun violence and to stop taking money from the gun industry.  If anyone dared tell the students they would work to make a difference and acted in a way that said they did not intend to, they called out the BS.

Good for them.  Because we are too nice and we don’t call out each other’s BS enough.  And because of that many of us never get out of our own way.

We all do it—we all have some BS we are hiding behind.

“I want to lose weight.”

“I know I should exercise more.”

“I have no money.”

All true statements for many of us.

But I call BS.

If you want something, work for it. If you know exercising is good for you and you don’t do it, then start.  You say you have no money, but do you really keep track of what you spend your money on?

I don’t call you out on enough of your BS.  I hear you say you want things but you don’t do what you have to do to have those things.  Please just be honest about WHAT YOU WANT MORE than the things you say you want.

If you want to lose weight, but you love chocolate chip cookies, and you keep eating the chocolate chip cookies, then you want the cookies more than you want to lose weight.  So don’t BS me about wanting to lose weight.

If you know you should exercise more but go home at night, eat dinner and then flop down on the couch and turn on the TV, then you want to watch TV more than you want to exercise.  So don’t BS me about not having the time or not being “able” to exercise.

You say you have no money but you stop to buy a coffee every day and buy your lunch at work and go shopping for clothes a couple of times per month or lend friends and family members the money you do have.  So don’t tell me you don’t have money—that stuff adds up.

I sound really harsh here because I have been spouting my own BS for a couple of years—I say that I want to help more and more people and have a large law firm but I haven’t done the work it takes to get more clients.  I’ve been BS-ing myself, my husband, my staff and even the homeowners out there who can’t find their way to me because I haven’t done what I need to do for them to know I’m right here, ready and able to help.

That BS stops now.  No more pretending to want something but then not taking the steps to have what I want.  No more saying one thing and doing another.  I invite you to call me out if you hear BS from me.

You ready to join me in a BS-free life?

99 Homes

A week or so back, I was at a conference table with another lawyer and a client. The subject was, of course, debt and a pending foreclosure. I’d known the attorney for some time, always thought of him as a sort of analytic, ‘just the facts, ma’am’ kind of guy.

So, he shocked me when he, emotionally, started talking about the movie 99 Homes, several years old now, but … well, here’s what I wrote about it after it came out:

99 Homes is a kick in the stomach. It’s visceral, it’s brutal.

It sarahblogbegins with a court hearing in Orlando, Florida. A twenty second hearing during which a character, alone before a judge in a chaotic courtroom is told his paperwork is not in order and even if it was it’s too late and he will be evicted by the bank in the morning. Quick, devastatingly direct.

The subsequent eviction scene was tense and just heart-ripping. It was hard to watch.

Something really hit me in the brief moments before the sheriffs come –  it’s a quick, easy to overlook shot, though that it’s repeated later in the movie, a few times actually, albeit in different forms.

This is it: the homeowner’s sitting at a kitchen table buried in paperwork. He’s frantically burrowing through it while calling attorneys on his cell phone. It’s crystal clear he’s ignored dozens – at least – notices from the bank, court, and the sheriff’s office.

Later, as the movie takes some dark turns and heads toward the ’99’ homes of the title, it’s obvious that most of the people Michael Shannon (great in this, as in almost everything else) is evicting have done exactly the same thing – they’ve ignored notices, even ones stuck on their front doors by day-glo red tape.

99-homes-18It’s a theme I’ve explored more than a few times and really thought I had a handle on. But seeing it … was hard. There’s a natural reaction to wanting bad news to go away without having to do anything. There’s the depression that hits, the ‘nah, this isn’t really happening’ denial … well, really most of the steps normally associated with the grieving process.

Except here, as so vividly shown in the film, there is no acceptance, just sheriffs and a bank rep at the door to wrest the home away.

I’m still a little rocked by this but I’m pretty sure the next time someone hesitates before hiring me I’ll just tell them to watch 99 Homes and get back to me.

My First Solo

It was twelve years ago today, October 2, 2006, that I went solo.  I actually didn’t have much of a plan. I had obtained a position reviewing documents for large class actions which I could do from home on my computer. That was going to pay enough to pay my bills. That’s as far as I had gotten with my plan.

I had been working in consumer protection for four years, helping all kinds of people out of all kinds of bad deals, protecting them from harassing debt collectors, unwinding their complicated identity theft problems, and recovering money taken by home improvement contractors, car dealers and even dating services.  But even as fulfilling as that was, there was something missing. I didn’t know what, I just knew I needed a change. I didn’t really look around for other jobs, but I found the document review opportunity and thought it would allow me to rethink my path as an attorney.

Within a week or two, my old boss called asking if I was interested in helping all the people that called his firm looking for help defending against credit card and medical collection.  So I shifted from being the lawyer that brought suit to being the lawyer that defended clients in court. And no one else was really doing that with any regularity.

Almost exactly two years later, though, the economy dramatically shifted when the real estate bubble burst and the country went into recession.  The need for lawyers helping homeowners in foreclosure increased dramatically and as I had already handled a few foreclosures for homeowners, I was in position to take on more of these cases.  Now I have the largest foreclosure defense practice in the state.

This did not come easy.  Helping a homeowner save their home from foreclosure is labor-intensive, document and paperwork intensive and takes a lot of time and patience, both on my part and the part of the homeowner.  I have had to hire staff to handle the paperwork, answer the phones and manage the office. This was a scary process- I used to work alone in a spare bedroom, then I rented a small office, but now I need space for four employees, and then some.  This all needs to be paid for. Everyone wonders how I do it: “How do you get paid if your clients can’t pay their mortgage?”

Good question.  Probably the most important lesson I’ve learned from growing this business is to figure out what clients really want.  When you think about it, people pay for the things they want. If they REALLY want that Starbucks coffee, they will have the money to pay for it.  If they REALLY want a Lexus car, they will find a way to pay for it. And if they REALLY want help in court when their home is in foreclosure, they will make sure to pay their lawyer for that help.  

I did assume for a long time that everyone wanted to save their house, or that everyone who called me wanted to pay for legal services.  I’ve been working on how to have the conversation to figure out what people really WANT. I’ve learned it’s OK to not want to keep your house, and it’s OK if people don’t think paying for a lawyer is worth it.  I want to work with the people who REALLY want legal help from me, people who value having a lawyer by their side, a lawyer who will explain the process to them, who will walk them through each step and clarify what is going on in court so they aren’t so confused, don’t feel helpless, and aren’t spending any more sleepless nights over their foreclosure.  

Even better are the clients who know we will solve their legal problem and who want to do better in the future.  People who are motivated to manage their money so they will NEVER be in foreclosure again, and who will have savings and a retirement plan and a future to look forward to.  Because I’ve learned it was never the foreclosure that was the problem, that was just the symptom of many decisions over the years that led to an inability to pay the mortgage.  I can treat the symptoms, but the fulfilling part is working together with clients to cure the underlying problem.

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.

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  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.

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.

YO! Adrian! Here’s Why I’ve Been Posting About a Triathlon

forsarahblogFor about the past week, I’ve been posting on Facebook about the Litchfield Hills Triathlon I ran last Sunday. I wasn’t posting to help psych myself up for a rough, hot, intimidating race (okay, maybe a little), I was hoping to make a point. A strong point about a real problem my clients run into, especially when they are late becoming my client (i.e., have gone it alone through a court hearing or two).

So, here’s the thing: I have a running coach. She outlined a comprehensive, step-by-step program to help get me ready for this race. I considered that vital – anyone who’s ever driven around Litchfield, Connecticut would know why … it’s not call the Litchfield HILLS race for nothing.

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My … edited … training plan

I followed the plan religiously … until I didn’t. Things got in the way. I am not a professional triathlete, I will never get any king of sponsorship to pay for shoes, clothing, coaching, all that stuff. In short, I’m a business owner who runs (swims and bikes too, I suppose) to stay in shape and, most importantly, stay mentally sharp.

So, things (life) got in the way of our perfect plan. A workout skipped, a mile or two skimped on, you know how it goes.

At no time during my training, however, did I ever run the risk of being kept from running the race. It wasn’t like I had to check in Sunday morning with my training program signed off on and in perfect order in order to race. No race clerk to scan through and say, “It’s all in order, go get in line, hand this to the starter and you’re good to go.”

And. it’s certainly not like, in my case, there was someone to say, “Oh, hey Sarah, you missed a timed workout on June 8th, and this long run on the 20th … sorry, you can’t race. You’re out … it just wouldn’t be fair to the racers who did the work.”

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     My plan for clients

No, that would have been ridiculous, anyone who pays the race fee and wants to abuse their body for a few hours can start the race. Anyone who has prepared at least somewhat has a chance to at least finish.

The ‘Sorry, you can’t race scenario” is the foreclosure process. I give my clients a list of things they have to do. Same as my coach gave me. The difference is, however, that if they skip an item or try to get by with a half measure, they know they stand a good chance of defaulting – they will get kicked out of the race.

This kind of default means losing a home. It’s as simple as that.

For the people who are debating getting an attorney because they think they’ve got a decent grasp on what should be on the list and how and when to get into the race … well, usually I see those people at some point after it’s started and why I can usually help, it’s like running the race with a cramping hamstring – it can go a number of ways, only one is good.

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.

About The Big Short (Part One)

TheBigShortCSHeaderI took a bunch of clients to see The Big Short early last month. Great group of people, great time, great movie. Smart, funny, insightful, wicked, insidious, it did as good a job as anything in any medium in explaining the housing bubble and ensuing chaos.

In the long run, though, The Big Short was ultimately frustrating and infuriating. In so entertainingly showing us the how and whys of what happened, the utter lack of a ‘happy’ ending was – while realistic – shattering. At least to me, sitting in a theater among those … well, let me put it this way – a few people got rich, millions lost their homes, the guys that perpetuated it all were bailed out and moved on to new investments and new bonuses. Fairness, never mind justice, was not part of the equation.

10649966_1086276854757139_7594272388235192014_nI was sitting with a few of the still millions of Americans dealing with the continuing ramifications of, according to the movie (very persuasively), an enormous scam. As the credits rolled we were left with Steve Carell’s scathing indictment of Wall Street and Ryan Gosling’s slick, sarcastic denouement … and nothing else.

No solutions, no ‘at least the bad guys were held accountable,’ no ‘things changed and this can never happen again…’, nothing.

Still, I think it’s important – for everyone – to know what happened, and how it happened. Then, to file it away, remember but bury the righteous indignation, anger, frustration because – as The Big Short so clearly shows us – it has no impact whatever on . . .anything.

That;s not quite true, all that does have an impact in foreclosure defense – it gets in the way. My clients and I are not going to undo anything coming out of the greatest, most devastating financial meltdowns of our lifetimes in a Connecticut court, regardless of our anger.

maxresdefaultAll we can – and will – do is use everything available under the law to do everything possible to get the best solution. We’ll leave the angst and revenge fantasies to Hollywood, I understand they have several movies coming out in the next few months where Wall Street get theirs.

I plan to be there with more clients when George Clooney and Julia Roberts take down the Street. It might not mean much for my practice, but it will feel good.