[Note: We don’t handle foreclosure or consumer issues unless part of national class action. That means we can’t represent you on an individual foreclosure matter but we do understand the issues and have suggestions to offer… suggestions that go well beyond the general fluff pieces you often read that offer such advice as “gather all your paperwork…”
We are publishing this piece as general information. The laws in every state are different, especially when it comes to residential foreclosures. We urge you to contact a local lawyer for help. Knowing that finding someone good is often a challenge, especially when funds are tight, we offer some specific suggestions below.
Thank you and God Bless.]
Before we get to the specific guerrilla tactics, there are some general things you should consider. Much of this is what you typically find on the Internet.
1. Find a Good Lawyer
Most foreclosure defense lawyers are glorified bankruptcy lawyers. That is not an indictment of the bankruptcy bar or the lawyers that practice foreclosure defense. There is a time and place for bankruptcy. We often work closely with bankruptcy lawyers and sometimes they are the only folks who can save your home.
If you find a foreclosure defense lawyer that immediately recommends bankruptcy, get a second opinion. Maybe bankruptcy really is for you. Often is not, however.
We see lawyers all the time that advertise “foreclosure defense.” If when you visit their website it is obvious that they are bankruptcy lawyers, be a little cautious.
2. Finding a Good Lawyer When You Are Broke
If you are in foreclosure, chances are that you are having financial problems. There are non- payment defaults, but those are rare. Finding $250 or more per hour to hire an attorney when you are having money problems is often impossible. So what can you do?
Try your local bar association. Some have lawyers that offer services on a sliding fee scale. Others have “pro bono” panels, lawyers that offer to do cases free of charge. (Pro bono is short for “pro bono public” or “for the good of the people”)
We do our fair share of pro bono work but only through an organization. Most other lawyers that do pro bono work are the same way. This means that cold calling a lawyer and asking her to work for free probably isn’t a winning strategy. But if the contact is made through a bar association or community legal services provider, you may be pleasantly surprised.
Here is another tip. Even if your local bar association doesn’t have a “pro bono” panel, they can steer you to local legal action or legal aid groups. If you are lucky enough to have a law school nearby, they often have a trial advocacy clinic to help budding lawyers learn the law. These students are usually supervised by experienced professionals and professors.
Still not finding help? Unfortunately, we are not surprised. The lawyers that volunteer their services are swamped. We get at least 10 calls per day. Unfortunately, we can only help a few people each year and those come through a legal services organization.
So now what? Keep reading! The guerilla tactics below are just for you.
3. Keep Your Faith and Pray
I know what you are thinking. I came to this article hoping to find guerrilla tactics to help me and my family remain in our home and this guy is telling me to pray. But it’s true.
Whatever your religion, you need to remain focused, look to a higher power and keep your faith. Praying for the first time on the day of the sheriff’s sale isn’t the ideal time to start, either. If you pray every day and keep your faith, good things should happen.
If nothing else, keeping your faith will prevent you from becoming bitter. Although your bitterness may be justified, no one is going to want to help you if you come across that way.
4. GUERRILLA TACTIC – The Best Defense is a Good Offense
When the bank initiates a foreclosure against you, they are in the driver’s seat. The only thing you can do is defend. It is even worse in the handful of states that are “non-judicial foreclosure” states. In those places, the bank doesn’t need the court’s permission to take your home. Instead, the burden is on you to object and ask the court to step in.
So how do you flip things around? File a counterclaim against the bank. Suing a bank isn’t easy. It is like the Biblical battle of David versus Goliath. Except instead of Goliath being a big, stupid brute, today’s Goliath is a sharp tongued bank lawyer wearing a $3000 suit and backed by an army of associates.
Banks have lots of money – our money – and they use that money to hire the finest lawyers. The typical tactic is to wear you down, outspend you and pick away until you go broke or just walk away.
By suing your bank, however, several things happen.
First, your bank now has skin in the game. In a foreclosure case, if the bank loses, it really doesn’t lose. Almost every residential mortgage is backed by Fannie Mae, Freddie Mac, the FHA, VA, private mortgage insurance, etc. The bank doesn’t lose when the feds honor the loan guarantee.
If you sue the bank, however, and the bank loses it has to pay you money and there typically is no insurance to cover bankers for their own reckless and bad behavior.
Another huge advantage is that in most states if you use sue your bank you can demand a jury trial. A foreclosure in most states is considered “equitable” relief. And that means no jury trial. As sympathetic as judges may be, they have to follow the law. Suing the bank, however, can mean a right to a jury.
When you sue a bank, your claims against the bank can typically be heard by a jury of your peers. Since 2008, banks don’t do well in front of juries. If you think you are alone in how you were mistreated by a bank, you are not. Most jurors have a friends, co-workers or family members who were similarly mistreated by a bank.
The bank’s fear of juries is why banks spend so much time and money fighting procedural battles to avoid having a jury trial. Without a counterclaim, banks have a much better chance of winning.
There is one caveat to this general advice, make sure your counterclaim isn’t frivolous. Courts have mandates to toss frivolous claims and claims filed simply to delay. While theoretically a court could sanction an unrepresented homeowner for filing a frivolous counterclaim, chances are they won’t. Why chance it however.
So how do you file a counterclaim against a bank? READ and RESEARCH. Read, read and read. Most courthouses (colleges too) have law libraries where you can do your own computer research and figure out what works and doesn’t work in your jurisdiction. On the Internet, you only read about the success stories. For proper research, however, you need access to specialty legal resources such as Westlaw or Lexis. It can be time consuming but isn’t your home worth fighting for?
And remember when you file your counterclaim, in most states you must specifically demand a jury trial. If you don’t, then it may be too late to ask later. (Some states charge a small fee as well. If so, make sure it is paid timely.)
Court clerks can’t provide legal advice. But we know that many courts have a help desk where you can get help with forms and procedures. Again, ask.
5. GUERRILLA TACTIC – Show Me the Paper
So most self help websites say you should gather all your paperwork before going to court. It’s good advice, of course, but you don’t need someone to tell you the obvious.
Our advice goes one step beyond. Make the banks show you their paperwork. And that means demanding to see the original documents.
Banks are under no obligation to voluntarily provide you with anything. You must ask. In writing. You get to ask written questions called interrogatories and demand documents, often called requests for production of documents. (Be careful, many states limit you to how many requests you can make or interrogatories you can ask. Know the rules.)
Simply because you ask doesn’t mean the bank will roll over and hand you anything, let alone the good stuff. If you can’t afford a lawyer to represent you in the foreclosure, maybe you can afford one simply to help you with discovery. The process of getting documents and asking questions is called discovery and most states now allow “unbundled legal services” meaning you can hire a lawyer for one discrete task such as discovery.
When a bank or witness fails to hand over documents or objects to your questions, you can file a motion to compel. The actual names of these motions varies from state to state and in most states you must try to work out discovery issues with the other side before enlisting the court’s help.
Again, document everything, make sure everything is in writing and follow the rules and procedures of the particular court where your case is filed.
Often we see that when you ask the bank for information, they will object. Sometimes they object to every single question and request! Objections take many forms. Common objections include:
- Your request was too vague
- Your request was too burdensome
- Your request is irrelevant
- The information you request isn’t in the bank’s possession
The bank is hoping you fold up your tent and just go home. Remember, never give up. Simply because a bank complains that your request is irrelevant doesn’t mean it is or that its direct relevance can even be a defense to your request.
As to vagueness, make sure your requests are as specific as possible.
Burdensome? That is a red herring issue. The banks simply don’t want to give you the information so they say it is too difficult. Fight back and be prepared to argue why it isn’t difficult. They are the bank… they should have the original notes, mortgage, etc.
Irrelevant or not material? Ever hear the saying, “Beauty is in the eye of the beholder”? Most banks think that anything that hurts them is irrelevant!
The last objection – the information isn’t in the bank’s possession – is another red herring. Chances are pretty good that the bank can easily get the information. If they bought your note and mortgage, let them go find the originals.
Chances are that you will have to get a court to order them to produce the documents. Even then, they often don’t honor a motion to compel meaning another motion called a motion for sanctions or motion to enforce may be next.
6. GUERRILLA TACTIC – Demand Originals
Today, residential mortgages have been chopped up, repackaged and sold so many times that often banks can’t find the originals. Before you get too excited, however, very few homeowners win because a bank can’t find an original.
Like the sensational headlines we see in those supermarket cash register line “rags,” the “Show Me the Note” defense rarely wins in court. Of course online you can find the few success stories and they are sensational. The reality is, however, that most people lose. (But we never see those stories.)
So if most people lose, why demand the originals? Judges need to be educated, that’s why. The more the court sees that the banks is trying to pull the wool over everyone’s eyes, the better your chances for some relief.
The banks know this too and will often either voluntarily dismiss or come to you with a better settlement offer.
7. GUERRILLA TACTIC – Document Everything
Today, banks are forced to offer loan modifications but they really don’t want to. Banks took hundreds of billions of dollars in bailout monies. Congress didn’t ask for muck in return but did tell banks to offer loan modifications. The way many banks behave you would think that Congress asked them to swallow rat poison. Getting a modification at some banks is like going to Mars. It is almost impossible.
Phone numbers that are not answered. Bank reps tell you repeatedly that your papers were not received. You probably know the horror stories better than us. We have represented whistleblowers inside banks that tell us how rigged the system is. That is why you need a diary, need to record calls where legal and need to save every shred of paper.
When you go before a judge or jury with dates, times, names and documents your credibility suddenly soars.
8. GUERRILLA TACTIC – Delay Means Opportunity
As a lawyer, I can’t tell you to file things simply to delay. And I truly believe that you shouldn’t. But since foreclosure dockets are typically backlogged, use the delays inherent in the system to prepare a Plan B.
I can’t tell you how often people have been able to keep their foreclosure open for years yet never save a dime. If and when you lose – and banks still win many foreclosures – have a plan. So if you were paying $1000 per month on your mortgage and have now been in foreclosure for 3 years, chances are almost 100% that you haven’t saved up $36,000.
Why not?
That money can be used for rent on a new place, for a lawyer, or to pay down your mortgage if you are able to get a modification. We know people who simply spend what they once paid on their mortgage instead of saving. Bad move.
9. GUERRILLA TACTIC – Subpoena Everyone for Trial
Banks have the burden on proving their foreclosure case (even in most states that have non-judicial foreclosure rules). But they can do so on “business records” unless you object and make them put on witnesses.
Make them put on witnesses.
Often the bank can’t show up to court with originals or even copies of the note. They have ruined your credit and are seeking to toss you out of your home yet can’t even produce a copy of the mortgage that give them this power.
Companies like MERS are supposed to be able to not show who owns the note on your home but prove it too. When forced to a trial and asked to produce these documents they can’t. Ditto for the people who notarized the paperwork.
Look at dates, look for names. Make the bank prove its case and compel them to bring those people to court. MERS signatories, custodian of records, notaries.
Again, you will probably need the court to order this so don’t wait until trial.
10. GUERRILLA TACTIC - Don’t Be Greedy
Don’t be greedy. That should be common sense but it isn’t with many folks. If you come in a tell the court or a jury that you want a free house, don’t expect sympathy. Remember many of those jurors or the judge herself are making mortgage payments. If you demand a free house, suddenly you appear just as greedy as the banks.
Your life has been living Hell for years. Collection letters and constant phone calls. Loss of credit. Strains on your marriage. The uncertainty of where you are going to live. Does that add up to a free house? Maybe but always remember to be reasonable in what you seek.
Because foreclosure is an equitable remedy, judges don’t want to reward banks for their terrible behavior but most don’t want to give you a free house simply because the bank can’t find a piece of paper. Assuming that you really are in default of your mortgage, most judges don’t want to give a free house to someone who hasn’t paid and who has not been saving up to pay.
Courts generally have the power to modify or reform a mortgage but few do so. Have a plan when you go trial. And if you can now pay and have some money saved, you may get relief.
11. GUERRILLA TACTIC – Find Out What Works in Your Area
Foreclosure laws vary widely from state to state and courts are finally starting to wake up to the fact that some bankers are truly evil. That said, not every argument works in every jurisdiction. Once again, if you are forced to battle alone, make sure you research for your state. Better yet, if you can, spend a few bucks on a local lawyer who has tried foreclosure cases.
Let’s say you are a serviceman or woman. There are very special rules to make sure you don’t lose your home while away defending our freedom. This an area where someone knowledgeable in foreclosure law can really help.
Ditto for procedural rules. State procedural requirements can be quite technical but can yield great results. Often there are specific time limits, notice requirements, etc.
We recently did some pro bono work for a gentleman who lost his property. In doing some digging, we found that he was never properly served with the summons and complaint. The court entered a default based on an affidavit from a lawyer at a local foreclosure mill. The affidavit says the gentleman was served days before the court even issued the summons. See the problem? He was served by regular mail in a state that doesn’t allow that form of service and was allegedly served before the court even issued the summons.
Mistakes or frauds like this happen every day. Without a trained eye, however, it is hard to find the magic bullet.
12. GUERRILLA TACTIC - The CFPB and Other Friends
Finding someone to help in the alphabet soup of federal and state regulatory agencies is tough. It seems like there is revolving door between the regulators and regulated. That doesn’t mean you shouldn’t try, however.
Remember that these agencies are overwhelmed. Most won’t get involved but of all the agencies, your best bet may be the CFPB.
It doesn’t hurt to involve your elected officials either. Lobbyists are at their door every day. That said, there is a benefit in big numbers. If everyone complains, state and federal legislators will listen. Find out who runs the constituent services offices for your local elected officials and ask for their help. Better yet, ask for help from ranking members of the legislature too.
Chances are that your local state Senator or U.S. Congressman isn’t chair of the banking committee. Banks listen more to those elected officials who have the most control over them. Even if your senator isn’t on the right committee, ask for help from those that are on the right committee. Back when I worked in the Maine Senate, I can tell you that some senators have more pull than others. Get the right help on your side.
SUMMARY
We hope these insider tips help. Courts are starting to realize that banks can’t be trusted. Unfortunately, that doesn’t mean that every foreclosure is winnable. They are not. Especially if you haven’t paid, haven’t attempted to modify and have no record of your attempts to work with the bank.
Whatever you do, understand that no matter how dark things seem, you are not alone. With fight and faith, you can often find a solution.
A note about us - Lawyers that Sue Banks:
Unfortunately, we don’t handle residential foreclosures. Sometimes we do accept a wrongful foreclosure case. Our definition of wrongful foreclosure is not one in which there may be sloppy, bad, tainted or missing paperwork. Rather, the residential cases we consider are cases in which the homeowner never missed a payment yet still got caught up in the foreclosure nightmare.
If you feel you were the victim of a wrongful foreclosure and want to know how to sue your bank, give us a call.
MahanyLaw and Judge, Lang & Katers are two national boutique law firms that work together to sue banks. No matter how big the bank, we are not afraid to lock horns with big banks and have the experience and passion to take them on. Attorney Brian Mahany was part of the team that forced Bank of America to pay $10 billion in cash and another almost $7 billion to other government agencies and in home owner relief payments.
Outside of the occasional wrongful foreclosure case, our practice is limited to large cases against banks in excess of $5 million of actual loss. Typically, we represent businesses but depending on the size, will take a personal case. We also handle class action cases with other national law firms.
For more information, contact attorney Chris Katers at ckaters@jlk-law.com or by telephone at (414) 777-0778. The author of this post, Brian Mahany, can also be reached at brian@mahanylaw.com.
MahanyLaw and Judge, Lang & Katers – America’s Lender Liability Lawyers. We Sue Banks
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