Attorneys’ fees should NEVER be awarded by summary judgment

Posted on September 1, 2010 by mstopa

As a foreclosure defense attorney who represents homeowners throughout Florida, I’ve become all too familiar with the shortcuts taken by foreclosure mills in trying to “push through” foreclosure cases.  One tactic I repeatedly see is requests for attorneys’ fees as part of a summary judgment motion.  Typically, the plaintiff’s attorney signs an affidavit that his fees are reasonable, and another attorney, acting as an “expert,” signs an affidavit opining the same, and the bank requests that these fees be included as part of the Final Judgment of Foreclosure. 

This may sound like a legitimate approach, but here’s the thing.  If you object to the court’s consideration of attorneys’ fees by affidavit, and insist on the “expert” testifying live, in open court, you should prevent the court from awarding attorneys’ fees at a summary judgment hearing.  This is not an area of law in which the judge has discretion;

attorneys’ fees cannot be awarded based on affidavits when the opposing party insists on live testimony. 

When I see this issue (and I see it in essentially every foreclosure case), here’s what I do.  I file an objection, and argue as follows:

  1. In its Motion for Summary Judgment, Plaintiff attempts to tax attorneys’ fees and costs.  In support, Plaintiff provides an affidavit of its counsel and an affidavit of an alleged expert. 
  2. The affidavit of this “expert” lacks facts and is conclusory in nature.  Under the circumstances, Defendants want to cross-examine this alleged “expert” as to the factual basis of the affidavit. 
  3. Under controlling law, attorneys’ fees may be awarded upon presentation of affidavits, without live testimony, if the party opposing the entry of fees does not object.  See DM Records, Inc. v. Turnpike Commercial Plaza, 894 So. 2d 1030 (Fla. 4th DCA 2005); Ins. Co. of North America v. Julien P. Benjamin Equip. Co., 481 So. 2d 511 (Fla. 1st DCA 1985). 
  4. In this case, however, Defendants are objecting to the use of affidavits in lieu of live testimony.  As such, an evidentiary hearing on the Motion is required.  See Dvorak v. First Family Bank, 639 So. 2d 1076 (Fla. 5th DCA 1994); Dhondy v. Schimpeler, 528 So. 2d 484 (Fla. 3d DCA 1988); Soundcrafters, Inc. v. Laird, 467 So. 2d 480 (“the trial court erred in permitting Laird’s sole expert to testify by way of affidavit over Soundcrafters’ objection.”); Terrazzo, Inc. v. Altman, 372 So. 2d 512 (Fla. 3d DCA 1979); Geraci v. Kozloski, 377 So. 2d 811 (Fla. 4th DCA 1979) (“In an adversary proceeding such as this the determination of an attorneys fee for the mortgagee based upon affidavits over objection of the mortgagor is improper. Evidence should be adduced so that the full range of cross examination will be afforded both parties.”). 
  5. As evidence is not permissible at a summary judgment hearing, see Fla.R.Civ.P. 1.510, it would be reversible error to award attorneys’ fees via summary judgment.  See cases, supra. 

As I see it, this is a really simple way to prevent banks from tacking on attorneys’ fees at a summary judgment hearing.  Banks and their lawyers don’t like it, but short of asking the judge to ignore the law, there’s not much they can do about it.   

One could argue that this is a bad idea because banks can come back and re-set a hearing, with live testimony (after entry of Final Judgment) and at that point they’ll have more attorneys’ fees to tax because we made them come back for another hearing.  In theory, that’s true.  But let me ask you this – how often do you think they’ll actually re-set another hearing?  Once the bank gets a final judgment of foreclosure, do you think they’re going to bother coming back into court, for a separate hearing, with their expert, to present testimony about a few thousand dollars in attorneys’ fees?  Before you answer, bear in mind - often, the bank’s attorney, as well as the fee “expert,” are in a separate part of the state and will do anything possible to avoid having to travel to a hearing.  Perhaps better yet, Florida law typically does not permit attorneys to recover fees for the time spent traveling to a hearing, particularly an out-of-town hearing.  With this in mind, let me ask again – if you successfully prevent the inclusion of attorneys’ fees in a final judgment of foreclosure, do you really think two lawyers are going to travel across the state for an in-person hearing to try to tack on a few thousand dollars in attorneys’ fees (in a case where they’ve already obtained a foreclosure judgment)?  I sure don’t.  That’s a big reason why I file objections to fee awards by affidavit, such as the one here. 

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401(k) withdrawals increasing – WHY?

Posted on August 21, 2010 by mstopa

One of the stories making national news right now is how 401(k) withdrawals have increased drastically.  As the article reflects, the main reason for these increases is people paying their mortgages.

I can’t begin to tell you how much this disappoints me.  I’m not going to repeat my entire blog about strategic default, below, but I will say this.  Loan modifications aren’t happening.  If you think the bank will agree to a loan modification if you can “hang on” a little longer (by paying your mortgage with 401(k) funds), you’re probably waiting for Santa Claus.  In other words…

Before you pillage your retirement account, and ruin your future, to keep paying a mortgage you probably can’t afford (on a house worth far less than you owe), I strongly suggest you re-evaluate your situation.

In my view, it’s rarely a good idea to use retirement funds on monthly mortgage payments.    

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When do judges decide who wins a foreclosure case?

Posted on August 20, 2010 by mstopa

Yesterday, I had an experience in court that has absolutely rocked my world, causing me to wonder:

When do judges decide who wins a foreclosure case? 

Do they evaluate each case on the merits?  Or do judges see “foreclosure case” and automatically decide, in their minds, that the bank is going to win (but refrain from announcing such until entry of final judgment)?  In other words, is the outcome of these cases predetermined by some judges?  As a zealous advocate for homeowners, I’d certainly like to think not – particularly in cases where judges see my name.  After all, I’ve been in courtrooms throughout Florida for a long time now, fighting to help homeowners avoid foreclosure, and I’d like to think I’ve developed a good reputation as an aggressive foreclosure defense attorney. 

My experience yesterday, though, as outlined in this Motion to DQ Judge, makes me wonder, not about myself, but about the thousands of cases in Florida where homeowners don’t have an attorney.  I strongly encourage you to read the entire Motion to DQ Judge, as it’s a matter of public record, but here’s the cliff notes version. 

On August 19, 2010 at 9:30, a summary judgment hearing was set on a mass-motion calendar.  My clients were pro se until just a few days prior, so the documents I filed in opposition to summary judgment had not yet made it into the Court file yet.  As such, the Judge thought my clients were pro se.  At or before 8:15 a.m. on August 19, 2010, the Judge entered conformed copies of a Final Judgment of foreclosure even though the summary judgment hearing was not scheduled until 9:30 a.m. that day.  That’s worth repeating:

The judge entered a Final Judgment of foreclosure more than an hour BEFORE the scheduled hearing.

Sounds impossible to believe, but it’s true.  I learned about this, in fact, only by happenstance - my associate went to the courthouse to review the court file before the hearing, and, upon review of the court file, saw conformed copies of the Final Judgment in the file.  The hearing was not set to begin for more than an hour, yet the Judge had already made copies of the executed Final Judgment, to be mailed to all parties. 

If that sounds too hard to believe, click here – you’ll see the judge’s stamp on a Final Judgment of foreclosure, dated August 19, 2010.  The pictures aren’t great (as they were taken by my associate via his cellphone at 8:15 a.m.), but they clearly show the judge’s stamp on a Final Judgment of foreclosure on August 19, 2010, before the summary judgment hearing had begun. 

At 9:30, when the hearing began, I voiced my concern about this to the Judge.  She was obviously caught off guard, but it quickly became apparent to me that her “procedure” is to make conformed copies of the Final Judgment, to be mailed to the parties, prior to the hearing (and to send out those copies to all parties immediately upon conclusion of the hearing).  Essentially, she’s already made up her mind before the hearing, is holding the gavel in the air, and is ready to throw it down as soon as the hearing starts.

In my view, the obvious problem here is that the Judge is pre-judging the outcome of the case even before she’s heard what the homeowner has to say.  Apparently, she’s unwilling to wait to see what happens at the hearing – she’s so convinced the bank is going to win, she’s made copies of the Final Judgment and envelopes to mail the judgment to the parties.  Essentially, the axe is in the air and she’s ready to drop it as soon as the hearing begins. 

I’ll let you draw your own conclusions about this.  I’ve set forth mine in the Motion to DQ Judge.  Suffice it to say I’m very troubled.  What’s really scary is that, prior to this hearing, I had thought this Judge was one of the more friendly judges as far as foreclosure defense goes, which begs the question – if a friendly judge is doing this, what are the other judges doing? 

If there are any judges reading this, particularly in Florida, then let me say this.  I know the volume of cases with which you’re dealing is frustrating.  But you owe it to the people whose homes you are foreclosing upon to give them all a fair chance, whether they’re pro se, represented by Stopa Law Firm, or represented by some other lawyer.  Everyone is entitled to a neutral and detached judge.  Respectfully, if you’re making conformed copies of a Final Judgment before a hearing even begins, that’s just not fair.

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Foreclosure Mills Under Investigation!

Posted on August 11, 2010 by mstopa

Three of the law firms that regularly represent banks in foreclosure cases throughout the State of Florida – The Law Offices of Marshall C. Watson, P.A.; Shapiro & Fishman, LLP; and the Law Offices of David J. Stern, P.A. – are being investigated by the Economic Crimes Division of the Attorney General’s office regarding allegations of falsifying documents in foreclosure cases.  

But don’t take my word for it – check out the LINK here! 

I’d estimate that approximately 60% of Stopa Law Firm’s cases are against banks represented by one of these law firms.  Suffice it to say that this is big news (though this isn’t exactly “news” to those of you who’ve been following my blogs, below).

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Update: Solution to the foreclosure crisis

Posted on August 5, 2010 by mstopa

Just two days after I posted “My Solution to the Foreclosure Crisis,” below, I read this report that Obama is considering a significant proposal along the lines I discussed.  We’ll have to see what happens, but it’s good to know that our government is beginning to take stock of the extent of the problem.

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My solution to the foreclosure crisis

Posted on August 3, 2010 by mstopa

There’s no sense in belaboring the point any longer.  For me, the solution to the foreclosure crisis is clear:

Reduce the principal on every mortgage on every owner-occupied home in America such that the mortgage is no greater than the home’s present value.

Is this a radical solution?  Absolutely.  But let me ask you this: who would it harm?  Banks?  Please.  The banks got bailed out – with OUR tax dollars.  The bailout has enabled banks to recover, so much so that they’re now earning record profits, while mainstream America continues to suffer.     

When do the American people get their bailout? 

How many millions of Americans need to be foreclosed before the U.S. government steps in?  I don’t want to turn this into a political debate, but what I find most ironic about Obama’s failure to act in response to the foreclosure crisis is that, prior to the election, he was criticized as a socialist, wanting to take from the rich to give to the poor, yet exactly the opposite is happening:

with every foreclosure, the rich are getting richer at alarming rates while the poor and middle class continue to suffer.

It’s absolutely amazing to me that so much wealth is being transferred from the middle class and the poor to the rich – right under the nose of a Democractic president.

Anyway, would reducing every mortgage on owner-occupied properties to the current value of the property be a radical solution?  Absolutely.  Some people would argue this would be unfair to homeowners who’ve paid their mortgages.  I’m not oblivious to such arguments.  However, what’s our alternative?  Continuing to foreclose on thousands of homes every day?  Continuing to allow banks to earn billions and billions of dollars while the public suffers? Haven’t we seen by now that helping banks isn’t going to help Americans, the public at large, or the economy as a whole?  Banks only care about themselves and the profits of their CEOs – helping banks isn’t going to improve our economy.  For me, this all begs the question:  

Where are we headed here? 

In five years, are banks going to own 25% of all real estate in the United States?  30% 40%?  

Can you imagine how our economy would function with banks controlling that much real estate?  It’s a scary thought. 

Times like these are why we have a President.  Mr. Obama, it’s time for you to get involved and make a difference.  If you wait five years, or even two years, it will be too late.  Right now is the time to

Reduce the mortgage on every owner-occupied home to its present value. 

Of course, unless and until something like this happens, it’s incumbent upon homeowners facing foreclosure to retain a competent foreclosure defense attorney.  You never know – if you don’t give up, and hire an attorney to defend your case, maybe the government will do something like this, enabling you to keep your home (whereas if you give up, you’ll lose your home forever). 

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Strategic Default and Depleting Savings / Retirement Accounts

Posted on July 31, 2010 by mstopa

In recent weeks, an increasing number of prospective clients have met with Stopa Law Firm for an initial consultation about foreclosure even though they haven’t missed a mortgage payment.  A few years ago, that would have sounded crazy.  Nowadays, though, millions of Florida homeowners are tired of making payments on a home worth a fraction of what they owe.  Generally, these homeowners fall into two categories – those considering a “strategic default,” i.e. intentionally stopping payments even though they can afford to pay, and those homeowners who can afford to pay but are slowly depleting their savings or retirement accounts to do so.  It’s time that I blog about both scenarios. 

First off, everyone’s situation is different, and it’s hard to make blanket statements in a blog that apply to everyone.  That said, if you’ve been depleting your savings or retirement account(s) to pay your mortgage, then, unless you expect your finances to improve in the near future, it’s probably time that you re-evaluate your situation. 

For example, suppose you had $70,000 in savings/retirement in July, 2009, but in your ongoing attempt to pay your mortgage (and other necessary expenses), that number is down to $35,000.  If that sounds like you, then the first question I’d ask is this:

Do you expect your situation to improve in the near future? 

If the answer is “no,” and you’re going to continue depleting your savings/retirement at a rate of roughly $35,000 per year, then my next question would be:

What are you going to do when your savings/retirement runs out? 

Many smart, hard-working, well-intentioned clients have no answer to this question.  For most people, there is no answer.  What can you do when you run out of money and can’t pay your mortgage?  The next question I’d ask is:

Would it be better to stop paying your mortgage, and face a foreclosure lawsuit, now, with $35,000 in your pocket, or to continue paying your mortgage for another year, run out of money, and then face foreclosure? 

For most people, the answer to this question is clear.  I mean, if you’re going to (possibly) get foreclosed, isn’t it better to do so with $35,000 than with zero?  Heck, for that matter, wouldn’t it have been better to do so with that original $70,000?  Generally, the way I’d characterize it is this: 

if you realize a foreclosure lawsuit is inevitable, and it’s just a matter of when (not if) it comes, it may be better to stop paying your mortgage now, and face the problem sooner, with money in your pocket, rather than later, with no money in your pocket. 

After all, if you choose to give all the money to the bank in the future, you certainly can, but if you give the bank all your money and then get foreclosed, you’re never going to get that money back. 

At Stopa Law Firm, we’ve been giving advice like this for a long time.  In fact, I was in the news with this as far back as October, 2009 – here.  (While I don’t agree with everything that reporter wrote in that story, the point is clear – for some people, stopping payments is the right option.)  Anyway, now that Stopa Law Firm has hundreds of clients, I can’t tell you how many homeowners are thrilled with their decision to stop paying, save their money, and defend their foreclosure.  In fact, many clients have told us they wish they had stopped paying sooner.  Does that mean everyone should stop paying?  Of course not.  But:

if you realize you’re slowly depleting your savings, and you’re going to soon be out of money, what are you supposed to do – give your last dime to the bank and then get sued for foreclosure anyway? 

If you can accept the premise that some people should stop paying, the logical question becomes “why shouldn’t everyone?”  Many Florida homeowners are, in fact, considering a “strategic default” – intentionally withholding mortgage payments even though they can afford to pay because their house is worth so much less than what they owe.  The rationale is clear: 

Why pay $250,000 for something worth $150,000?  

At the outset, let me be clear.  Nothing in this blog is intended to encourage anyone to stop paying on their mortgage, particularly if they can afford to do so.  The decision to strategically default is complicated and must be evaluated on a case-by-case basis.

That said, I can totally understand if, after consultation with an attorney, a homeowner were to make the conscious decision to withhold mortgage payments on a home worth $150,000 with a mortgage balance of $250,000. For many homeowners, this is a perfectly leigitmate business decision. 

Contrary to what the banks want you to believe, there’s nothing immoral, unethical, or slimy about a strategic default.  A strategic default is, quite simply, a business decision – no different than those made by the banks every day.  Some people may disagree, but it’s not my job to enforce someone else’s version of morality – it’s my job to represent Florida homeowners. 

If you’re wrestling with the ethics of strategic default, consider two real-world world comparisons – one big, one small. 

First, suppose you buy a new, two-year cellphone plan with unlimited minutes, 24/7/365, for $100/month.  In so doing, you’re entering a contract, “promising” to pay $100/month for two years.  Now suppose in two months, a different cellphone provider offers the same plan for $50/month.  If you could get out of the first contract by paying a $200 cancellation fee, wouldn’t it make sense to do so, even though you’d be going back on your “promise”?  I think so, and I suspect most people would agree.  (After all, you’d have saved the $200 cancellation fee after four months with the new plan and every month thereafter would entail $50/month in your pocket.)  A situation like that is not driven by ethics or morality - you’re making a business decision – doing what’s best from a financial perspective.  How is that wrong?

If that example is too simplistic for you, let’s look at a big-business example of “strategic default” transpiring now, right in our own backyard.  The Tampa Bay Rays play their home games at Tropicana Field in downtown St. Petersburg.  They have a contract with the City of St. Petersburg to remain at that stadium through 2027.  The Rays owners, though, are frustrated with low attendance rates and want the team to move to Tampa.  (Anyone who knows the Tampa/St. Pete area knows the best place for a stadium would be in western Tampa – near where Stopa Law Firm has its Tampa office, actually, and not downtown St. Pete).  Moving to Tampa, though, would breach the Rays’ agreement with the City of St. Pete.

Gee, does this sound familiar?  A decision about whether to breach a contract for business purposes … that’s precisely the situation so many Florida homeowners are facing.  What’s fascinating to me, though, is that when the media talks about the Rays, it does so purely from a business perspective, yet when the same discussion is about homeowners, morality somehow enters the picture.  Why?  I realize some homeowners have a sentimental attachment to their home, and that’s their prerogative.  Aside from that, though, I see no reason why strategic default should not be viewed any differently than the cellphone example or the Rays’ stadium example.  The decision to initiate a strategic default is complicated, yes, but if it makes sense from a business perspective, why not?  That’s why I’d be shocked if the Rays are still in St. Pete as of 2027 – once the business dynamics get this awry, something has to give. 

For an interesting take on strategic default, check out this well-written article.

It’s unfortunate that our society is at the point where homeowners must decide whether to stop paying on a mortgage, whether it’s because they are slowly depleting their savings or owe more than the house is worth (or both).  That said, when banks took billions of dollars in bailout money, they did what was in their own best interests (by putting the money in their pockets and not giving loan modifications as was intended).  With that in mind, the question for me becomes:

If the banks can do what’s in their best interests, why can’t homeowners? 

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Open Letter to Chief Judge Blanc – Palm Beach County

Posted on July 28, 2010 by mstopa

In recent weeks, I’ve noticed two things out of Palm Beach County that really concern me. First, I saw this article in the Palm Beach Post, where Chief Judge Blanc discussed the backlog in foreclosure cases and his belief that “it is important to clear the foreclosure cases so that vacant and dilapidated homes can go back on the market, presumably increasing neighborhood property values.” As I explained in my blog entitled “Who is Harming the Economy – BANKS, Not My Clients” (below), it’s clear that banks are the reason for these abandoned homes, not homeowners, and pushing foreclosure cases through will only make things worse in that regard, not better.

Then, just yesterday, I saw this 103-page (103 page!!) Palm Beach foreclosure docket set for August 2, 2010 (h/t Lisa Epstein of foreclosure hamlet). At that point, I felt compelled to write an

Open Letter to Chief Judge Blanc

In so doing, I am really trying to be respectful and not be critical. That said, I am going to keep writing letters like this, just as I’ve done to Chief Judge McGrady in Pinellas and Chief Judge Menendez in Hillsborough, in the hopes that Florida judges will realize there are more important concerns than the backlog in their cases. With billions of dollars changing hands via foreclosure judgments, isn’t it time that judges take a long and hard look at the environment they’re creating by “pushing through” foreclosure cases? As I explain in the letter, there are a lot of far-reaching consequences of these foreclosure cases, and it’s time that everyone take stock of the situation. Continuing to “push through” foreclosure cases, hundreds at a time, is simply not the answer.

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Foreclosure defense – finding reputable attorneys amidst a sea of lawyers

Posted on July 24, 2010 by mstopa

With Florida facing unprecedented numbers of foreclosures (and no end in sight), an incredible number of lawyers, and even some non-lawyers, have thrown their hats into the ”foreclosure defense” arena in Florida. Whether it’s Tampa, Miami, Jacksonville, Orlando, or somewhere in between, experienced attorneys such as those at Stopa Law Firm are available to assist homeowners through the foreclosure process.  The problem, though, is this -

with all of the choices available, how can the average homeowner tell the difference between an experienced attorney, who is likely to help, and a “johnny come lately” who is not? 

In recent weeks, I’ve seen my fair share of pleadings and court filings from other foreclosure defense attorneys (usually because a client started out with a different lawyer and changed to Stopa Law Firm).  Without naming names, I must say - some of the pleadings and court filings I’ve read are absolutely awful.  Don’t get me wrong -there are a fair number of reputable attorneys who can capably defend foreclosure cases.  In my view, though, many are inept.  How can you tell the difference? 

Here are some “red flags” I’d keep in mind: 

1.  Up-front money to a non-lawyer.  It’s against the law for a non-lawyer to charge an up-front fee for a loan modification or foreclosure defense work.  A non-lawyer can’t defend a foreclosure case anyway (that’s called the unlicensed practice of law – it’s a criminal offense, actually), so if you’re seeking help with foreclosure, I’d be exceptionally careful about retaining any non-lawyer, especially with up-front money. 

2.  Realtors pushing a short sale.  Look, I don’t want to badmouth realtors.  But there’s an inescapable problem with putting your trust in a realtor (instead of a lawyer).  Typically, all realtors care about is selling the house – after all, that’s the only way they get paid.  Realtors may want you to believe a short sale will solve all your problems, but often, that’s not so.  Usually, when the bank agrees to a short sale, the homeowner remains liable for the deficiency (the difference between what you owe on the house and the short sale price).  Often, the amount of this deficiency can be tens or even hundreds of thousands of dollars.  And if this deficiency is reduced to judgment, that judgment remains for twenty years, meaning the bank may pursue payment of these monies from you (e.g. garnishing wages) for up to twenty years. 

Time and time again, I’ve seen realtors either fail to disclose these facts or actively mislead homeowners about their liability for a deficiency.  Don’t make that mistake.  No matter what your realtor may tell you, the standard short sale contract does not include a waiver of deficiency.  Just because a short sale contract says it requires the bank’s approval, that does not mean the bank is waiving the deficiency.  Accepting a short sale and waiving a deficiency are not the same thing.   

If you’re thinking about a short sale on your home, ask yourself this – what am I gaining out of this?  How does this help me?  If the bank is putting, in writing, that it is waiving the deficiency, and accepting the short sale price as full payment of the Note and Mortgage, then a short sale may make sense, as you’d be eliminating a big liability (the deficiency).  However, if the bank isn’t waiving the deficiency, how does it help you to do a short sale?   I’d argue, in this scenario, that a short sale hurts most homeowners, for two reasons.  First, instead of continuing to live in the home while the foreclosure case is pending, that homeowner must move out and find a new place to live.  Isn’t it better to keep living in your house?  Second, by agreeing to sell the home, and vacate possession, that homeowner has lost virtually all leverage with the bank.  If that doesn’t make sense, pretend you’re the bank for a moment (scary thought, I know).  Why would any bank agree to waive the deficiency if the house is already sold and you’ve moved out?  What would the bank gain by doing that?  Arguably, nothing, and that’s precisely the problem. 

This is where, in my opinion, a lawyer is so much more valuable than a realtor.  By defending your foreclosure case, while you live in your home, lawyers can try to point out technical problems with the lawsuit against you.  Realtors can’t.  Hopefully, the lawyer is good enough that the bank prefers to work out a settlement with you (i.e. a short sale as full payment, with a full waiver of the deficiency, or a loan modification) instead of continuing with the foreclosure case.  In that scenario (unlike the prior example, where you’ve already sold the home, moved out and lost all leverage), the bank would have a reason to waive the deficiency – you’d be moving out and agreeing to sell the house as part of the settlement.  Again, I’m not trying to badmouth realtors, but this is something I’d consider before I put all my trust in a realtor.  

3.  Any type of guarantee.  Lots of prospective clients want guarantees.  “Can you guarantee me a loan modification?”  “Can you guarantee me that I can live in my home for X months?”  No matter what, I never provide guarantees.  In fact, my standard fee agreement clearly indicates there are no guarantees.  Make no mistake - this is not because I question my abilities.  Guarantees have no place in foreclosure defense because (i) The Rules Regulating The Florida Bar prohibit a lawyer from giving a client any sort of guarantee on the outcome of a lawsuit; and (ii) there is never a way to know, for sure, how a case is going to play out, especially a foreclosure case.  Even if I think the law is on my client’s side, the judge may disagree.  Even if I think a loan modification should happen, the bank may disagree.   There are, quite simply no guarantees in foreclosure defense. 

With this backdrop, it’s troubling that I’ve seen and heard of instances where clients facing foreclosure have been given a guarantee.  If you’re been given a guarantee, I’d question not just the validity of the guarantee, but the reputation of the person providing it to you.  If that sounds harsh, check out R.Reg.Fla.Bar. 4-7.2(c)(1)(g). 

4.  Pushing bankruptcy at the initial consultation.  There’s no easy way to say this, so I’ll just say it.  A fair number of bankruptcy firms have expanded their practice into foreclosure defense, but these firms don’t necessarily know how to properly defend a foreclosure case.  Bear in mind, bankruptcy law and foreclosure defense may seem similar, but they’re drastically different – different courts (federal vs. state) with entirely different sets of rules (Federal Rules of Civil Procedure vs. Florida Rules of Civil Procedure).  Many bankruptcy firms sell themselves as “full service” firms, but they’re really just bankruptcy firms that do a “bare bones” foreclosure defense, which (once they lose the foreclosure case) dovetails into a bankruptcy.  This sounds harsh, and I typically don’t like to talk about other lawyers in this tone, but I’ve seen too many instances where bankruptcy firms did not interpose legitimate defenses for a foreclosure client, then pushed that client into bankruptcy.  

Make no mistake – bankruptcy is a perfectly useful tool for many clients.  However, if a lawyer is trying to sell you on a bankruptcy in your initial consultation, and your foreclosure lawsuit was just filed, I’d be skeptical of his/her ability to competently represent you in that foreclosure case (particularly if you don’t have other debts).  Quite simply, for most clients I’ve seen, bankruptcy is a last resort.  Many homeowners don’t realize – it’s entirely possible that a foreclosure case can be resolved without resorting to bankruptcy.  For instance, one benefit of bankruptcy – eliminating the deficiency – could be accomplished (remember, no guarantees) without a bankruptcy, merely by defending the foreclosure case and entering a settlement with the bank.  And even if a settlement doesn’t transpire, there is typically nothing stopping you from filing a bankruptcy as your foreclosure lawsuit nears a conclusion.  In essence, I suggest ensuring you get the best of both worlds – a competent foreclosure defense attorney and, if and when necessary, a competent bankruptcy attorney. 

Nothing in this post was directed at anyone in particular, and, as always, these are just my opinions.  That said, I thought my views on these issues may help homeowners sift through the sea of foreclosure attorneys in Florida so as to make an informed decision.

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Servicemembers – know your rights

Posted on July 23, 2010 by mstopa

Facing a foreclosure is hard enough.  For members of the military, it’s even harder.  How can anyone be expected to deal with an impending foreclosure while being deployed overseas in service of our country?  It’s bad enough having to worry about your spouse and children being evicted from the home in which they live - imagine having to do so while you’re risking life and limb overseas. 

Fortunately, laws exist to prevent our servicemembers from confronting this nightmare.  The Servicemembers Civil Relief Act, 50 U.S.C. Sections 501-596, is, by its very terms, intended to enable the brave men and women of our military to “devote their entire energy to the needs of the nation” by requiring that lawsuits, including foreclosure lawsuits, be stayed while the servicemember is deployed.  There are exceptions, of course (just like most things in the law), but the way I read the statute, it would be hard for any judge to allow a foreclosure to proceed against a homeowner who is overseas on active military duty.  See Coburn v. Coburn, 412 So. 2d 947 (Fla. 3d DCA 1982).  Significantly, there is no distinction even if the servicemember has an able-bodied spouse home to defend the foreclosure case – the entire lawsuit is still stayed. 

If you’re a member of the military, are about to be deployed overseas, and are facing foreclosure, make sure the judge handling your case knows about your deployment.  That’s what I just did for one client in a case before Judge Levens in Tampa, and the court entered an Order Staying The Case until his deployment ends.  This means, in essence, that no activity can happen in the case until my client returns from his deployment, ensuring that there will be no foreclosure, if at all, until after my client’s deployment is over.  Banks may think this is unfair, but The Servicemembers Civil Relief Act is specifically designed to ensure that servicemembers can “devote their entire energy to the needs of the nation” and not have to worry about pending foreclosure lawsuits.

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