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It appears more and more homeowners are beginning to file lawsuits against not only the foreclosure mill law firms, but also the young lawyers signing their name to the pleadings. But does this make sense to do and is it worth it? Looking at this from several perspectives, young lawyers signing their names to these pleadings should be concerned especially where the document being filed are false, misleading or fabrications designed to create standing where none existed. This would include complaints, exhibits, MERS assignments, summaries, allonges, amounts and final judgment on behalf of a named client that never hired them directly but was instead, retained by another party under a purported power of attorney.
Indeed borrowers are on the offensive as we see more and more federal complaints being dismissed under the compulsory counterclaim rule to the foreclosure action. Borrowers are being forced to file cross-claims against the mills, their attorneys and servicers and counterclaims against named plaintiffs in the foreclosure action to preserve their rights. From a numbers standpoint the effect could be staggering enough to cause serious problems to foreclosure mills and the young attorneys signing these pleadings. For example, there are only several foreclosure mills representing all of the foreclosure cases throughout the State of Florida. If each mill firm, individual attorney and servicer is cross-claimed with the named plaintiff being counterclaimed for filing false, misleading and/or fraudulent documents in the case, have discovery propounded against them, be deposed etc. this alone would raise the cost of litigating template style foreclosures. As it stands, foreclosure mills charge their plaintiff clients an average of $1,500.00 to handle uncontested cases. But what would it cost the foreclosure mill firm, attorney and servicer to defend a cross-claim against them up to the motion to dismiss phase or if successfully denied, past the motion to dismiss? And would that cost be something the foreclosure mill firm would be entitled to pass on to their plaintiff client? Regardless of who pays, someone has to absorb that cost.
Right now there are sanctions being dished out left and right against foreclosure mill firms and their clients for fraud, misconduct and other acts. Borrowers have watched David Stern disbarred and Marshall C. Watson suspended and sanctioned for millions but the foreclosure mill attorneys escaped, changed names and continued to do the dirty work with impunity. Is it worth a young attorney to sign their names to these pleadings for less than $65,000 a year? Given there are only a hand full of foreclosure mill firms – from a tactical and strategic point, cross-claiming them and the attorney signing the pleadings could cripple them.
But does it make sense in every case to do this? First consider if you lose you may be subject to paying their request for attorney fees but given a home loan is the largest loan you will ever have and given their desire for deficiency and a borrowers likelihood to file bankruptcy, I can see how filing the cross-claim without worry comes into play. Second, I can see why many are filing these cross-claims in actions where the loan was sold into the secondary market given the loan typically never made it into the trust and their entire angle of standing is everything but the trust documents to support their foreclosing position. Third, it is only a matter of time before this windfall “we’re the holder of the note that’s all that matters” comes to a screeching holt once judges start understanding why plaintiff’s are not claiming holder in due course as oppose to just holder. Granted Florida case law hasn’t gotten to the level of adopting the fact that secondary market loans purportedly sold and transferred to NY Common Law Trusts are governed under NYS Trust Law. But once Florida courts start figuring it all out like other states are that these loans weren’t funded by the so-called originators, the loans never made it to the trust, these post closing and cut-off assignments are void and begin rejecting MERS and the signing authority of these auto-generated self proclaimed MERS employees, the deeper the hole for the attorney whose name appears on the pleading(s). Once the music stops and you’re left standing with no chair, YOU’RE DONE! My advice… …come over to the light and jump ship now from the dark side. There’s greater morality in helping families to save their homes then playing a role in taking bedrooms from children. Even if the you don’t answer to these judges in this life – promise you will have to answer to the only judge that does matter!