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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34863
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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Is the mass joinder lawsuit against mortgage companies a valid

Customer Question

Is the mass joinder lawsuit against mortgage companies a valid way to avoid foreclosure?
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 3 years ago.
No. It's a valid means of suing a mortgage company for fraud and deceptive trade practices. But, none of this will, by itself, stop a pending foreclosure. The mortgage company could foreclose, and you could later win the mass joinder suit, and receive damages in an amount necessary to make you whole from your losses in the foreclosure. But the foreclosure itself would not necessarily be enjoined by the mass joinder action, because that injunctive relief may not be part of the suit, or the lawyer who is prosecuting the case -- due to the large extra expense involved in representing the individual plaintiff's seeking injunctive stays on the foreclosures.

BotXXXXX XXXXXne, don't join the lawsuit expecting a stay of your foreclosure, unless the lawyer tells you that he/she will seek to obtain a preliminary injunction on your behalf -- and not charge you extra for the work.

Hope this helps.

socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34863
Experience: Attorney and Real Estate Broker -- Retired (mostly)
socrateaser and 2 other Bankruptcy Law Specialists are ready to help you
Customer: replied 3 years ago.
I purchased my home for 180,000 in 2005... Now homes in my neighborhood are selling for 62K, 67K... I owe $130,000 on my mortgage. I am looking at all of my options. I have seen ads for $295 bankruptcies, which seems insanely cheap. When I spoke to the rep about the mass joinder, she quoted me a retainer fee of $5000, which seemed high. You said the foreclosure process is costly. Do you think my fees could end up being higher than $5000?
Expert:  socrateaser replied 3 years ago.
The objective of these suits is to acquire sufficient funds to fight the bank. The attorneys could expect to spend $100,000-$250,000+ to litigate this case. That means 20-50 plaintiffs. If there aren't that many in front of you, then I wouldn't go in unless the attorney plans to give you your money back if an insufficient number of plaintiffs don't join the lawsuit.

Also, the competency of the law firm matters. Just because someone has a license to practice law, doesn't mean that the lawyer is knowledgeable, experienced, and has the infrastructure in place to fight a large banking institution. You could get your ass handed to you. So, don't think this is a slam dunk. It could be a scam -- lawyer's are not unknown to commit fraud as a means of making a boatload of dough in a hurry.

A Chapter 7 bankruptcy costs around $2,500 -- though I've seen a few lawyers bringing their costs down to near $1,000. But, those are for very simple "no asset" cases where the debtor has nothing but simple debts, no income and no surprises (student loans, fraud claims by creditors, borderline income, business interests, tax problems, etc.). Because if the lawyer has to show up in court more than once, then $1,000 is going to be a money loser for the lawyer. Re $295 -- that's impossible, because the filing fees are practically that much.

Hope this helps.

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Attorney and Real Estate Broker -- Retired (mostly)