A review of Google searches made by Florida homeowners performing on-line research suggests that there are a significant number of homeowners trying to find out how much it costs to have an attorney defend them in foreclosure litigation. While our firm includes its price in its website ($495.00 per month on loans under $500,000) it appears that most law firms do not include their prices in their websites. To help homeowners make informed decisions about the cost of hiring a lawyer to defend themselves and their home in a foreclosure case, it is necessary to discuss the four most common pricing models among law firms that defend foreclosure cases. The four most common models are: Fixed Fee, Hourly, Monthly, and Hybrid.
FIXED FEE
ADVANTAGE: The Homeowner Pays One time.
DISADVANTAGE: Lawyer has little incentive to work on the case. Arrangement may put lawyer’s interest of obtaining reasonable hourly rate in conflict with client’s goals.
CAUTION: Look our for hidden fees.
When a lawyer represents homeowners on a fixed fee basis all the money the lawyer will ever receive is in the lawyers hands on day one. Working harder on the case or spending more time on the file will not benefit the firm’s bottom line. If the lawyer charges $2,400 for a fixed fee defense and usually changes $300.00 per hour, then you can divide the cost of the defense by the hourly rate to figure out how many hours the lawyer expects to spend on the case. Will the lawyer who is hired on a fixed fee basis take a deposition or file a motion to compel better answers to a request for production of documents, if doing so only increases the amount of work the lawyer has to do and the duration of the case? Will the lawyer hired on a fixed fee basis attend mediation and summary judgment hearings on the client’s behalf. Some lawyers who accept foreclosure cases on a fixed fee basis only intend to file an answer and discovery requests. If a fixed fee representation is being considered the homeowner should be frank with the prospective lawyer during the initial interview. The client and lawyer should be on the same page as to what is included in the fixed fee and whether the lawyer contemplates attending mediation and summary judgment hearings.
HOURLY:
ADVANTAGE: Lawyer has a financial incentive to work on the case
DISADVANTAGES: Lawyer has a financial inventive to work on the case. Fees may vary widely from month to month.
It is hard for consumers to evaluate how much time various legal tasks require. The lawyer may have incentive to perform work because it is billable rather than crucial to advancing the case. The amount of each bill may vary greatly depending amount of time spent by the lawyer.
MONTHLY:
ADVANTAGES: Fees are the same every month. Lawyer has a financial incentive to work on the case.
DISADVANTAGE: Penalizes lawyer for rapid resolution of case.
For a homeowner seeking to stay in their home for as long as possible, monthly fees will align the interest of the lawyer and the client. For a owner of a vacant investment property monthly fees with a cap on total months or a bonus for a quick resolution can modify a monthly fee arrangement to make it work for all parties. With monthly fees the fee is always the same so there are no surprises for the client. Monthly fees make foreclosure defense affordable for many consumers who lack sufficient cash for a one time up front fee, and can’t afford high hourly fees.
HYBRID:
A hybrid fee arrangement combines two or more of the above models. For instance a firm might change hourly with a monthly cap on the total fee. Some firms also include a reverse contingency where the firm receives a bonus in the event the firm is able to obtain a reduction of the loan balance or interest rate. Under a reverse contingency the firm is paid a portion of the savings the client receives as a result of the representation.
UPDATE (May 2012): This blog post has now been read over 2,000 times! When evaluating the cost of a specific law firm homeowners should not ignore a firm's results and choose a lawyer on price alone. A cheap foreclosure defense lawyer who does a bad job will most likely costs more than an expensive foreclosure lawyer who does a good job. When our firm firm wins foreclosure cases we file motions against the bank to recover attorney's fees for the benefit of our clients. Firms that win cases and recover fees from the the bank can substantially decrease a client's legal expenses. For more information on recovering fees from banks see our blog post The Robin Hood Law Firm.
UPDATE 2 (July 2013): New Post about BAIT & SWITCH pricing strategies being used by some law firms. To read the post click here.
UPDATE 3 (January 2015): This post has now been read over 5,000 times! In 2014 we set a firm and Brevard County record for attorney fee recoveries from banks, and retuned tens of thousands of dollars to our clients by winning their foreclosure cases, recovering attorney's fees from the banks that lost the cases, and returning money from such recoveries to our clients.
Consumers with questions about the cost for Shuster & Saben to defend a foreclosure case in Miami-Dade, Broward, Palm Beach, Collier, Lee, Martin, St. Lucie, Indian River, or Brevard County can e-mail foreclosuredefeneselaw@gmail.com.
Sunday, February 7, 2010
Wednesday, January 27, 2010
Ten Months and Two Weeks Later ... Still Perfect in Naples
In early March 2009 an upside down Naples homeowner contacted our law firm in search of litigator willing to take on lenders like Fifth Third Bank and Deuthsche Bank in Collier County. The homeowner was close friends with a prominent Naples real estate investor who had hired one or two local lawyers to defend foreclosures with mixed results. It was the perception of the homeowner and his investor friend that some lawyers who dabble in foreclosure do not fight the cases but merely move for an extension of time. The investor perception was that in the past he paid for “foreclosure defense” but what he received was merely “foreclosure delay.”
When I heard the homeowners plight, I advised him that for one case it might not be practical for our firm to take cases in Naples but if there were others we would consider it. I always enjoyed going to Naples to visit my wife’s relatives and taking foreclosure cases in Naples would be another excuse to visit Michelbob’s Ribs. On March 11, 2009, I met with the upside down homeowner, his friend the real estate investor, a local realtor, and local mortgage broker and another distressed homeowner. By the end of the day, we had committed to defend five cases, with total mortgages of 2.7 Million dollars (two of the properties had loan balances in excess of $700,000). Since this trip we been blessed with additional referrals from the original Naples clients.
In my first interview with a prospective Naples client the client had many frank questions. “Why should I hire a law firm with offices in Miami and West Broward to litigate a case in Collier County?” she asked. I explained that for our firm to litigate in Naples is not an impediment as the lenders' lawyers usually have to travel from Tampa or Fort Lauderdale. While I could not comment as to the quality of the representation she would receive from local counsel, I let her know that the representation we would provide would be through and effective and that we would keep her in the loop by scanning and E-mailing her the copies of the pleadings we filed on her behalf. Further, she would not see knee-jerk motions for extension of time. Our way of doing things would be to sit down, assess her situation, and develop a strategy with her to achieve her objectives based on her financial position and the strengths and weaknesses of her case.
After ten and half months none of our Naples clients have lost their home to foreclosure. One of the clients (the one who asked all the questions) had a successful no-recourse short sale. The rest of the clients are still living in their homes. Our firm has since grown from two offices (Miami and Plantation / West Broward) to three offices when the firm opened its third office in Melbourne. Hopefully the firm will be able to add a full time office in Southwest Florida later this year. For More Information about Shuster & Saben please visit our website www.attorneyforeclosuredefense.com.
When I heard the homeowners plight, I advised him that for one case it might not be practical for our firm to take cases in Naples but if there were others we would consider it. I always enjoyed going to Naples to visit my wife’s relatives and taking foreclosure cases in Naples would be another excuse to visit Michelbob’s Ribs. On March 11, 2009, I met with the upside down homeowner, his friend the real estate investor, a local realtor, and local mortgage broker and another distressed homeowner. By the end of the day, we had committed to defend five cases, with total mortgages of 2.7 Million dollars (two of the properties had loan balances in excess of $700,000). Since this trip we been blessed with additional referrals from the original Naples clients.
In my first interview with a prospective Naples client the client had many frank questions. “Why should I hire a law firm with offices in Miami and West Broward to litigate a case in Collier County?” she asked. I explained that for our firm to litigate in Naples is not an impediment as the lenders' lawyers usually have to travel from Tampa or Fort Lauderdale. While I could not comment as to the quality of the representation she would receive from local counsel, I let her know that the representation we would provide would be through and effective and that we would keep her in the loop by scanning and E-mailing her the copies of the pleadings we filed on her behalf. Further, she would not see knee-jerk motions for extension of time. Our way of doing things would be to sit down, assess her situation, and develop a strategy with her to achieve her objectives based on her financial position and the strengths and weaknesses of her case.
After ten and half months none of our Naples clients have lost their home to foreclosure. One of the clients (the one who asked all the questions) had a successful no-recourse short sale. The rest of the clients are still living in their homes. Our firm has since grown from two offices (Miami and Plantation / West Broward) to three offices when the firm opened its third office in Melbourne. Hopefully the firm will be able to add a full time office in Southwest Florida later this year. For More Information about Shuster & Saben please visit our website www.attorneyforeclosuredefense.com.
Sunday, January 24, 2010
Is HAMP one big Scam?
Yesterday, CNN published an article about Home Affordable Modification Program otherwise know as HAMP and the Obama Plan Modification. The article is titled “450,000 At Risk In Foreclosure-Prevention Program.” If you have not read the article here is a link to the story. I was suspicious of the banks participating in HAMP before the article was published. Too many times I our law firm has heard from homeowners who had stopped making mortgage payments and were contacted by their lenders about a HAMP modification. The homeowners were promised that is they made three (3) trial payments they would be approved for a HAMP loan modification that would reduce their mortgage payments. The homeowner would be told that if they made the three trial payments and submitted the requested paperwork (usually pay stubs and tax returns) they would receive a loan modification, the amount of which would be determined during the 90 day trial period. Many of the homeowners contacting our firm for help made the three trial payments only to be told that they did not qualify for a modification or that their documentation was incomplete.
After reading CNN’s article, I am beginning to feel that HAMP is just a scam perpetrated by lenders against homeowners. The statistics reported by CNN show that less than 10% of the homeowners who have participated in HAMP received a permanent modification. Specifically, CNN reports that while 787,200 homeowners are in trial modifications but only 66,500 people have received permanent adjustments.
A bank-loving lobbyist might speculate that the reason for so few modifications is a failure by the homeowners to make their three trial payments on time. Such speculation would be WRONG as the Treasury Department confirmed to CNN that three-quarters of the homeowners in trial modifications are making their three trial payments on time.
My suggestion for Florida homeowners that are not in foreclosure and are considering a HAMP modification is get everything in writing. If a homeowner who has not paid their mortgage in several months is called about HAMP, the homeowner should request written confirmation that if they make three timely trial payments they will receive a permanent modification. The amount of the permanent modification should also be provided before the first payment is made. After the first payment is made and the documents are submitted, the homeowner should call to confirm receipt of the documents and confirm that no additional documents are needed. If a bank representative orally confirms that no additional documents are needed such confirmation should be reduced to writing in the form of an E-mail or letter to bank confirming the conversation. By confirming that the lender or servicer does not need any additional documents the homeowner takes away the lender’s ability to call after receiving 3 payments and only to tell the homeowner that they must start over because one form was incomplete or missing a signature or comma.
For homeowners who already in foreclosure any loan modification should occur as part of a written settlement agreement reviewed by the homeowner’s legal counsel. Before the homeowner pays one thin dime, the homeowner must know what performance on their part will result in the dismissal of the bank’s case and the amount of interest rate and loan balance reduction they will receive in return for their resumption of monthly mortgage payments.
Homeowners who made three HAMP payments and did not receive a permanent modification should consult a licensed attorney to evaluate if the homeowner has a claim for either fraudulent inducement or breach of contract. Our firm is litigating against Litton and Bank of America for breaching a loan modification agreement. Homeowners with further questions about this issue my inquire by e-mail to foreclosuredefenselaw@gmail.com
After reading CNN’s article, I am beginning to feel that HAMP is just a scam perpetrated by lenders against homeowners. The statistics reported by CNN show that less than 10% of the homeowners who have participated in HAMP received a permanent modification. Specifically, CNN reports that while 787,200 homeowners are in trial modifications but only 66,500 people have received permanent adjustments.
A bank-loving lobbyist might speculate that the reason for so few modifications is a failure by the homeowners to make their three trial payments on time. Such speculation would be WRONG as the Treasury Department confirmed to CNN that three-quarters of the homeowners in trial modifications are making their three trial payments on time.
My suggestion for Florida homeowners that are not in foreclosure and are considering a HAMP modification is get everything in writing. If a homeowner who has not paid their mortgage in several months is called about HAMP, the homeowner should request written confirmation that if they make three timely trial payments they will receive a permanent modification. The amount of the permanent modification should also be provided before the first payment is made. After the first payment is made and the documents are submitted, the homeowner should call to confirm receipt of the documents and confirm that no additional documents are needed. If a bank representative orally confirms that no additional documents are needed such confirmation should be reduced to writing in the form of an E-mail or letter to bank confirming the conversation. By confirming that the lender or servicer does not need any additional documents the homeowner takes away the lender’s ability to call after receiving 3 payments and only to tell the homeowner that they must start over because one form was incomplete or missing a signature or comma.
For homeowners who already in foreclosure any loan modification should occur as part of a written settlement agreement reviewed by the homeowner’s legal counsel. Before the homeowner pays one thin dime, the homeowner must know what performance on their part will result in the dismissal of the bank’s case and the amount of interest rate and loan balance reduction they will receive in return for their resumption of monthly mortgage payments.
Homeowners who made three HAMP payments and did not receive a permanent modification should consult a licensed attorney to evaluate if the homeowner has a claim for either fraudulent inducement or breach of contract. Our firm is litigating against Litton and Bank of America for breaching a loan modification agreement. Homeowners with further questions about this issue my inquire by e-mail to foreclosuredefenselaw@gmail.com
Monday, December 21, 2009
Does my case need a foreclosure defense attorney
It is not necessary to hire an attorney in every Florida Foreclosure Case. Some homeowners in some circumstances do not need a lawyer, if they know how to deal with the lender and lenders attorney in a professional manner and commit to putting everything in writing in case things go wrong and they need to hire counsel later on.
Our new video blog entry discusses this further. Please click the link to see our new video on you tube.
Our new video blog entry discusses this further. Please click the link to see our new video on you tube.
Wednesday, December 2, 2009
Homeowner Gets Free House after IndyMac Bank Fails to Mediate in Good Faith
Daily Business Review, writer Vesselin Mitev reports that Suffolk County, N.Y. Judge Jeffrey A. Spinner, has judicially canceled the mortgage on homeowner Dana Yano-Horski’s home. The action was taken to sanction the lender’s “Unconscionable, vexations and opprobrious conduct” in its attempt to foreclose on the property.
Under applicable state law IndyMac was required to mediate with the homeowner before competing a foreclosure action. Judge Spinner was quoted as finding it “deeply troubling” that IndyMac spurned what would have been a “win-win” solution for all parties. Instead of negotiating the bank engaged in “harsh, repugnant, shocking and repulsive” treatment of the homeowner.
After the homeowners attempts to obtain mediation Judge Spinner ordered a bank representative to attend a mediation conference in September. At the mediation IndyMac loss mitigation manager Karen Dickinson “made it abundantly clear that that no form of mediation, resolution or settlement would be acceptable” to the bank.
The bank asserted that the borrower had previously defaulted on a forbearance agreement. The Court found that IndyMac never sent out the forbearance agreement. Judge Spinner noted “Defendant, through plaintiff’s duplicity found herself in the unique and uncomfortable position of being placed in default of the ‘agreement’ even before she had received it.”
Judge Spinner did more than just dismiss the lawsuit. If the lawsuit was dismissed without prejudice IndyMac could have re-filed the lawsuit and repeated in wrongful conduct. Judge Skinner concluded that the original principal of $292,500 “should be canceled, voided, and set aside.” The Judges order bars any attempt to collect on the note.
The Foreclosure Lawyers at Shuster & Saben applauds Justice Jeffrey Skinner’s courage. In Florida several counties including Dade County, Palm Beach County, Indian River County, and Brevard County have implemented mandatory mediation when the subject property is the homeowner’s primary residence. In a significant number of cases, particularly when homeowners are unrepresented some lenders attempt to avoid mediation or fail to mediate in good faith. In both Dade County and Indian River County our firm has moved for sanctions against lenders who fail to mediate in good faith.
Under applicable state law IndyMac was required to mediate with the homeowner before competing a foreclosure action. Judge Spinner was quoted as finding it “deeply troubling” that IndyMac spurned what would have been a “win-win” solution for all parties. Instead of negotiating the bank engaged in “harsh, repugnant, shocking and repulsive” treatment of the homeowner.
After the homeowners attempts to obtain mediation Judge Spinner ordered a bank representative to attend a mediation conference in September. At the mediation IndyMac loss mitigation manager Karen Dickinson “made it abundantly clear that that no form of mediation, resolution or settlement would be acceptable” to the bank.
The bank asserted that the borrower had previously defaulted on a forbearance agreement. The Court found that IndyMac never sent out the forbearance agreement. Judge Spinner noted “Defendant, through plaintiff’s duplicity found herself in the unique and uncomfortable position of being placed in default of the ‘agreement’ even before she had received it.”
Judge Spinner did more than just dismiss the lawsuit. If the lawsuit was dismissed without prejudice IndyMac could have re-filed the lawsuit and repeated in wrongful conduct. Judge Skinner concluded that the original principal of $292,500 “should be canceled, voided, and set aside.” The Judges order bars any attempt to collect on the note.
The Foreclosure Lawyers at Shuster & Saben applauds Justice Jeffrey Skinner’s courage. In Florida several counties including Dade County, Palm Beach County, Indian River County, and Brevard County have implemented mandatory mediation when the subject property is the homeowner’s primary residence. In a significant number of cases, particularly when homeowners are unrepresented some lenders attempt to avoid mediation or fail to mediate in good faith. In both Dade County and Indian River County our firm has moved for sanctions against lenders who fail to mediate in good faith.
Monday, November 16, 2009
Shuster & Saben Seek Sanctions against Bank of America on behalf of Sebastian, FL homeowner
For Immediate Release: On Tuesday, November 17, 2009, Shuster & Saben served a Motion For Sanctions against Bank of America, N.A. for failing to mediate in good faith with a Sebastian, Florida homeowner. The firm’s client, an elite estates and trusts paralegal (who spent over twenty years working with some of South Florida’s top law firms) attended mediation, in Vero Beach, pro-se, prior to hiring the foreclosure defense litigation department of Shuster & Saben, LLC.
Under the Administrative Order of 2009-01 of Indian River County Chief Judge Willaim Roby, lenders seeking to foreclose on the primary residence of Indian River County homeowners are required to conduct mediation prior to moving for summary judgment. Under the administrative order, the lender must have its counsel appear in person and a representative of the plaintiff/lender may appear by phone or in person. The administrative order requires that individual appearing for the lender must have “full authority to modify the existing loan and mortgage and to settle the foreclosure case.”
Prior to the mediation, the lender’s law firm, Kahane & Associates of Plantation, Florida filed a “Form A” identify Krystal Martin as the respresenative of the lender who would appear at the mediation. The subject homeowner, via federal express provided pertinent financial documents, a release of her tax returns, and a hardship letter to the loan servicer, Litton, so that Litton and Bank of America could evaluate modification of the loan prior to the mediation.
According to the firm’s client, when the mediation commenced for the first 30 minutes of the mediation Bank of America had no representative what so ever. The person listed on the “Form A”, Krystal Martin never appeared for the mediation and in her place, a representative of Litton, the servicer on the loan appeared by phone. Since the person appearing was not a Bank of America employee but only a employee of the loan servicer hired by Bank of America, it was apparent that the representative had no authority to do anything without talking to the lender. When the mediation began the Litton representative did not know the current balance on the loan. The lender’s attorney who signed the “Form A” did not bother to attend the mediation. In her place was a local Vero Beach attorney, Nina Ferraro, who is NOT an employee of Kahane & Associates (the law firm hired by Bank of America to bring the foreclosure). Ms. Ferraro had no prior involvement in the case and also did not have the borrower’s current balance.
Under the Administrative Order of 2009-01 of Indian River County Chief Judge Willaim Roby, lenders seeking to foreclose on the primary residence of Indian River County homeowners are required to conduct mediation prior to moving for summary judgment. Under the administrative order, the lender must have its counsel appear in person and a representative of the plaintiff/lender may appear by phone or in person. The administrative order requires that individual appearing for the lender must have “full authority to modify the existing loan and mortgage and to settle the foreclosure case.”
Prior to the mediation, the lender’s law firm, Kahane & Associates of Plantation, Florida filed a “Form A” identify Krystal Martin as the respresenative of the lender who would appear at the mediation. The subject homeowner, via federal express provided pertinent financial documents, a release of her tax returns, and a hardship letter to the loan servicer, Litton, so that Litton and Bank of America could evaluate modification of the loan prior to the mediation.
According to the firm’s client, when the mediation commenced for the first 30 minutes of the mediation Bank of America had no representative what so ever. The person listed on the “Form A”, Krystal Martin never appeared for the mediation and in her place, a representative of Litton, the servicer on the loan appeared by phone. Since the person appearing was not a Bank of America employee but only a employee of the loan servicer hired by Bank of America, it was apparent that the representative had no authority to do anything without talking to the lender. When the mediation began the Litton representative did not know the current balance on the loan. The lender’s attorney who signed the “Form A” did not bother to attend the mediation. In her place was a local Vero Beach attorney, Nina Ferraro, who is NOT an employee of Kahane & Associates (the law firm hired by Bank of America to bring the foreclosure). Ms. Ferraro had no prior involvement in the case and also did not have the borrower’s current balance.
Tuesday, November 3, 2009
Shuster & Saben obtains Dismissal of Foreclosure Action
For Immediate Release:
The law firm of Shuster & Saben has obtained the dismissal of a foreclosure lawsuit filed against the firm’s Brevard County client. The Plaintiff / Lender filed suit against our client in an attempt of take their Cocoa, Florida investment property. In the subject action, after the lender drastically raised our client’s interest rate (to well over 8% A.P.R.), our client was unable to continue to afford to make monthly mortgage payments. Our client had financed the property with an A.R.M. (Adjustable Rate Mortgage) that was linked to the LIBOR index, and faced an increase in their interest rate after their initial rate expired. Despite the fact that interest rates declined from 2007 to 2009, the lender still raised the client’s interest rate to a point that it was no longer affordable. Several months after the client stopped making mortgage payments the lender filed a Notice of Lis Pendens and a Complaint for Foreclosure in the Brevard County Circuit Court.
The client consulted with several other Space Coast attorneys before choosing Shuster & Saben to defend the foreclosure action. After Shuster & Saben filed its notice of appearance and voluminous discovery requests the lender decided to dismiss the case and cancel the lis pendens. Counsel for the lender advised that the lender has decided to write off the loan. To view the actual Notice of Dismissal click here.
The law firm of Shuster & Saben has obtained the dismissal of a foreclosure lawsuit filed against the firm’s Brevard County client. The Plaintiff / Lender filed suit against our client in an attempt of take their Cocoa, Florida investment property. In the subject action, after the lender drastically raised our client’s interest rate (to well over 8% A.P.R.), our client was unable to continue to afford to make monthly mortgage payments. Our client had financed the property with an A.R.M. (Adjustable Rate Mortgage) that was linked to the LIBOR index, and faced an increase in their interest rate after their initial rate expired. Despite the fact that interest rates declined from 2007 to 2009, the lender still raised the client’s interest rate to a point that it was no longer affordable. Several months after the client stopped making mortgage payments the lender filed a Notice of Lis Pendens and a Complaint for Foreclosure in the Brevard County Circuit Court.
The client consulted with several other Space Coast attorneys before choosing Shuster & Saben to defend the foreclosure action. After Shuster & Saben filed its notice of appearance and voluminous discovery requests the lender decided to dismiss the case and cancel the lis pendens. Counsel for the lender advised that the lender has decided to write off the loan. To view the actual Notice of Dismissal click here.
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