FRIVOLOUS DEFENSE TO FORECLOSURE CAN COST BORROWER $$$
Thinking of trying to delay or forestall a foreclosure by hiring one of the "specialists" you hear on the radio? You know, the "For only $1.00 we will erase your mortgage, destroy the bank and take twenty years off your age" ads? Think again! Richard Zaretsky excellent article tells the truth behind and possibility for damages of trying to manipulate the system unnecessarily. This case may have been in Florida, but all law is based upon precedent...I expect we will see more situations like this. Thanks Richard for this excellent post!
A mid June decision by an appellate court in Florida, the trial court was upheld in sanctioning defense counsel and borrower in a foreclosure action for filing frivolous and unsupported mortgage foreclosure affirmative defenses that delayed resolution of the case. The court awarded over $20,000 in attorney fees against the defense counsel and another $18,000 in "delay damages" (which was mostly interest on the mortgage note).
Florida statutes require that the $20,000 be split 50/50 with the defendant borrower and the attorney was responsible for all of the "delay damages" (and this most certainly will end up as a malpractice action against the attorney for the borrower's $10,000 liability). The case can be found at Korte v. US Bank Nat. Ass'n, --- So.3d ----, 2011 WL 2200678 (Fla. 4th DCA 2011) and is a relatively easy "must read".
Unfortunately, just like the "foreclosure factories" used by the lenders, borrowers are reading about miraculous delays and even some "wins" regarding the "staying in your home without paying your mortgage" popular "solution" to having the value of their home be more than the amount of the mortgage indebtedness. Defense attorneys find it more expedient to also follow the "factory protocol" of throwing the kitchen sink of defenses into every case.
I represent both borrowers and lenders. Such kitchen sink defenses are too common, such as the suit to foreclose a commercial loan on a horse training facility in Lee County with no home located on it. The defense counsel brought Truth in Lending and RESPA defenses. Neither of these rules and laws apply to commercial loans. As in the Korte case, we brought in the motion for attorney fees and damages under section 57.105 of Florida Statutes. My case eventually settled, so we never reached the merits of the issue discussed in the Korte case. But it is good to know that we would have prevailed.
But the problem here isn't just the attorneys - it is that Borrowers should be realistic and not make demands upon counsel that don't make sense. Yes, it is the Borrower's attorney that needs to guide the Borrower to those realistic expectations. Borrower defense counsel should also provide representation that is legally required and legally supported and ......... is designed for not just a short term, but a long term solution for the client. For example, see my article FORECLOSURE DEFENSE FALLACY .
Throwing in the kitchen sink of defenses against the wall to see what sticks is not proper legal representation.
Copyright 2011 Richard P. Zaretsky, Esq.
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Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 email: RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com NEW Website www.Florida-Counsel.com.
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