Financially challenged homeowners who are at risk of losing their homes can now rely on The Foreclosure Defense Group (FDG), a Rosemont, Ill.-based firm that matches clients to attorneys who can fight lenders in court and work to completely restructure mortgage loans in favor of the borrower.
It is estimated that over 80 percent of all residential loans since 2003 contain fraud and predatory lending violations. Adam Ackerman, who co-founded FDG with business partner Mark Laskowski, said this is an increasing fear among lenders, as evidenced by the fact that some major banking institutions like JP Morgan Chase, Bank of America and GMAC Mortgage are now halting thousands of foreclosures because they realize they may have issues with the way they filed the foreclosure, which can include falsifying documents, fraud and or predatory lending and a long list of other state and federal violations.
But instead of waiting and hoping for the lender to halt—and inevitably recommence—the foreclosure process on their own, FDG recommends the homeowner take proactive, assertive steps to ensure that a foreclosure is stopped for good or prevented from starting altogether.
Unlike loan modification programs offered through private or government entities that typically do not work, FDG attorneys take aggressive legal strategies to halt the foreclosure process and rework the loan terms. They use subpoenas, lawsuits, discovery and many more strategies to get the bank’s attention and let them know the homeowner means business—which, if litigated correctly, can result in reduced principle reduction, lower interest rates and even a completely new loan with terms that benefit the borrower.
“Only about 8 percent of all loan modification applicants get approved nationwide anyway, and of these less than 4 percent experience successful modifications,” said Laskowski. “Foreclosure defense attorneys believe in voiding the original agreement and demanding new terms.”
Ackerman and Laskowski were inspired to launch FDG after foreclosure proceedings began against Adam’s father Jack, who found himself unemployed three years back. Laskowski and Ackerman began researching Jack’s legal recourse and won a series of small victories against the mortgage lender until it reached a point where enlisting a team of lawyers was essential.
Ackerman and Laskowski realized that if suing the bank worked for Jack, it was bound to work for other distressed homeowners in the Chicagoland area. A new venture that eventually became Foreclosure Defense Group was born in fall 2009 after a network of specialized local attorneys decided to collaborate with Laskowski and Ackerman, who are careful to point out that they are not lawyers themselves. Instead, FDG acts as a marketing, outsourcing and educational firm for the attorney network they serve.
“The first thing an FDG attorney is going to do is conduct a forensic loan audit of all mortgage-associated documents to look for fraud, predatory lending violations and/or paperwork errors,” Ackerman said. “This institutes a ‘discovery’ process which involves requesting subpoenas and important documents and collecting depositions. Next, the attorney will use those findings and evidence to get the attention of the bank. They will tell them loud and clear that they can settle this the easy way or the hard way—it’s the bank’s choice.”
Foreclosure defense strategies offer homeowners two major benefits, added Ackerman. First, the attorneys’ efforts can buy the homeowner extra time, which can often be 12 to 24 months or longer, depending on the complexity of the case. During this time, the homeowner will remain in their home, providing an opportunity to save money and get back on their feet. Secondly, foreclosure defense attorneys can push for a settlement and insist on a new mortgage that the homeowner can afford.
The current statistics on foreclosures are staggering. According to a Lender Processing Services report issued in September, the total U.S. loan delinquency rate, which includes home loans past due at least 30 days, is nearly 10 percent. RealtyTrac reported that banks repossessed more than 95,000 American homes in August—a new record. Yet, only 5 out of 100 homeowners will put up a fight to keep their homes from being foreclosed upon, according to FDG attorneys. Ackerman estimated that 95 percent of all homeowners are not even aware that there are actual legal remedies and defenses they can pursue to safeguard their home from foreclosure.
Typically, said Laskowski, “a homeowner facing foreclosure will first try to refinance the loan with the lender, but often can’t qualify due to loss of income, lower credit scores, and decreased property values. Next, they may attempt a loan modification, but because banks are currently under-staffed and inefficient, this can take months, during which time the foreclosure may proceed. The last resort is often declaring bankruptcy, which may not resolve their foreclosure problem.”
Instead of waiting around hoping that the bank will work with you, “the homeowner must go on the offensive,” said Laskowski, who also invests in and manages real estate properties. “Your FDG attorney can file a counter suit against the lender, thus making the homeowner a counter-plaintiff instead of a defendant and turning the tables on the bank. Banks aren’t used to this strategy, and they usually determine that it’s better off settling with the homeowner instead of going to court and paying all those legal fees.”
If the bank is found guilty of fraud and predatory lending, this would have serious repercussions across the country as a new case precedent that other states would probably follow. Banks, noted Ackerman, cannot afford to let this happen.
When a new homeowner client contacts FDG, Laskowski or Ackerman screens the prospective client carefully based on a pre-determined list of questions provided by an attorney. If the necessary criteria are met, an appointment is set for the homeowner to meet confidentially for a free one-on-one consultation with an experienced attorney ideally suited to handle the case. While the expenses each attorney will charge can vary, the average monthly flat fee starts at approximately $750, the charges for which can include research, litigation, paperwork and more.
“Keep in mind that the program is very affordable compared to what the homeowner has been paying in principle, interest, taxes and insurance. The legal fees are probably a lot less than what the homeowner would normally be paying for their monthly mortgage. In my opinion, I would rather pay an attorney $750 per month to fight to keep me in my home for the next 12 to 24 months and protect my legal rights than rent an apartment for $750 per month,” said Ackerman.
Most homeowners never think about retaining an attorney because of the perceived expense of the attorney’s time. FDG attorneys, however, charge a small upfront fee for filing costs and loan audits but then charge a very affordable monthly retainer fee that will not fluctuate. This way, the client can count on top-notch service and not feel as if the clock is ticking very time they pick up the phone.
Energized by their achievements, Ackerman and Laskowski are preparing to launch FDG in six new markets before the end of 2010: California, New York, Florida, Texas, Nevada and Arizona.
“Each state handles real estate foreclosures differently. There are two types of states—judicial and non-judicial,” Laskowski said. “In the former, such as Illinois, a lender has to use the court system to foreclose upon a homeowner, which takes up to eight months on average. In the latter, such as Arizona, a foreclosure can occur within 90 days and the homeowner is forced to move out.”
Different strategies can be executed for non-judicial versus judicial jurisdictions. For example, declaring bankruptcy may be the best route for some in a state like Arizona, whereas filing counterclaims and tying up the matter in the courts may be the best approach in a state like New York.
Ackerman said the tactics that FDG attorneys employ today “were unheard of just two years ago. The banks aren’t used to being challenged. They commonly have a financially vested interest to push foreclosures, as banks often take out multiple insurance policies on their properties and the servicing companies for the banks can make more money in penalty fees incurred due to late mortgage payments.”
Most clients who find FDG “have already been turned down for a loan modification and exhausted all other possibilities,” said Laskowski. “At that point, you have to ask yourself—who is going to represent you best? If you have a heart problem, you see a cardiac specialist, not a foot doctor. When you have a loan problem that can lead to the loss of your home, you need the help of an aggressive, experienced lawyer who knows how to play hardball with these lenders.”
For more information about Foreclosure Defense Group, phone 630. 915.2076 or visit www.ForeclosureDefense.com.