Litigating Foreclosure Rescue Scams
Public interest attorney Phillip Robinson, Executive Director for Civil Justice, Inc., has an article directed to attorneys appearing on the website of the Maryland State Bar Association. In it he poses a scenario involving a client in dire straits who approaches an attorney. The client "has little money, owns a home, recently lost his job, has mounting unsecured debts and just received an eviction notice from the District Court of your county." The client wants to know why he is being with eviction when he owns his home.
Robinson encourages that "a little further investigation of the facts may yield new remedies for your client worthy of their consideration – as well as a statutory attorney fee award."
He goes on to describe the nightmare of an 83-year-old Maryland woman in poor physical health whose monthly income was about $1,300 and who had about $200,000 in home equity when she signed away her home to a foreclosure rescue operator. After taking the operator to court and winning, the Court awarded her over $10,000 in actual damages and $500,000 in punitive damages.
He points out that the Maryland anti home equity theft statute (Protection of Homeowners in Foreclosure Act of 2005) criminalizes some activities commonly found in these scams and also provides a treble damages award to victims when the foreclosure rescue operator willfully or knowingly violates the statute plus reasonable attorney's fees.
The article concludes by suggesting that while the Maryland anti home equity theft statute exempts from liability many settlement service providers connected with the transaction, those such as real estate agents, title insurers, settlement firms and others facilitating the transaction could nevertheless face certain liabilities based on their other legal obligations.
For more, see Litigating Foreclosure Rescue Scams (An Emerging Area of Consumer Law)
In those states that do not have an anti home equity theft statute, the attorney representing the foreclosure rescue scam victim may have to find remedies for their client in their state's unfair and deceptive trade practices statutes, which typically provide for statutory attorneys' fee awards, or if applicable, in the Federal statutes (ie. Truth In Lending Act (TILA) and/or the Homeowners Equity and Protection Act (HOEPA), which also provide for statutory attorney fee awards). And, as I have mentioned in the past, prevailing on claims of state law violations could also entitle the plaintiff and counsel to a fee enhancement by the application of a contingency fee risk multiplier, depending on the law of your home state (see South Florida Homeowner Victimized By Foreclosure Rescue Operator - then search for the term "multiplier").
.
Robinson encourages that "a little further investigation of the facts may yield new remedies for your client worthy of their consideration – as well as a statutory attorney fee award."
He goes on to describe the nightmare of an 83-year-old Maryland woman in poor physical health whose monthly income was about $1,300 and who had about $200,000 in home equity when she signed away her home to a foreclosure rescue operator. After taking the operator to court and winning, the Court awarded her over $10,000 in actual damages and $500,000 in punitive damages.
He points out that the Maryland anti home equity theft statute (Protection of Homeowners in Foreclosure Act of 2005) criminalizes some activities commonly found in these scams and also provides a treble damages award to victims when the foreclosure rescue operator willfully or knowingly violates the statute plus reasonable attorney's fees.
The article concludes by suggesting that while the Maryland anti home equity theft statute exempts from liability many settlement service providers connected with the transaction, those such as real estate agents, title insurers, settlement firms and others facilitating the transaction could nevertheless face certain liabilities based on their other legal obligations.
For more, see Litigating Foreclosure Rescue Scams (An Emerging Area of Consumer Law)
Editor's Note
In those states that do not have an anti home equity theft statute, the attorney representing the foreclosure rescue scam victim may have to find remedies for their client in their state's unfair and deceptive trade practices statutes, which typically provide for statutory attorneys' fee awards, or if applicable, in the Federal statutes (ie. Truth In Lending Act (TILA) and/or the Homeowners Equity and Protection Act (HOEPA), which also provide for statutory attorney fee awards). And, as I have mentioned in the past, prevailing on claims of state law violations could also entitle the plaintiff and counsel to a fee enhancement by the application of a contingency fee risk multiplier, depending on the law of your home state (see South Florida Homeowner Victimized By Foreclosure Rescue Operator - then search for the term "multiplier").
.
posted by Home Equity Theft Reporter at 12:03 AM
<< Home