Mortgage foreclosure defense has become a good business for attorneys. Many real estate attorneys who made money on real estate closing and putting together large real estate investment deals have found that most of their business in the past few years has come from clients wanting to defend against bank foreclosures and suits on personal guarantees of commercial loans. As in any area of law there just a few attorneys with special experience and credentials which enables them to do the best work. This past week I met an attorney (name withheld upon request) who seems uniquely qualified to defend bank collections of large real estate debt.
This individual formerly worked for a government task force which prosecuted banks for improper lending practices. His government agency enforced actions against lenders for their violations of the many technical regulatory requirements and consumer protection rules applicable to mortgage or commercial. He uses this experience today in private practice to defend bank lawsuits by raising technical defenses based on the bank’s failure to comply with same applicable rules and regulations he previously enforced on the government’s behalf. He states that there are so many rules and regulations applicable to bank lending that in almost every loan or guarantee the plaintiff bank is in violation of some government requirement. He said he can find a bank violation in almost every bank lawsuit and use the violation as an effective defense or even threaten the bank with a counter-claim.
Most real estate attorneys I know can delay, but ultimately never win, bank collection suits. This attorney described above is the first one I found with the legal knowledge and experience to give the borrower a chance of victory and real negotiating power. I’m sure he’s not the only attorney with this experience. Perhaps borrowers should search out attorneys with experience as bank regulators and prosecutors to defend bank lawsuits. These attorneys will not be inexpensive, but its worth the money if they can find significant legal defenses against bank deficiency claims and collection lawsuits.
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