Lawyer solicitation for foreclosure defense, or ... ?

[Judge Roy Bean]

Something doesn't sound right ... particularly the idea that someone having difficulty with a servicer and facing foreclosure is supposed to have money laying around with which to pay a purported "NAFDA-certified" attorney.

The basic legal retainer for NAFDA-certified attorneys to prosecute a qualified case will run into the thousands of dollars as an initial retainer and $1000 per month or more depending on the value of your home. The initial retainer and the monthly legal fees cannot possibly cover the total cost of foreclosure defense litigation. Consequently, a performance contingency is required of 20% to 30% of the appraised value of your home at the time you win your case or of the savings created from loan modification/principle reduction negotiations.

The legal retainer can be apportioned over 2-3 months if you are barely in default and all of it is required if your trustee sale is imminent. If you cannot meet the foregoing requirements, we sympathize with your situation and apologize that we cannot assist you

Does that not seem to be a way to get around the advance-fee prohibitions for mortgage modification "counselors."

The attorney's office at that address is one for a very active attorney in these kinds of issues, but I'm wondering if anyone else knows anything about NAFDA. (Some of the Google results require looking at the cached versions of pages that are no longer up.)

[ArthurWankspittle]

Are they side-stepping the "no up front" part by taking something in the way of a fee at an intermediate stage in the process?

...at the time you win your case or of the savings created from loan modification/principle reduction negotiations.

"at the time you win your case" is presumably pretty much the end game.
"savings created from loan modification etc. " sounds more suspicious. As in, the first thing we will do (at any cost) is negotiate a loan modification (so you can pay us). Arguably, they will have done something tangible for the client at this point, but in terms of net benefit it may be zero.

[Prof]

Also, some of these firms advertise in Texas but know nothing about Texas law. To ask for a contingent fee based on the value of the home, and secured by the home, violates the Texas statutory and constitutional limitations as to allowed liens against the homestead.

The only way I or any attorney in Texas could be assured of payment for defense of a mortgage foreclosure on a homestead would be an "up front" retainer. The closest alternative would be a chapter 13 bankruptcy, with attorney's fees to be paid over time from the Debtor's income.

In a non-judicial foreclosure state, like Texas, the chapter 13 automatic stay would also avoid the costs of trying to get an injunction agains the foreclosure.

[davids]

I somehow doubt any of their lawyers ever saw a contingency fee...

[davids]

Something doesn't sound right ... particularly the idea that someone having difficulty with a servicer and facing foreclosure is supposed to have money laying around with which to pay a purported "NAFDA-certified" attorney.

I will comment that there is such a thing as a "mortgage defense" bar. There are legitimate practitioners that handle cases in this area, and there is a body of substantive law that has developed out of these litigated cases. These few are outnumbered unfortunately by loan mod shops and high volume practitioners who though they aren't trying crazy legal ideas, are essentially selling their own brand of false hope by telling every Tom, Dick and Harry that they have a good case and that they can beat the bank.

The good cases are few and far between, and even those aren't something that any sane attorney would handle on a contingency. A good case is one where 1) the foreclosure was bad - a) it didn't follow the procedural requirements for foreclosure, or b) the homeowner shouldn't have been foreclosed upon, or c) there was loan origination fraud that isn't barred by statute of limitations arguments...2) there is lost equity in the home...3) there is a homeowner who isn't a complete flake and who can front the costs, possible bond or "tender" if one is trying to stop a foreclosure of a past due amount, and some amount of fees up through trial. These are all rare cases.

The average dude, upside down in a condo, who turns over all his couches, crawls under the car seats, and borrows from grandma to barely squeak in the door with $2,500, isn't going to be able to see it through.

The amount of fees paid is often telling. One common element of the scams I see, as well as the exploitations of bad lawyers that I see, is that the amount of fees paid is both too large to pay for 'nothing' and too small to come close to being enough to properly litigate the matter.