With No Funds for Lawyers, Brooklyn Homeowners Must Represent Themselves

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By Stephen Witt

The calendar posted outside the courtroom Wednesday in the Brooklyn Civil Supreme Court lists page after page of foreclosures; a total of 79 separate cases will be heard on this morning alone. (See map of 4,000 homes in foreclosure in Brooklyn.)

The plaintiffs are all corporations, mostly large U.S. banks with familiar names like Wells Fargo and Citigroup and JPMorgan Chase. The calendar lists the banks’ attorneys, a cottage industry of freshly-minted law school grads who work on a per diem basis to chase down money so recklessly lent during the housing bubble.

The defendants are individuals, homeowners from Brooklyn who are facing the loss of their homes. The calendar lists their attorneys as well, often a name from a non-profit legal aid society. But take a closer look, and you’ll see something surprising. In nearly half the cases, the attorney’s name is the same as the defendant.

With the legal aid societies overwhelmed by foreclosure clients, and the court system buried in housing paperwork, an increasing number of at-risk homeowners have no choice but to hire the cheapest lawyer around: themselves.

Legally, the concept is known as “pro se”, translated from the Latin as “for oneself.” A typical pro se defendant is Sharon Robinson, who has come to the court on this day in an attempt to block foreclosure proceedings on her Canarsie home.

“I can’t afford a lawyer,” she says. “I have to do this myself.”

Robinson is a small woman in a puffy coat who carries her legal documents in a Key Foods shopping bag. She works as a pastry chef for a catering company in Manhattan and has no legal background.

Robinson is attempting to qualify for a loan modification, under a program offered by the Obama administration.

“It’s a drawn-out process,” says Robinson. “The banks are not really willing to help.”

If she can correctly navigate 30 pages of paperwork in less than 90 days, she might be able to legally force the mortgage servicer to reduce her rates. But she’s up against a nightmare of bureaucracy, and though this is her sixth time in court, she still hasn’t got the paperwork filed.

“It’s virtually impossible to fill out these papers correctly, even with a lawyer,” says Lewis Douglass, a judicial hearing officer. He estimates there are nearly 15,000 cases currently filed in the system, and they’ll take years to clear. Douglass, a spry, dapper man with combed-over shock white hair, is a former judge who has come out of retirement to help clear its backlog of foreclosure cases.

Laurie Izutsu, a lawyer and housing advocate with South Brooklyn Legal Services, says there is little Legal Services can do to help untrained homeowners like Robinson.

“We’re seeing a lot of cases like this,” she says. “We can help them on background, but in the court they’re on their own. “

Legal Services publishes a pamphlet to guide homeowners through the foreclosure process. Entitled “How to Answer A Foreclosure Complaint ‘Pro Se’ (Without an Attorney),” the pamphlet provides defendants like Robinson with sample court filings, registration deadlines and the basics of preparing a legal defense.

Locations of over 4,000 homes that went into foreclosure in Brooklyn in 2009 (Courtesy of NEDAP).

Locations of over 4,000 homes that went into foreclosure in Brooklyn in 2009 (Courtesy of NEDAP).

Even with a lawyer, Robinson’s case would be a tough one. She bought her home in Canarsie in early 2007 for $650,000, funded entirely by two adjustable-rate mortgages with no down payment. The interest on her loans quickly ballooned, and she now owes a whopping $5,000 a month in mortgage payments, but makes only $42,000 a year.  She supplements her income by renting out the first floor of the house. But even if she wins an aggressive modification discount she still will be contributing over half her net income to service the debt.

“I’ve thought about leaving the house,” she says. “I’ll put it out on short sale if I have to.”

Not all pro se defendants are so desperate. Zia Chaudry bought his house in Bensonhurst for $540,000 in 2004 with a 10 per cent down payment, supplemented by a fixed-rate mortgage from Chase. But lured by easy credit,  in 2006 he cashed in his equity, and then some, with an additional $150,000 credit line. Now he’s underwater; the total debt attached to his home is more than it is likely worth.

But, unlike Robinson, Chaudry has not intention of letting go. He’s making good money as a contractor, and thinks he can wait out the housing bust till the market recovers.

“The house was in bad shape,” he says. “I got that loan to renovate it. Now it’s nice. I’d even sell it for $650,000, if I could.”

In court, however, Chaudry seems lost. He immigrated to the United States from Pakistan in 1985 and his English isn’t perfect. Douglass, the retired judge who’s handling his case, explains his points slowly and repeats them with increasing impatience.

Chaudry could qualify for the modification program, if only he’d get the paperwork right. But the application is a forbidding 30-page morass of legalese.  In several places it requires notarized pay stubs, which cannot be more than 90-days old. Miss the 90-day window and you have to start all over again.

“I want to pay my loan,” says Chaudry. “I don’t want to take it to my grave.”

Complicating the modification program are the banks themselves, which often own the mortgages in complex collateralized trusts. A mortgage like Chaudry’s might have been sliced into several different cash flow streams and sold to investors around the globe. That makes tracking down the loan origination documentation difficult, and without those papers the loan can’t be modified.

“The banks have brought these foreclosure proceedings, but oftentimes you’ll find they don’t have the documents,” says William Davis, another judicial hearing officer. Davis, like Douglass, is a former judge who has come out of retirement to help the city clear its backlog of foreclosure cases.

Davis says pro se defendants, lacking legal experience, have a harder time tracking down their loan paperwork, which is difficult enough in any case. And until the loan is modified, the bank holds all the power.

“It’s hard to say if the banks are making this deliberately confusing, but you get suspicious,” says Davis.

4 Responses to “With No Funds for Lawyers, Brooklyn Homeowners Must Represent Themselves”

  1. Alessandro Machi
    December 10, 2010 at 5:04 AM #

    The no money down cases I think are harder to defend.

    However, why can’t the defendants take the position there can be no change in terms without their expressed written consent. Therefore, investor interference when it comes to getting a reduced mortgage rate for the homeowner should not be allowed by the courts.

    Change in terms of the original mortgage without the expressed written consent of the home buyer should not be allowed, this is a basic tenet of property law, is it not?

    http://www.swarmthebanks.com
    http://www.parallelforeclosure.com

  2. Barbara Ann Jackson
    December 14, 2010 at 12:18 AM #

    http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

    LAWYERS WHO FILE FORECLOSURES SHOULD ALSO BE INVESTIGATED

    Foreclosure lawyers are officers of the court; knowledge of applicable laws and civil procedure is not required from mortgage lenders, nor loan servicers. In states that require judicial foreclosures, lawyers are the ones who file lawsuits to seize and sell property; and lawyers are responsible for filing and recording foreclosure property deeds.

    Inadequate or questionable foreclosure leads to useless property deeds that impede real estate sales; title insurance companies reluctant to cover foreclosed properties; mortgage default claims are being disputed due to defective foreclosures. . .Sample of fraudulent foreclosures by certain foreclosure mills:

    –Deliberately utilize defunct lenders or lenders without “standing” to intentionally execute false foreclosure proceedings in civil as well as bankruptcy courtrooms.
    – Create and conceal malpractice, delaying foreclosures, engineer various litigations to generate billable legal fees.
    – Orchestrate sham foreclosure auctions; property never becomes acquired by lenders, but by ‘straw buyers’
    – Commit wrongs which are actionable (unfair debt collection, fraud, various torts) that give rise to lawsuits from property owners,
    – Engage in self-dealing foreclosures by which some lawyers gain for themselves foreclosed properties
    –Foreclosures via names of defunct lenders allow ’straw buyers’ illegally convey property deeds, flip real estate, and create blighted communities
    – Unconscionably create false deficiency judgments against property owners after straw buyers acquire homes for pennies on the dollar
    – Intentionally file Bankruptcy court “Motion to Lift” and “Proof of Claim” on behalf of NON-EXISTENT lenders, concealing fact of “non-secured” mortgage debt.
    –Involved in fraudulent collection of property damage and mortgage insurance for illegally foreclosed homes
    –Fraudulent foreclosures abet loss of property taxes to city revenue, rodents, vagrants, and blight. – Thousands of families are being made unlawfully homeless, scores of homes have been fraudulently flipped and communities are blighted from null foreclosure proceedings.
    **more: Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
    http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

  3. Barbara Ann Jackson
    December 15, 2010 at 3:00 PM #

    URGENT need for Lawmakers to take action! Scores of HOMEOWNERS DO NOT CONTEST FORECLOSURES BECAUSE:
    1. They don’t have knowledge of the law in order to recognize which aspects of foreclosure are legally challengeable or even fraudulent.
    2. And even those who identify wrongdoing lack funds to pay for attorneys to represent them.
    3. Homeowners are told to come to foreclosure auctions with $$$$$$$ that they do not have, SO THEY STAY AWAY from foreclosure auctions.

    These homeowners are oblivious about sometimes “straw buyers” and sometimes lawyers in charge of foreclosures, obtains ILLEGAL ownership of people’s homes; and pay literally nothing through “credit bids;” and that those recorded deeds from such auctions are null! For these very reasons, there needs to be a probe of lawyers who file foreclosures. http://chn.ge/eU2zAm

    Also, the average lay person doesn’t know about legal REQUIREMENTS of “standing” that prevents their homes from being repossessed via non-existent lenders or via lenders which have no ownership of promissory notes.

    Yet, COURTS ARE SUPPOSED TO ENFORCE STANDING and compliance with established laws! Illegal, defective, fraudulent foreclosures are the cause of useless property deeds for real estate sales; title insurance companies refuse coverage on foreclosed properties –and more!

    Further, after certain foreclosure auctions (via simulation) result in fraudulent – NOT LENDER ACQUISITIONS, by lawyers or straw buyers, the common scenario becomes property flipping, neighborhood blight, rodents, and so on!

    *MORE info: Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
    http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

  4. mass money makers warrior forum
    February 1, 2011 at 5:02 PM #

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