Consumer Law

WSJ blames evil consumer lawyers

By Alan White

By Alan White

Although the Wall Street Journal has provided some excellent coverage of the foreclosure crisis, this story by Robbie Whelan (via Naked Capitalism rebuttal) is pure drivel.  The ludicrous premise is that a coterie of clever consumer lawyers have contrived to keep deadbeat homeowners out of foreclosure by raising silly technicalities.  Never mind that the case used as an illustration involved a homeowner whose timely payments were improperly refused by GMAC Mortgage, and is still in litigation. 

While I try, not always successfully, to provide dispassionate commentary about the foreclosure crisis, these attacks on the legal services lawyers and private practitioners who I know well make my blood boil.  These lawyers are the heroes of this crisis.  They are devoting countless hours not only to finding fraudulent affidavits, but also and more importantly to decoding servicer payment histories, endlessly resubmitting modification paperwork, trying to enforce bankruptcy plans, and getting servicers to acknowledge their own shockingly frequent errors.  Most of these consumer lawyers earn far less than their counterparts in the foreclosure mills and white shoe firms who are obsequiously protesting that banks can do no wrong. 

I know of not a single consumer lawyer who has any interest in representing a homeowner who is unwilling or unable to make payments.  Many homeowners are in foreclosure due entirely to servicer errors, such as double charging for insurance or misapplying payments.  Hundreds of thousands of homeowners in foreclosure not only want to pay but are paying in temporary HAMP and other plans right now.  They just want someone at their mortgage company to listen, and to accept their payments and get them out of foreclosure.  Modifications, contrary to popular belief, almost never involve ANY forgiveness of debt.  At best, modifications are giving them a temporary reduction in interest rates.  Our debtors are not even asking to be forgiven, they are simply asking to be heard before their homes are taken.  Now that the Attorneys General, and even the Cabinet and the media, are listening, the WSJ wants to shoot the messengers.   

The foreclosure crisis is a result of banks and Wall Street making and buying loans that were poorly underwritten.  It is being made worse month after month due to massive servicer (i.e. Big Bank) inability either to work out salvageable loans or to transfer and foreclose mortgages properly.  Hats off to the consumer lawyers who comfort the afflicted while the Journal comforts the comfortable.

Full post as published by CL&P Blog on October 21, 2010 (boomark / email).