A few months ago, the New York Times ran a piece on “mass joinder foreclosure lawsuits.” This is a type of scam that is designed to ensnare underwater homeowners and rob them of what little they have left. What is this? A mass joinder lawsuit is a type of class action lawsuit. In the foreclosure context, they occur when a group of homeowners band together to sue their lender with the goal of compelling the lender into mass loan modifications or stopping foreclosure.
Now for how the scam works: A group claiming to be a law firm (they’re not) mails out solicitations to homeowners they know or suspect have underwater mortgages, are in default, or are on the precipice of foreclosure. The group pitches the homeowners the alleged benefits of the mass joinder lawsuit, namely interest rate reductions, principal reductions, foreclosure moratoriums, monetary damages, and even getting the bank to deliver them title to their properties free and clear of any mortgage obligations. This just doesn’t happen in the real world. However, there is a catch: unlike honest class action lawsuits, the mass joinder requires the plaintiffs to pay the “firm” before they can join. Sometimes they ask for up to $10,000 in legal fees. Really! Then, of course, they do nothing, vanishing without a trace.
The Federal Trade Commission (FTC) claims that sometimes, the mass joinder firms do have an actual attorney on their payrolls. Naturally, this lawyer doesn’t look over any of the “client’s” mortgages, and in many cases he or she isn’t even licensed to practice law in the state in which the plaintiff-mortgagor is located, even though this violates FTC rules. In other situations, the homeowners call the number listed and speak with unqualified sales representatives who give out bad information or make otherwise deceptive claims about their level of expertise.
Being underwater in a mortgage is rough, but giving money to a mass joinder racket can really set you back. It’s much wiser to consult with an experienced bankruptcy attorney.
For more questions about mass joinder scams, bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn NY foreclosure attorneys Bruce Weiner for a free initial consultation.