Loan Modification

Killing Two Birds With One Stone: Attack The Consumer Attorney While Benefiting Creditors

By Karen Oakes, Southern Oregon Mortgage Law Attorney

I am a member of the American Bankruptcy Institute, a national organization of bankruptcy attorneys, trustees, and judges.      I have maintained my membership even though the organization seems to be comprised mainly of Chapter 11 attorneys and creditor attorneys as I feel that it is important to have a balanced membership and consumer advocates in any organization.   However, the  Dec/Jan 2010 issue of the ABI Journal has article entitled “Deepening Insolvency in Consumer Bankruptcy:  A New Twist On A Once-forgotten Theory,”  which causes me to pause and reconsider whether it is possible to have a balanced membership given the publication of this article.   (Unfortunately, the article is not available online unless a member of ABI.) 
 
The author, Jack Mitrani is a Ft. Lauderdale atty with Ben -Ezra & Katz PA.   Mitrani encourages applying the theory of a tort of deepening insolvency from a Chapter 11 case, Investor Funding Corporation of New York Securities Litigation (Bloor v. Dunsker, 523 F. Supp 533 (SDNY 1980), to consumer bankruptcy attorneys who defend foreclosure actions…..for bankruptcy trustees.   His thoughts are that the atty has breached their fidicuiary duty to the client by increasing needlessly the amount of  unsecured debt and also debt incurred to defend the foreclosure action.  He encourages trustees to consider going after the consumer attorney.
 
He incites by citing a 7/2008 Miami Herald article quoted by a ranting raving guy at http://www.nobleamericans.blogspot.com/ which not surprisingly quotes an attorney who blames the consumer attorney for creating the problem in Florida.    The not surprising part is that the quoted attorney’s last name is Ben-Ezra, which happens to be the same name as the law firm for which Mr. Mitrani works. 
 
                             NO FREE RIDE

Marc Ben-Ezra, who also files foreclosures statewide for lenders, said the borrower who seeks to delay the inevitable can face consequences.

Interest rates and other costs continue to pile up as the process drags on. Borrowers could be liable for the difference between what the lender recoups from the eventual home sale and the amount owed on the loan. Plus, homeowner and condo fees aren’t being paid, which places hardships on people who are paying their debts.

”With every single day that goes by, they could be helping their clients get into bigger and bigger debt, rather than if they face the problems head on and resolve them as quickly as possible,” Ben-Ezra said.

Given that home ownership is the American Dream, sought for and fought for by many, advising bankruptcy professionals to attack attorneys who are willing to assist those homeowners in financial distress and pending foreclosure attempt to keep their homes—this article promotes the concept that attorneys are the underbelly of the universe.

Related posts:

1. Texas Attorney General Proposes Mortgage Deferment Legislation
2. Massachusetts Foreclosures Under Attack
3. Here’s Who Supports Lifting the Ban on Judicial Modification of Home Mortgages

Full post as published by Mortgage Law Network on January 11, 2010 (boomark / email).