Legal Malpractice

Will Foreclosure Cases Morph into Legal Malpractice

By (Andrew Lavoott Bluestone)

There is a traditional cadence to the start of a legal malpractice case.  First comes a dispute, retention of an attorney, initial success, then a downturn into failure followed by a legal malpractice case.  With the real estate market very troubled, and foreclosures on the rise, a prediction of legal malpractice/foreclosure actions is warranted. Here is one such possibility.Greenpoint Mtge. Funding, Inc. v Valentin ; 2009 NY Slip Op 50002(U) ; Decided on January 5, 2009 ; Supreme Court, Kings County ; Lewis, J.  
 

Defendant home owner had several opportunities to fix the foreclosure situation, but failed in the end to stave off the foreclosure sale.There is a tantalizing clue that an attorney was retained and was unable to fix the situation.

"Calixte Valentin, one of the named defendants herein, has moved this court by Order to Show Cause, dated the 2nd day of October, 2008 to vacate the judgment of foreclosure auction and sale of his home, located at 3510 Avenue L, Brooklyn, NY, and to void and reverse the transfer of title to said premises from Rafael Badalov, the successful bidder at the mentioned sale, to him and his wife, Marie Valentin. Mr. Valentin represents that he and his wife executed a Greenpoint mortgage on the subject property for $93,750.00 on December 16, 1992 on which a foreclosure action was commenced in 2006. In October of said year, a reinstatement letter was received by him calling for payment of $11,045.49 ($9,806.75 in loan defaults plus $1,238.74 in legal fees) to restore the mortgage, which sum he withdrew from his checking account and sent to plaintiff's attorneys on November 18, 2006. Approximately six weeks later the check was returned to him, whereupon he and his wife consulted with an attorney who advised them that he was in contact with Greenpoint's lawyer. Thereafter, he ceased receiving monthly mortgage statements, and thereafter received court documents which were turned over to the lawyer that he had retained whom he assumed was negotiating a payment plan with the bank until receiving notice that a foreclosure sale had taken place and the property deeded over to Rafael Badalov on or about June 13, 2008. "
 

Might we be seeing a legal malpractice case now that the house has been sold, and the owner won't take his surplus funds? "In addition, counsel[ for the foreclosure sale purchaser] stresses the injustice of the current situation in that although his client acquired title to the subject premises on June 13, 2008, is making monthly payments of $2,620.00, the defendant and his family continue to occupy the premises without paying rent or use and occupancy despite the fact that surplus funds of $213,569.91 are due him from the auction sale
 

Full post as published by New York Attorney Malpractice Blog on January 12, 2009 (boomark / email).