Facing Foreclosure? Don’t Let This Happen To You

September 6th, 2010 by Reed Allmand

Bogus lawsuits designed to avoid foreclosure will not work. This needs to be said first, foremost and often because too many desperate and vulnerable homeowners facing foreclosure are falling prey to “debtor predators” who leech off of the deeply indebted just to make a profit.   This is what happened to 2,000 homeowners who were conned by attorney Mitchell Roth, who claimed he could stop foreclosure but only filed “frivolous and phony” lawsuits which left the homeowners with even more debt.

Homeowners paid $1,800 in upfront fees and at least $1,250 more each month, according to court documents. The homeowners also agreed to pay 50% of the cash value of any settlement Roth was able to reach, the documents said.

 

Roth filed lawsuits arguing that borrowers’ mortgages were invalid because they had been bought and sold so many times that the true ownership could not be determined.  Roth never showed up for any of the court hearings after filing the so-called foreclosure prevention lawsuits and as you can imagine that didn’t go well for the homeowners facing foreclosure. Not one of the 2,000 lawsuits filed by Roth had a judgment that was favorable to the debtor facing foreclosure.

But there is a bittersweet ending for the swindled homeowners.  Roth has agreed to pay $1 million in restitution to the foreclosure victims, which is about $500 per homeowner.  However the settlement is bittersweet because many of those homeowners have mostly likely already lost their homes to foreclosure and a few hundred dollars is not enough to cover their financial losses.