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< | -- By JonathanWaisnor - 13 Apr 2010 | | | | |
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< | Section I | | | Class Action Lawsuits to Enjoin Foreclosure: An Argument for Clinical Involvement | |
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Paper Title
-- By JonathanWaisnor - 13 Apr 2010 | | | | |
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< | On March 2, 2008, the Attorney General of Massachusetts obtained a preliminary injunction against Fremont Mortgage Group, a mortgage lending firm based in California that held approximately 3,000 loans in the Commonwealth of Massachusetts. This action was brought under the Massachusetts Predatory Loan Practices Act and the general consumer protection statute (Mass Gen Laws 93A). The injunction requires Fremont, or any company that purchased a loan from Fremont, to submit these loans for review to the Attorney General's office before foreclosure. Judicial bypass will only be granted on a case by case basis, and the cost to Fremont is so great that the practical effect of the law is a moratorium on foreclosures by this company, keeping 2200 people in their homes for the foreseeable future or allowing them to renegotiate the terms of their mortgages on very favorable terms. Since then, not a single mortgage involved in the lawsuit has been foreclosed upon. Investors and mortgage lenders in the Commonwealth are bracing for more lawsuits, some are threatening repercussions in the form of reduced business in the Commonwealth, in a move hearkening back to the "I'll take my ball and go home," rhetoric of the playground. | | | | |
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< | Using class action lawsuits in lieu of individual suits in order to affect this same result could potentially Whether this effect could be replicated in other states would require, aside from a willing plaintiff and defendant, (1) an applicable consumer protection or predatory lending statute to bring the suit under that provides for injunctive relief like the MA statute, (2) attorneys to bring the class action and see it through to the end, and (3) judges willing to grant class certification and injunctions. | >
> | Section I
On March 2, 2008, the Attorney General of Massachusetts obtained a preliminary injunction against Fremont Mortgage Group, a mortgage lending firm based in California that held approximately 3,000 loans in the Commonwealth of Massachusetts. This action was brought under the Massachusetts Predatory Loan Practices Act and the general consumer protection statute (Mass Gen Laws 93A). The injunction requires Fremont, or any company that purchased a loan from Fremont, to submit these loans for review to the Attorney General's office before foreclosure. Judicial bypass will only be granted on a case by case basis, and the cost to Fremont is so great that the practical effect of the law is a moratorium on foreclosures by this company, keeping 2200 people in their homes for the foreseeable future or allowing them to renegotiate the terms of their mortgages on very favorable terms. Investors and mortgage lenders in the Commonwealth are bracing for more lawsuits, some are threatening repercussions in the form of reduced business in the Commonwealth, in a move hearkening back to the "I'll take my ball and go home," rhetoric of the playground. | | | | |
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< | With respect to requirement number one, Massachusetts Consumer Protection Laws are considered broader reaching and more protective of consumer rights than those of other states. | >
> | Lawsuits against mortgage lenders and banks are on the rise, as is to be expected during the recession. Often the plaintiffs ask for money damages, but also for renegotiation of the terms, injunctions stopping foreclosure, or striking of particularly unconscionable provisions. The cases can take years to resolve, but if a preliminary injunction is granted, the people involved can begin to see immediate benefit. Often the lender will simply settle or renegotiate to avoid the costs of protracted litigation. Widespread use of the these lawsuits can radically shift the balance of power between an individual borrower and his credit holder. | | | | |
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< | In Massachusetts, the Attorney General's Consumer Protection Office brought the suit. It is unwise to rely on similar action by attorney's general in other states. For one, banks and other lenders may spend enormous amounts of money to ensure the election of AG's who avoid these types of lawsuits. Taxpayers may not want their moeny being used to bail out people, even neighbors, who they consider to have acted unwisely. | | | | |
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< | A coalition of law school clinics, public interest firms, unemployed lawyers and law students | >
> | To bring one of these suits, a plaintiff would need an applicable consumer protection statute and a lawyer willing to take the case. Although the Massachusetts Predatory Loan Practices Act is particularly expansive, other states have similar statutes that provide for causes of action Once a sufficient consumer protection statute is found, the In Massachusetts, the Attorney General's Consumer Protection Office brought the suit. It is unwise to rely on similar action by attorney's general in other states. For one, banks and other lenders may spend enormous amounts of money to ensure the election of AG's who avoid these types of lawsuits. Taxpayers may not want their money being used to bail out people, even neighbors, who they consider to have acted unwisely. | | | | |
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> | A coalition of faculty-run, student staffed law clinics, pro bono consumer protection attorney's, and unemployed recent graduates could band together to bring these lawsuits on behalf of consumers. | | | | |
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< | Could this strategy be used in other states to prevent foreclosures?
Would need: a consumer protection statute on point, is there a federal statute? Individual state consumer protection laws? Company that engaged in predatory lending practices under the statute. | | | | |
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< | Would need a party to bring the lawsuit
Attorney General- Pros, resources, not necessarily concerned with getting payment out of the settlement/judgment, interest of the public.
Cons- Vulnerable to political change, need for political donations may prevent anti-business lawsuits.
Plaintiff's lawyers- class action.
Pros: Not beholden to wealthy corporations for donations
Cons: Logistics, getting payment, may not think it is worth anything to support a bunch of foreclosed homeowners. | | | | |
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< | Third Way- Legal clinics. Professors, pro bono practicioners, deferred associates working together. Could we coordinate clinics from schools in New York, or even the whole country? | | | Subsection A | | | Subsection A
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< | We are exposed to the law during our first year of law school as a series of legal battles fought in appellate courts. We are given these battles in casebooks, which are collections of cases arranged in an order the author feels best highlights the evolution of law he wants first-year students to learn. Although some cases warrant greater exposition by the casebook author, we are mostly given unedited opinions, with the facts filtered through the pen of the judge. At the end, one side wins, the judgment is affirmed or reversed, the law expands or contracts, and the outlines grow. This system gives us no context or understanding of the concerns involved. We may get a brief procedural history, but we won't learn what happened before someone walked into a law office, who the counsel were for the parties, how events in a court of law changed the lives of everyone involved. | >
> | Students are exposed to the law during our first year of law school as a series of legal battles fought in appellate courts. They are given casebooks, which are collections of cases arranged in an order the author feels best highlights the evolution of law in a particular subject. Although some cases warrant greater exposition by the casebook author, mostly they are unedited opinions, with the facts filtered through the pen of the opinion writer. At the end, one side wins, the judgment is affirmed or reversed, the law expands or contracts, and the outlines grow. This system gives students little context or understanding of the concerns involved. Notably absent from the casebook are the answers to questions like: what happened before someone walked into a law office, what was going on politically or socially during this time period, or how events in a court of law changed the lives of everyone involved. | | | | |
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< | This method of teaching has many effects on a first-year student, but this paper concentrates on the emphasis on legal reasoning- the process the judge followed to reach his conclusions, as described in the text of the opinion. We dissect the opinions, sometimes line by line, and, although we may not agree with the conclusion, generally believe that the or holding follows logically from the line of reasoning. On the exam, we are evaluated not only on our knowledge of the rules, but on our legal analysis. So-called policy considerations are considered optional, something to include at the end of the essay as long as you have spotted and fully analyzed all the issues. | >
> | This method of teaching has many effects on a first-year student, but this paper concentrates on the emphasis on legal reasoning- the process the judge followed to reach his conclusions, as described in the text of the opinion. Law students dissect the opinions, sometimes line by line, and generally assume that the holding follows logically from the line of reasoning. On the exam, we are evaluated not only on our knowledge of the rules, but on our legal analysis. So-called policy considerations are considered optional, something to include at the end of the essay as long as you have spotted and fully analyzed all the issues. | | | This way of thinking about the law is necessary because this is how these particular legal battles are fought and need to be fought in order to maintain the myth that the law exists independently of human concerns. Like Moglen's young Constitutional Law professor said, we must learn the wrong way before the right way, and that is so we do not make the mistake of not taking this myth seriously enough and being bad lawyers. Law students must learn legal reasoning independent of other consideration as the basis for law because that is all law students are prepared to do once they become lawyers. |
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