“Dear Steve,

I just resceived a mass joinder litigation lawsuit final notice, and litigation settlement notification by Litigation Settlement Department, Irvine, CA 92626 against Flagstar Bank. I need to know if this is a scam or not.

The lady at the law office–she said she needed to go speak to the lawyer on a question I asked, so I assume this is a lawyer’s office–said there are many litigants as a party to this suit and some have been settled out of court. To join, first I need to pay $1250 for half of an outside audit, and it the auditors fnd discrepancies or shady dealings, then I need to pay the second half, which is also $1250. At that time, the lawyer will get half his retainer fee ($850) and the other half after I receive my settlement. she gave me her website www.joindercase.com to check it out. My husband thinks this is a scam, and I don’t but I don’t want to waste my money, either.

What can you find out? What should I do? Is this legitimate? I am retired and on a fixed income and my husband has not had a full week’s work since December due to the weather –truck driver; construction. We did a loan modification with them a couple of years ago, and our loan is now in good standing.

Sandra”

The Answer

Dear Sandra,

So the website you gave me leads me to Mass Litigation Alliance (“MLA”). MLA appears to be a central location that is allowing affiliates and non-lawyers to sell these cases. You can see some of the marketing material and commissions being paid for mass joinder cases.

This area is exploding. Consumers are being pitched these cases for big bucks and pricing is all over the board. Some retainer agreements with lawyers say that if there were to be successful in erasing the underlying mortgage, the consumer would owe 30% of the mortgage eliminated.

Since it does not seem you are at risk of foreclosure and your loan was successfully modified, what’s the harm in waiting to see if any of these cases fly? If they do result in the claims people are making; loans forgive, cash settlements, etc. then join a latter suit.

It also seems prudent that before you jump at a marketing mailer and a sales pitch to join a suit it would make sense to seek a second opinion from a real estate attorney in your area. Get a professional second opinion. No lawyer would hold you back from doing that?

I’m not quite sure what the mailer you got said but my bet is it may have given you the impression there is already a settlement offer on the table from the banks in these cases. I’m not aware of any. I think the wording in these mailers is misleading and can make the recipient believe there is a current settlement they can participate in. The reality is these cases may drag on for years and never result in much, if any, of an award.

Since you are on a limited income my advice would for you to be cautious, and invest a little bit in getting a second opinion, first. If you then think it’s a smart move just realize it may take years, you may get no award, and you may owe a significant value of the mortgage if there is a victory.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

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