I would be particularly interested if you should come up with any information re Brookstone Law’s mass joinder case they are commencing against Bank of America. Not long ago I noted on your website a similar request from someone who was suspicious about Brookstone Law. Brookstone did not solicit me; I came across them in the course of my own web search, looking for some kind of class action lawsuit I might join. I felt I had strong evidence that Bank of America had scammed me in the course of my 11-month ordeal applying for a mortgage modification under the HAMP plan.
My suspicions regarding Brookstone were initially aroused by the fact that, although the potential “customers” for such a lawsuit are by definition people who do not have enough money to pay their mortgages, to join Brookstone’s lawsuit you have to come up with $900 for a forensic audit, then pay upfront $2000-$4000 to continue, with no guarantee that you will ever win a settlement and get that money back. When I remarked that if I had that kind of money I could pay my mortgage, they replied that once I am accepted onto the lawsuit I am protected because the bank has to promise not to foreclose until the case is settled.
But what if we lose? They replied that I won’t be accepted on to the lawsuit unless they analyze the details of my case and are sure we will win. They cited a previous victorious mass joinder lawsuit. They said that the first thing they would do is complete the forensic audit, and if my case doesn’t look good enough they will refund my $900 and close the case. If my case looks strong and they join me on to the lawsuit, they claimed I might end up owning my home free and clear! They said many people, although already in debt, come up with the up-front retainer fee somehow! They said how much is it worth to you to save your home? (That last gambit really infuriated me!)
My natural skepticism was increased by the fact that neither Carl Saterfield, the “intake” guy, nor Anthony Stout, the follow-up guy who really did sound like a lawyer, ever said anything about up-front fees until they had already had me fax all my relevant mortgage documents and we had already had several conversations. It felt like they had been trying to “hook me in” before lowering the boom! When I expressed dismay that they had waited so long to mention the money, they sounded surprised, as if it must have been an unusual oversight. They said that these lawsuits are very expensive to initiate, and that although they had been very successful and presumably had a lot of money in their coffers from previous lawsuits, they couldn’t be expected to bear all the costs in advance.
I finally told them I just couldn’t see how I could come up with the money. But one evening some days or maybe weeks later I was surprised to get a call from a young man at the Brookstone office asking for details about my case, as if they weren’t finished with me. He interviewed me for awhile, but when I finally mentioned the money problem he put me on hold and consulted with Anthony Stout. He came back and said sorry, I hadn’t realized they had already dealt with this, there’s nothing more we can do. I mentioned then that I had been apprised of a lawsuit that had been initiated against a number of defendents including Vito Torchia, managing attorney of Brookstone. This motivated Anthony to come to the phone himself and assert essentially that the plaintiffs had lost that lawsuit.
That was my last contact with Brookstone Law.
The question that remains for me is, isn’t there a suitable mass lawsuit for me out there somewhere in which the lawyers will get their money on contingency? Given the fact that there must be zillions of people who have been denied a mortgage modification after many months of application and hassle, and who–like me–have good reasons to believe that the bank has scammed them in one way or another, why aren’t there a lot of lawyers out there who see the opportunity?
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I happen to email back and forth a lot these days with Vito Torchia, Jr., the owner of Brookstone Law and I asked him to directly respond to you question. Here is what he had to say.
I appreciate the courtesy in letting me respond to the consumer’s inquiry. As you are aware, on February 9, 2011, Brookstone Law filed Wright, et al v. Bank of America, et al. a mass joinder case in California Superior Court in Orange County on behalf of 128 plaintiffs. Among the causes of action in the Wright case are numerous causes of action for fraud, regarding loan origination, and violations of California Civil Code Section 2923.5, regarding violations in the foreclosure process.
In addition, in the soon to be filed First Amended Complaint, we intend to include a cause of action for breach of contract regarding the lenders’ so called Trial Modification Agreements. This lawsuit and lawsuits we anticipate filing against other lenders, seek to help homeowners protect their rights and hold the banks accountable for misdeeds. We allege that such misdeeds involve unlawful and predatory lending practices, unlawful securitization of the note and unlawful transfer and assignment of Deed of Trust/mortgage.
Brookstone Law has recently joined forces with the attorneys of Apex Law Group, PC, who initiated the Ronald v. Bank of America case in Los Angeles, and Kenin M. Spivak of SML LLP, one of the co-lead attorneys on the Ronald case, and who will associate in as co-lead counsel in the Wright case and in other lawsuits we are considering.
Depending upon the lender and each individual’s circumstance, these lawsuits may be suitable for homeowners who originated or refinanced their loans from as early as 2001 through as late as 2008. These lawsuits may be suitable for homeowners who are current on their mortgage but have lost equity, as well as homeowners who are facing foreclosure or who have already been wrongfully foreclosed upon (though these lawsuits do not, of themselves, prevent foreclosures and such efforts require a separate proceeding that may or may not be successful).
As attorneys, we understand the realities of litigation. We cannot guarantee any particular results – and as the writer correctly points out, we do not.
While all litigation is expensive, mass joinder actions are particularly so because there are large number of individual clients, and very large well-entrenched defendants. The large number of clients creates a need for sophisticated systems and teams of client relationship managers. Discovery can occur at the individual level and require considerable interaction and huge paperwork. This, in turn, increases the need for paralegals and lawyers.
By comparison, class action litigation is much less expensive. Though clients may receive mass emails, few individual clients interact with the legal team, there is seldom discovery at the individual client level and it is almost as if the law firm is its own client.
While it is unfortunate that we cannot afford to undertake the costs of working with our clients, litigating the case and discovery without a source of funds to reimburse our costs, it is nonetheless true. Further, seeking investors to cover these costs creates a range of ethical, legal and financial problems – not the least of which is that it likely would lead to far higher contingency fees.
As you know from reviewing our engagement agreements, both our retainer fees and our contingency fees are well below what others charge. Clearly, our retainer fees do not create the incentive for us to litigate these cases and at best cover our out-of-pocket costs and overhead (if the retainers did not cover our out of pocket costs and overhead, our firm would fail and our clients would be unable to pursue their claims).
Without question, we might lose some or all of these lawsuits. Further, without questions, some of our clients might win and others might lose. It is therefore true that the retainer might do nothing more than increase our client’s loss. That is a necessary evil of most litigation, except perhaps a class action. It is noteworthy that most class members generally receive very small recoveries in a successful class action. Our goal (but not our promise) is that many of our plaintiffs will receive much larger recoveries through joinder actions than would typically occur with a class action.
The fact is that no individual who cannot afford the loss of his or her retainer should retain Brookstone, because that could be the result. We hope not, we will work zealously for that not to occur. But there are no guarantees in litigation except that the outcome is uncertain.
I should also observe that if a homeowner were to, instead, consider an individual action, the odds are very high that the fees and costs would vastly exceed what that client would pay to Brookstone. Again, however, there might be exceptions.
In some of these lawsuits, some plaintiffs might seek to be released entirely from their debt. It is possible we may be able to obtain this relief by proving that through the process of mortgage back securities these banks have already been paid the full amount of consideration of the note many times over. However, as both a matter of fact and law, our effort might not succeed.
As for the writer’s mention of a lawsuit in which I am one of the defendants, I have denied the allegations and have asserted – and by this letter again assert – the complaint is in error both factually and legally. Neither I nor anyone who works for me had anything to do with the allegations in that complaint. At the appropriate time I will make a motion in that court for Rule 11 sanctions against the attorneys who failed to do their due diligence before filing that complaint.
As for the writer’s final questions regarding finding a suitable mass joinder, as I mentioned above, I will be working side by side with Kenin M. Spivak and a team of very talented attorneys and staff to file additional cases. Currently we anticipate filing actions against JP Morgan Chase/Washington Mutual, Wells Fargo/Wachovia, Ally Bank/GMAC, Aurora/Lehman Bros., Citibank, One West/IndyMac, and HSBC. However, that list might change based on the results of our investigations and discussions with prospective co-counsel and prospective plaintiffs.
While we will consider filing class actions, for which there would be no upfront cost to any plaintiff, I can’t be certain that will occur and I cannot give the writer advice on whether he would be a member of any particular class.
One benefit of the mass joinder approach is that if the bank offers a mortgage modification that is acceptable to the client, it is well within the client’s right to choose to take the modification/settlement. Doing so might, or might not, require the client to drop out of the lawsuit. It might, or might not, reduce the client’s damage claims. A joinder case involves individual plaintiffs and the answers are specific to each individual’s circumstance.
Vito Torchia, Jr.
So there you go. Mr. Torchia does say they may be filing class action cases where there will be no upfront cost to the consumer so you may want to consider waiting to see how the initial cases go and staying in touch for the no fee class action efforts of the firm if you want to act later.
If you feel this is something you may want to proceed with an you are unsure, find a local real estate attorney and get a second opinion before you do anything.
Please post your responses and follow-up messages to me on this in the comments section below.
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