(Newswire.net — January 18, 2016) — Goldman Sachs will be paying out a $5 billion settlement for the over-rated mortgage backed securities they sold to unsuspecting investors leading up to the crash of 2008. Only $1.8 billion of that money will be going to consumers.
We spoke to attorney Susan M. Murphy, lead attorney at Advocate Legal, to ask how people can get this money. “Not easily,” she said. “When I read about this settlement, I heard the starting shot for all the scammers and bottom feeders,” Murphy said. “People should prepare themselves for the barrage of notices about how these firms can get you this money.”
Those currently in arrears on their mortgage, who received a loan bundled by Goldman, may be entitled to some of this settlement money. The issue, Murphy warns, is that consumers will start to see fliers and promotions from slash and burn law firms that will take their money, do nothing and be onto the next scam before they know what hit them. “These scammers will tell you you’re entitled to this money and that getting it will be easy because that’s what you desperately want to hear,” she said. “But no one’s giving you this money without a fight.”
Press releases and advertisements about the settlement may be conspicuously missing talk about the enforcement or distribution of this judgment. Murphy explains that that’s because there is none. “If you want this money you’re going to have to demand it and fight for it and that will have to take place in court. That involves litigation.”
Because of the way that mortgage-backed securities were bundled, sold and securitized, consumers are blocked from knowing which Wall Street firm bundled their loan and which trust it was sold into. Without research into the securitization, a consumer won’t know which mortgage-backed security their loan was bundled into or whether Goldman was involved. Knowing this information is essential to filing a lawsuit to get this money and Murphy assures consumers that they won’t get this money without such research and a lawsuit.
How To Spot a Slash and Burn Scammer
The first “red flag” to look out for is the price of between $3,000 and $5,000. While this seems like a fair amount to pay someone to get you this money, Murphy cautions that an actual litigation costs far more than this. “They will throw around the word ‘litigation’ but that word will not appear on the retainer they have you sign,” Murphy warns. “You may think they have some special way to get you this money, and it will not be clear in the retainer exactly what they are going to do to get it, but that only means they’re going to do nothing. And no litigation will ever be filed because that would involve work.”
Real litigation is based on facts.
You will also know that the firm is “not for real” if you are never interviewed about the actual facts of your case and if no audit of your loan is performed. Consumers first need a forensic audit of the loan to find out whether it was bundled by Goldman and securitized. An audit can tell you this information.
Second, the consumer needs to be underwater on the mortgage and have suffered some damage that Goldman can compensate for. In order for there to be liability to a consumer there must be damages. Damages in foreclosure are entirely financial. The slash and burn firms will never talk to you about damages and never mention this obstacle.
“The issue of damages in foreclosure is very tricky,” Murphy warns, “and “litigation is not justified if you can’t get them”. Damages, according to Murphy, may include a huge down-payment for a house, only to get tricked into a toxic subprime loan, the loss of equity, improper fees tacked on by the servicer or other forms of breach by the servicer. Servicer tricks can also be breach of contract such as when your servicing rights are switched and the new servicer refuses to honor your trial payment or permanent modification.
Murphy advises consumers to contact a reputable firm with experience litigating against mortgage lenders, securitizers, trusts and servicers who can confirm whether Goldman Sachs was involved in their securitization and help them recover their share of that settlement.