Expert: Michael Brotherton - 5/2/2007

Question
I have a rental property in foreclosure that is going to be sold in 2 days at auction. the property is located in new York state. In the very very early stages of default past due 1 1/2 months I was approached by a mitigation firm on behalf of my lender in which the only option I was given was to sell the home. After 6 months (the contract they filled in the time for)the home was not sold and I found out that even though the lender advised me to work with them, the mitigation firm was only acting as an real estate agent with no contact with my lender or their attorney and I was advised by the lender that the  mitigation firm SHOULD have advised other option (short sale, forbearance etc...) but the fact is that the home is going to be sold in two days and my attorney says it may be unadvisable to even place a an order to show cause as the damage has been done to my credit already. Do I have any recourse with the mitigation firm or should I attempt to travel and do an order to show cause myself ?

Answer
Before this question can be answered it would be important to read their contract. If they promised to go through the mitigation process and did not after you paid them that may be a breach of contract or if it was intentional or if they have a history of doing this considered a fraud. I believe they do have some liability here but it is difficult to say to what extent. Check with your attorney general and the BBB to see if they have other complaints. There are many companies out there that will take your money and run or not follow through with mitigation. It is companies like that that other legitimate companies a bad name.

I would file a complaint with the State Attorney General or hire an attorney if you have the funds and some evidence to support your case.