5 OPTION ARM LOAN LITIGATION QUESTIONS TO ASK YOURSELF BEFORE FILING A PICK-A-PAY LOAN LAWSUIT…..

(1) Litigation is expensive and should be deemed one of the last resorts you consider along with Bankruptcy.

(2) You need a loan that has been originated within the past several years.  Some people call on option arm (pick-a-pay loans) that are 7 years old.  Probably not a good candidate for filing a lawsuit.

(3) You need to distinguish between suing your broker who put you into the loan (ex. a suit for fraud, deceit, breach of fiduciary duty, etc.) from a suit against the “lender” of the loan (who will usually claim no wrongdoing, and assert that the broker is to blame not them), and distinguish among the current holder of your loan (who will also claim no fault and just claim to be a loan investor or holder in due course), from your loan servicer (the company you are making payments to on your loan, and who likely has no liability for the option arm loan.  You need to find a way to hold your current owner/investor liable and need to normally find a way to get an injunction to stop foreclosure (since this is the goal most people have).  This is not always an easy task to identify proper grounds for a TRO or injunction.  One good ground is a Truth in Lending (TILA) rescission claim.

(4) You need to determine your chances of winning especially if you are unable to get a preliminary injunction or TRO and the case goes to trial on the issue of money damages.  Will the jury like your case?  Some cases are better than other.  For example, if you are an investor with 5 other loans, each with an option arm loan, and you took cash out on these loans, you have to ask whether a jury will really see you as the victim, or rather, just a disgruntled investor trying to litigate back his real estate losses.  On the other side of the spectrum, if you are elderly couple, or minority, and none of your previous loans were option arm loans, and you were truly misinformed, deceived, and lied to in regard to the option arm  loan, the teaser rate, the repayment options, and loan recasting feature, etc., this may be a better case to litigate.  Each case is different and must be evaluated on its own merits.

(5) You should think about whether there is a better way to accomplish your goals (ex. pursuing a loan modification, or seeking a short sale of an upside-down property, or seeking a deed-in-lieu of foreclosure).

These are just a few items to think about.  If you want to have your option arm loan / pick-a-pay / negam loan evaluated for litigation potential fill out this form and we will look it over: http://www.optionarmlawyer.com/wp-content/uploads/2010/04/Option-Arm-Loan-Litigation-Questionnaire1.pdf