Litigation Related to a Mortgage: Expert Witness Considerations


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Disputes often arise in relation to a mortgage. Expert witness testimony is sometimes needed. There are many different types of mortgage lending expert witnesses. This presentation will describe certain types of individuals who may provide services as a mortgage lending expert witness.

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Litigation Related to a Mortgage: Expert Witness Considerations

  1. 1. JoffreyLong (818) ExpertWitnessConsiderations LitigationRelatedtoa Mortgage: JoffreyLong
  2. 2. JoffreyLong (818) MortgageExpert • Disputes often arise in relation to a mortgage. • Expert witness testimony is sometimes needed. • There are many different types of mortgage lending expert witnesses. • The following presentation will describe certain types of individuals who may provide services as a mortgage lending expert witness. Witness
  3. 3. JoffreyLong (818) MortgageLawsuits Typesof BorrowerLawsuits Litigation brought by consumer and non-consumer borrowers who obtained loans, then determined that the loan(s) were not beneficial to them, were somehow unfair or that deceptive practices were used MortgageBrokerDutiesandStandardofCare Where loans were made or arranged by a real estate broker, challenges to the broker's actions may arise.
  4. 4. JoffreyLong (818) MortgageLawsuits Typesof DisputesAsToWhetherOrNotLoansWereArrangedBy ABroker There are sometimes disputes as to whether or not certain loans were made or arranged by a licensed real estate broker. Usually, this relates to an exemption from the usury law. LoanServicing,DefaultAndModificationIssues Challenges with a loan servicer's collection procedures, handling of delinquent accounts, loan modification practices and practices regarding forced-placed fire insurance, among other factors, may lead to disputes between loan servicer and borrower.
  5. 5. JoffreyLong (818) MortgageLawsuits Typesof HardMoneyLenders(PrivateMoneyLenders)AndHard MoneyBrokers When making or arranging loans using funds from private trust deed investors, borrower disputes can arise over many issues, such as origination costs and documentation, loan servicing disputes, and sometimes more complex issues such as guarantors, mixed or multiple parcels of collateral, and complexity of borrower entities.
  6. 6. JoffreyLong (818) MortgageLawsuits Typesof TrustDeedInvestor'sLossOfCapitalOrInterest There may be disputes relating to a trust deed investment. Expert witness testimony may be required. Disputes may relate to a trust deed investor's complaint that the loan wasn't considered carefully enough, that material information about the investment was not communicated, and that after the loan was made, proper procedures were not followed.
  7. 7. JoffreyLong (818) MortgageLawsuits Typesof TheCommercialLoan"GoneBad" Loans secured by commercial properties may be subject to certain problems such as borrower default when rental income ceases to exist or disputes relating to special clauses contained in commercial loan documentation and agreements.
  8. 8. JoffreyLong (818) MortgageLawsuits Typesof LoanFraudIssues Lenders, Borrowers, Title Insurers, Escrow Holders, Mortgage Brokers, Property Owners, and others may be victimized by fraud. Disputes arise as to how fraud could have been prevented, who is responsible and what the actual damages are. Often, due to the disappearance or insolvency of the perpetrators of fraud, remaining parties who have assets or insurance coverage become defendants.
  9. 9. JoffreyLong (818) MortgageExpertWitness ChallengeswithSelectinga There may be many experts whose CV (resume) shows experience in, or a strong relationship to some part of mortgage lending. The expert's SPECIFIC experience and advanced knowledge in the type of mortgage issues involved in the dispute may be critical.
  10. 10. JoffreyLong (818) MortgageExperts Typesof BankingExperts There are many retired bank executives and officials who offer to provide expert testimony. Where the banks in which they worked may have handled mortgages, it may be important to verify their actual level of involvement and experience in the mortgage process and their knowledge of current lending practices and procedures.
  11. 11. JoffreyLong (818) MortgageExperts Typesof InstitutionalLendingExperts Some experts have spent all of their time in the institutional lending field, involved only in the origination, servicing or other aspects of loans that were brokered to, made by, or sold to institutional-type lenders such as banks, credit unions or mortgage banking companies. If the case involves other types of loans, or present-day institutional lending activities, one may consider further verifying the expert’s qualifications.
  12. 12. JoffreyLong (818) MortgageExperts Typesof ConsumerorLender"Advocate"Experts Individuals who have very strong opinions about the rights of borrowers or the rights of lenders to make loans may be challenged in clearly assisting the triers of fact in an unbiased manner. Many of these experts have numerous writings published in which they have already condemned certain lending practices or made very strong statements as to what is or is not "correct" in lending.
  13. 13. JoffreyLong (818) MortgageExperts Typesof AttorneyswithMortgageExperience Attorneys experienced in matters of mortgage law may also offer to provide expert testimony. These experts may be challenged by never having actually worked as mortgage originators or practitioners. In considering this type of expert, one could ask about their actual experience in the loan origination process, other than as an attorney, and about their "hands on" understanding of the actual lending or loan servicing procedures involved in the case in question.
  14. 14. JoffreyLong (818) MortgageExperts Typesof MortgageScholarsandComplianceExperts Often very knowledgeable, these individuals have sometimes spent decades studying the laws, regulations and technicalities of the industry. Challenges with this type of expert may center again, around a lack of hands- on experience and a lack of knowledge of the true functions of making or arranging loans, as opposed to experience limited to the study of rules, regulations, laws and compliance guidelines.
  15. 15. JoffreyLong (818) MortgageExperts Typesof IndependentMortgageBroker/Lenders Practitioners in mortgage lending, brokerage and loan servicing may possess significant experience and knowledge. Here, it may be worthwhile to carefully interview the practitioner, to determine if they have an adequate understanding of the underlying concepts of the case, as opposed to just their own "practical observation" based purely on experience.
  16. 16. JoffreyLong (818) SettlementIssues • Generally, when disputing parties enter into settlement agreements prior to going to trial, the elimination of trial costs, the time saved, and having a known outcome may be beneficial. A qualified expert witness may aid all parties to the dispute by assisting them in better understanding the industry and practice- specific aspects of the case, and by providing insight into testimony that may impact the outcome of a trial. • An expert who lacks certain knowledge or experience may fail to assist the parties in understanding these issues, leading to a possible failure to reach a settlement. • There are many disputes where the expert never testifies, except at deposition. Many cases settle shortly after the deposition of the expert(s) for one or both sides is taken.
  17. 17. JoffreyLong (818) Joffrey Long 17045 Chatsworth St., Granada Hills, CA 91344 (818) 366-5200 Joffrey Long is President of Southwest Mortgage, and has been in the mortgage industry for approximately 35 years. He consults and testifies as a mortgage expert witness, hard money expert witness and loan servicing expert witness. Please review the entire white paper on this topic, at:
  18. 18. JoffreyLong (818) Disclosure Information provided is for consideration by qualified attorneys in investigating the possible selection and retention of a mortgage expert witness. Nothing contained in this slide show is meant as a standard of care, or to indicate or endorse any particular practice, standard or procedure to be used in either mortgage lending, loan servicing, mortgage loan brokerage, or for legal or expert witness practitioners. Joffrey Long is the Education Chair for the California Mortgage Association (CMA). This writing is completely separate from, and not endorsed by, approved of, or in any way connected with CMA. Opinions, statements, and other information provided here does not necessarily reflect the views, opinions, or positions of the California Mortgage Association.