Litigation Related to a Mortgage: Expert Witness Considerations

JoffreyLong (818)366-5200www.MortgageExpertWitness.net
ExpertWitnessConsiderations
LitigationRelatedtoa
Mortgage:
JoffreyLong

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Joffrey Long
17045 Chatsworth St., Granada Hills, CA 91344
(818) 366-5200
info@asksw.com
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:
www.MortgageExpertWitness.net

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.

Litigation Related to a Mortgage: Expert Witness Considerations

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Litigation Related to a Mortgage: Expert Witness Considerations