I am in NYS (outside of NYC). I couldn't find a better place to post, since there are no legal threads, so I figured under ethics is the best bet.

I have had my license for 3 years now as a salesperson. My husband (and I) both were in the mortgage business in the past. I have some issues related to my very first deal that are concerning. I am not sure if anyone here can help, since I am in the process of finding an attorney, but I will be grateful if anyone can advise, as its quite a serious matter.

My first deal involved a sale of a family members house, outside of my MLS/area. I wanted to refer the deal (should have went w/ my gut) but the person had a ton of confidence with my help, we could sell it together. This person was my father, fyi. It was a house that he remodeled and was now selling. I had him sign the listing agreement, and researched my options on how to market it. Long story short, I went with a flat fee service, that allows many FSBO's to sell it themselves, since they had access to the MLS out of county. The service would not allow me to co-list it, but they did allow my info in the agent remarks and as contact person. They also did allow my sign and brochures at the property and on my website, but just not on the MLS - wonder if that is even kosher?

I digress- I had a ad out on craigslist, a buyer from lower NY responded. She wanted more info. I told her a bunch of info in a email, and included that it was my Dads listing.

I got a call from an agent from NJ, saying she was representing this buyer. She also had her NY license, and wanted to show her buyer. I told them the instructions, they went & saw the property.

The buyer emailed me directly sending me feedback, and we communicated a bit including with her agent. However, not knowing the rules too well, (still somewhat blurry to me), I did email back and fourth w/ the buyer. Her agent knew about this, and didn't advise her client not to involve me, nor did she advise me to just contact w/ her agent.

I told the agent that my husband was a mortgage planner, and if they wanted a 2nd opinion, (i think they had told us they had a prequal from NJ and needed a updated one), that she could contact my husband. I told them that we also worked mortgages together, and his info was on my website as my "in house" type lender so to speak.

They did contact my husband and he worked up a prequal. The buyer had a prior (30 months out) foreclosure. My husband worked up a mortgage plan using the (what we thought was helpful then) 2/28 style loan, to help her buy the house w/ 100% financing, and rebuild her credit so she could re-fi in 2 years, and re-gain her life (also had just divorced).

I negotiated w/ the buyers agent and we agreed upon a price. My husband collected her info for the loan, and with their knowledge, I helped somewhat in that communications of gathering docs for him and forwarding emails.

She then fell out of guidelines for the mortgage, and ended up not qualifying anymore. She was very desperate to buy this "dream home" that she wanted to retire in and rebuild her life, and we searched for a program for her. We found a good program for 80%, but my dad had to hold 20% remainder of the note. AFter a lot of back and fourth w/ his attorney, we agreed.

The lender requested a LOX for her living 120 miles from her place of work. She described in a long letter how she would make this transition. She also explained in a email to us that we need not worry, she would find a job as a nurse when she moved making at least, or more, the salary. That my dad shouldn't worry and she was more then secure.

Due to a pending subdivision, she moved in and rented (was extremely anxious to move in) for 1 month, until the subdivision was approved. Interestingly, her 1st rent check bounced. Once subdivision was approved, we had a closing (unpaid rent was rolled into the closing costs i believe). I recall we had a tentative closing date, and even thought it was up in the air, her and her agent drove all the way north (2 hours) without a final confirmation, only to not have the closing that day. 2 days later, there was a closing via mail (cant remember exactly why) but both parties signed via mail. This was about 3 years ago, 9/06.

My husband had told her they should meet in a few months to monitor her credit progress, and make sure she was on the right track. She never returned calls or emails.

A year in, or less, She soon stopped paying the mortgage, and having all kinds of difficulties. Scott and I stepped in to help her, since i knew the rental market in the area was hot for vacationers. Scott told her he wished she stayed in touch so he could have helped her. We found out she either lost or quit her high paying job that was far away, and found another, but the salary was much lower.

Since this was after her occupancy for the 1 year point, i suggested she put it on vacation rental sites and move in with friends/family so she can keep the house. She pleaded with me to help her rent it, she was going to pay me a % to rent it for her, I agreed, to help her, and hoped she could keep the house, and start paying my dads loan once again, and her mortgage.

I helped her rent it out for a few months. Despite my advise, she rented a apt in town, and now had a mortgage and a apt rent to pay! oi! she really had no clue obviously.

I stopped helping her when it got to be too much. All the while, my dad never saw anything (maybe 1 payment) and i helped her quite a bit. I felt very used. But i know it was her income to do with as she pleased.

Then, my husband got his real estate license. She and him agreed it was best to try to sell the home. They put it on the market (co-listed w/ a agent in that area), but it was too late, the house went down in value, and it didnt get any showings that i can remember. He encouraged her to lower the price, do a short sale or something to get out of it all. She wouldnt do it, b/c she claims to want to pay off all her debt, including my dads. She had a attorney from lower ny then too, because my husband had spoken to him. He was giving her all kinds of odd advice, and supposedly had a low ball short sale offer he was trying to negotiate w/ her lender.

So, it expired, and a few mo's ago, my parents got a notice shes going to foreclosure court. (big surprise).

But, to a bigger surprise to me, after all we helped her with, and the fact that my dad never saw any more payments from her (he held a note for almost 90k!), we just found out she is counter-claiming against her bank, and added my husband and myself as 3rd party defendants. I have not yet received papers yet, but she is claiming my husband discriminated & worked for deceptive practices in obtaining a loan for her, & that the bank discriminated and also a general fraud allegation against all of us (including my dad).

Obviously, were in the process of getting an attorney, but i just wanted to post this here, since i am really curious to know if anyone has any kinds of insights for me.

thanks for helping in any way.

Find a good litigation attorney with a background in real estate. Also make sure the attorney is pretty aggressive. Also do you have E-O insurance. You might want to check with them. Sometimes they require a certain attorny firm.

Also expect things to get real nasty. They will start to bring up stuff that has nothing to do with it and ask for all kinds of stuff. Make sure everything goes through your attorney. Let everything flow though whoever that might be. They will ask you to admit stuff and ask for stuff they dont have the right to ask for. And your attorney will know what to release as well as how it needs to be worded. Stay well informed about everything as well as do research on your own. If you want something asked go through your attorney but require it to be asked. Use common sence. If it does not seem right its not.

In addition and most of all dont get intimidated by the other side. Remember they have nothing to lose. They have no money so the very worst in their mind is another judgement. So they feel like they are in a nothing to lose everything to gain thing. They will go after not who is in the wrong but who has the most money. And money is also insurance.
The real crazy thing is most likely it will settle. But even if you have to go to court and lose the only one who makes money here is the attornies.

Wow, that's a mess...I don't even know what to say.

What does your broker think?

Well- i got a copy of her claims and allegations. I can tell you- it is so ridden with blatant lies it is incredible! truly amazing. This woman wants to basically live in this house, for free. She is claiming things that are very false, and thankfully, we have tons and tons of email proof. I will keep you posted once things progress, but the attorneys dont think she will get very far.

As far as my broker, I have told my prior broker about this, but my current one does not know yet. I have not yet been served with any paperwork, and it would not involve them, I dont believe, since they are suing my husband and the mortgage co, and not my real estate broker.

You say the claims & allegations are full of blatant lies . . . So, start writing up your side of the story. Take each accusation & write out your response to it. If you have any supporting documentation, put a copy of it with that response. Hold onto all of this till you start working with an atty.

In future transactions, as a matter of course, recommend you keep a page in your file for each buyer client & each listing you have. Note the date & time and add a brief description of whatever action you've taken: a phonecall to or from someone; a document received or sent somewhere; a face-to-face meeting w/whomever . . . Doesn't have to be an autobiography, just notes. If you do this consistently, you will get into a habit & it won't be hard or time consuming. It's a great CYAWP (Cover Your A** With Paperwork) and will help you tremendously if you ever have to answer questions to anyone about anything regarding a particular buyer or seller, or a difficult closer/lender/processor/atty/property inspector, etc.

Good luck with this current snafu, and please let us know how things turn out!

Legal Woes/lawsuit
I assume that before you engaged an attorney, that you have read the terms and conditions of your E & O insurance policy and have notified them according to their terms, and if not they can deny you coverage.

Most insurance policies contain a “subrogation clause” giving them the right to represent you in a legal action. Once you have notified them, they will advise you on what is required and how the matter will be handled, otherwise they will not fund your defence and may deny you coverage.

Since you have been served with the plaintiff’s “Statement of Claim” you may wish to consider some of the following to aid your attorney.

The following will begin the moment that you have been served with the appropriate documents and will aid your legal counsel.

1. Document Service: Your attorney will advise you if the service of documents upon you, was proper and in accordance with the law.

2. Record the following:
Type of Document ..................................
Date of service:........ Time:........ Place:........
Method of service:........ personal service ........registered mail........regular mail........ by substitutional service ...............
Name of Process Server:........................ Sworn affidavit filed:........................

3. Limitation Period: Your attorney will advise you if the action was filed within the prescribed limitation period.

4. Jurisdiction: – Your attorney will advise you if the matter is intra-virus (within) or ultra-virus (outside) of the jurisdiction and authority of the court.

5. Original Document Folder: Keep all original documents in a chronological order, in a separate folder for "original documents", as you may be required to produce the original documents for the court.

6. Working Folder: Make working copies of all original documents and place in a separate folder. This enables you to make written notes on the working copies.

7. The Statement of Claim: The working copy of this document should be doubled spaced to enable you to make corresponding notes as you analyse each line of the document, as to both the issues and the elements of each issue that may be construed directly or indirectly.

a) Analyze your working copy of the plaintiff's claim and allocate each issue to it's own line.

(b) Place the letter A next to any statement that you wish to admit. (that you agree is true/accurate)

(c) Place the letter D next to any statement that you wish to deny. (that is untrue/inaccurate)

(d) Place the letter U next to any statement about which you know nothing. (Unknown)

(e) Under each issue, list the various elements of the issue

Open your own personal chronological file in which you record all events and details with respect to your case.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .