Foreclose in Federal Court to Save $ and Time | Real Estate Notes Show

Episode: Foreclose in Federal Court to Save $ and Time - Full Length Dave's Goals and Plans: - Currently selling a few assets and bought a few assets last week - Seeing an influx of deals coming through - Has done foreclosures in the past, sometimes more than desired - Sworn off New York notes due to complexity as a composer - Learned about federal foreclosure processes that could have saved money and time on previous deals Nathan's Goals and Plans: - Located just outside Montreal, business operating normally - Has several foreclosures in progress at any given time - Maintains Tuesday as attorney follow-up day, spending several hours reviewing foreclosure progress - Has done two New York notes and found them to be a headache - Foreclosure process evolved from chaotic to systematic with clear checkpoints and timeline understanding Key Recommendations: - Consider federal court foreclosure processes instead of state court to reduce time and costs - Implement regular attorney follow-up schedule (like Tuesday check-ins) to maintain foreclosure progress - Research federal foreclosure processes before choosing foreclosure venue - Take time to learn different foreclosure processes thoroughly as it can significantly impact profits - Federal court eliminates serial junk motions and stalling tactics common in state court Topics Discussed: - Federal court vs.

state court foreclosure processes - Cost and time savings through proper foreclosure venue selection - Federal judges vs. state court judges qualifications and political elements - Pennsylvania Deed controversy and its implications - New York foreclosure challenges and complexity - Federal court docket management and timeline control Guest Insights: - Federal court judges are lifetime appointees removed from political process, typically higher caliber than state court judges - Federal court has much smaller dockets with better funding and more resources than state courts - Federal court eliminates endless litigation and junk motions used to stall foreclosures in state court - Federal judges have micromanagement control over timelines with oversight of each phase - Guest has 35 years experience in default work, starting accidentally through collection attorney work and REO business hey everyone dave putz here from jkp holdings alongside me as always mr nathan turner good day good day good day hopefully we have a little better audio situation here today um if we don't i'll go ahead and make sure we fix it pretty quickly as i think i figured out the issue over here but uh we'll go from there so nathan yes we're gonna get it out of the way first mentioned i guess in the room whatever canada is going through craziness right now from the state side but i'll get into detail how are you is everything going okay we're totally fine everything was was just so i'm i'm in just outside montreal i don't know if anything was happening in montreal at all um i hardly ever go into montreal it's you know i've got my home office so that's that's good enough for me as far as i know really everything was going on in ottawa um right at capitol hill so i mean it's fine everything's cleared now my friends in alberta were were upset because the border was blocked and that was uh you know inconvenient but really that's that's really all it was so we're fine everything's good we're good well i'm glad to hear that right because there was a few people mentioning how they were very curious how you're making out and of course yeah what we hear is a lot different from what is possibly happening yeah i i i just keep my head down keep doing what i'm doing whatever i went snowboarding this morning it was fantastic so it's good business as usual right for me yeah yeah i i know there were certain people that were you know it was really disruptive and and like i say inconvenient more than anything else but uh but by and large you know really business as usual right i'm glad to hear that man yeah thanks because you guys and i've heard of outside of canada new zealand in particular but we don't have anyone on the call from new zealand but anything else going on anywhere a federal court judge so we're in front of typically very learned people with with good pedigree and without the political element to it the best part about federal court that we've found as opposed to state court in state court anybody who's owned a note and foreclosed on it in new york knows that you have endless litigation nonsense litigation to stall off the process and as long as the defendant is capable of making motions or the attorney has been paid to make motions the motions will keep coming or just to show cause after the foreclosure is completed to try to vacate the foreclosure things that'll tie you up for years that process doesn't exist in federal court in federal court you can't make a motion without the approval from the judge so there's no such thing as serial not junk motions to stall down the process the federal court system is also the the the judge is in federal court typically have micromanagement control over the timelines and and they watch every every day and we get reminders and much much more is expected of the attorneys in new york in federal court than put typically in state court we found that to be a distinct advantage because the attorneys who customarily represent defendants in foreclosures more times than not don't have the skill or the time to defend the case in federal court in the in the same way they would in state court stakeholders often just simply about stalling to let your client live in the house for as long as possible that doesn't work in federal court the judges as a rule of thumb don't allow it and god help anybody who who gets in the way of the federal court judge timelines and instructions so by the time you whittle this down you with it with a typically a better a better bench a better set of judges with better equipped courthouses better thanks because you guys and i've heard of outside of canada new zealand in particular but we don't have anyone on the call from new zealand but anything else going on anywhere i haven't heard anything right i know at the end of the day we don't know what's happening or else as long as we're doing okay we got to focus what we can do right we can only do what we can do and i think for me you know we're curious it comes back to curiosity right yeah i don't really pay very much attention in everything that i do my main focus is how is this going to affect my business that's that's really what it comes down to for me um i don't get too upset otherwise yeah it's you know how does it affect me how to affect my family if right well that's good it's all it matters so yeah well glad you joined us man i know that we're work we're selling a few assets right now we bought a few assets last week um we're seeing some in-floor influx of deals coming through um and things like that things are opening up a little bit right um there's some talks about the pa controver deed issue that's possibly going down with that's an interesting stuff yeah yeah i had that call from the ag years ago this five or six years ago and yeah that was a scary call but in the end you know didn't again luckily i had already foreclosed through all the proper channels everything else was all good and i've i had already actually sold the property yeah so it didn't actually come back to me at all but uh but it's out there yeah if you're not and if you don't know what we're talking about check looking good i did not expect what came out of me posting that so i'm glad you felt cool with it so yeah uh somebody said hello to everyone so i'm glad feel free to post comments and questions below um i think today's video is gonna be really really neatly heard we're gonna get from this thing right and we'll this recording will be on youtube and facebook all the good stuff and check out nathan's facebook uh group he's running some stuff and his youtube channel too so make sure you promote it um we'll have this on there anything is something you're going to have to listen to a few times this will if if you're learning what you're learning this can change how you do business and your profits so this is a key thing there are some things we got to make sure of however just take some information and put in your back pockets for when you need to use it it's available cool yeah so um nathan you and i've been through foreclosures before um i think sometimes more than we should want of it yes um many times and and sometimes it's not a big deal other times it's a big deal and it's a big ordeal i've had two i know we're talking specifically about new york i've done two new york notes and i've sworn off new york composers were such a headache we're going to start your mind yeah i'm hoping that this would open some doors again i think i can for me foreclosure start off as a really crazy system that we didn't understand came to a point where it was a systematic thing and we knew when to check in bullet points we knew when a deal was good we went past judgment a judgment date and all that stuff and we have all that stuff's good but the time frame is a big deal and that's huge right the cost we produce a little bit it doesn't change much but time is money in our business taxes everything to play with it yeah so i'm in a conference talking um and i meet a couple gentlemen who talk about this thing called foreclosure right federal processes right and then i jump on a phone call with them uh that i think was gonna be a ten minute call emptying much longer and i was astonished to learn that that there's been some notes we could have done save money time increase profits and bid lower simply because of the different processes that we didn't understand so understand that we need to learn everything to go and play um i haven't yet gone through the foreclosure process most of our assets right now either have done or performing so we're grateful we're stuck in bk so we're right now grateful for where we're at um and we sold a couple we're gonna get into foreclosure but nathan have you done any foreclosure recently with the whole covid craziness oh yeah yeah um i'm i've got several in foreclosure at any given time so it's it's a pretty common thing for me for the most part it's not a big deal uh my main aaron can tell you tuesday is my attorney day so every tuesday if i haven't heard from you all right if if you know there's something where i've asked you a question you haven't answered yet i follow up on tuesdays and so that's that's my attorney follow-up date and and it takes several hours to uh to go through everything and and make sure that everything is up to where it needs to be did we file that thing that we said we're going to file or whatever it is and just kind of keeping up interesting yeah i think for me you know it it's been a it's a hassle and it is a bothersome sometimes we want to get through fast we want it right so we invited lance on who's sitting here with smile on the face who's been doing this foreclosure process i think he told us for about six months now right lance you've been doing foreclosures only about six months yes it's similar between six months and 35 years i wasn't i don't remember can you tell us a little about your background how you got involved what have you been doing for 35 years your life well let me start at the beginning with getting this out of the way that anything that i'm talking about today is not to be construed by anybody on this on this call or on this webinar as specific legal advice the only way we can give you legal advice is if the firm is formally retained and you're not to take anything that i'm saying as specific advice for any specific set of circumstances this is all general and okay another disclaimer now that the miranda rights are out there i've been doing default work now for about 35 years i i ended up stumbling into this uh purely accidentally i was doing some regular real estate residential real estate and i was a collection attorney and a friend of mine from law school who is just retired from the pennsylvania governor's office as the council was leaving new york and handed me a box full of files and said good luck i'm out of here and that was how i got into the reo business uh it started off with lease servicing which was later required by superior bank and a wonderful client then and still some amazing people i work with and that that was the springboard to get me into this industry so i've been practicing default work for banks and servicers and note holders now it's about 35 years and that's a long long time but it's it's been a journey it's been yeah a lot of things and i started off with a full head of hair and this is what happened to me so yeah so that the the conversation is about federal court let me start off by explaining the biggest differences between federal court and state court at least in new york in state court all judges are elected or appointed by somebody who's elected which means that there's always a political element to a state court judge in new york no matter how good or how learned the judge is the judge is is on the bench as a result of some political process and you can't remove that element from the process because the judge a judge's job is not only to sit on the bench and and act as a judge but also in the interest of self-preservation to get re-elected or to get moved up to a higher court as as time goes by and we can't we can't get that process that that element out of the way in a state court process and it's going to vary from the impact of that will vary from judge to judge federal court conversely federal court judges are appointed by congress it's a lifetime appointment it is very very very difficult to remove a federal court judge and in my experience almost without exception almost every federal court judge is of of a much higher caliber than a typical state court judge and i'm not in any way demeaning the state court judges but there are different requirements to being a state court judge than there is to being a federal court judge the federal court judges are typically the cream of the crop it's it's a heart it's a really long and difficult process to get an appointment from congress to be a federal court judge and i just saw on the news today that president biden has his pick for the supreme court justice to be and you will see the process that goes through so by the time we get into federal court we are typically in front of the judge who is removed for the most part from the political process the judge doesn't have to worry about being going up for election every two to four years it's a lifetime appointment and they can sit back and do their job without interference by anybody else the federal court docket is also much much much smaller than the state court docket and most importantly the federal court system is funded better typically than the state court system which means that there were more clerks there were more resources and the and the not only more in terms of quantity but also in terms of quality because the clerks for state court court justices i have a different role than a clerk for because it's it's not double the price the legal fees are are more than the fannie mae rates the the the reason that we're able to do this our law firm is able to do this because we identify this sounds politically incorrect and i'm going to apologize to anybody everybody ahead of time we identify as a boutique law firm uh meaning that we we we we're not one size fits all for everybody we're not a fannie mae factory uh or a freddie mac foreclosure mill we don't have that kind of volume in federal court the rules require that the attorney who signs the complaint is the attorney on the case and that's it so we can't send appearance counsel into federal court like we can in state court so that of course raises raises the fees and uh there are a couple of other fees which are a wee bit higher so if you spend another two or three thousand in legal fees on a foreclosure but you're in and out of court in six months rather than six years i would say you're ahead of the game yeah and it also allows you to bid on the notes you can bid um on the note sales much much more competitively than the buyers who are expecting to go into state court they're bidding based upon a three four five year time frame and you're bidding on based upon a six to 12 month time frame wow there you have it you know everyone understand the fact you get your money faster you're not paying the property tax bill for another month or so right and the fourth price insurance yeah and close violations server surveys right all those things add up that that two grand is probably a net much higher right so i don't give advice i don't take so i had a pool of loans that i bought recently one we were able to get into federal court uh i i my name wasn't on it so i didn't have a problem with that so this gives me the opportunity to tell you about what you need to do to get into federal court first the case has to involve money over 75 better staffing better timelines and control over the motion process you're more likely to have a favorable outcome on a more favorable timeline on an outcome on a foreclosure in new york than if you were in state court during covid we were keeping track of of our federal court cases during cobit and we had about half a dozen that we had completed in other words from the filing of the complaint to the judgment not the sale because we don't have control over the sale timeline but from judgment from filing the complaint to the judgment which is really the end of the process under six months we had some in the 160 65 167 day timeline we had one for 179 days under six months and we had a whole stack of them well under one year districts in new york there's the southern district which is mostly new york city there's the eastern district which is long island and brooklyn and uh and then you have the northern and western districts these were uh two of them i believe were southern two were eastern and a couple upstate but even in the upstate courts which aren't as as state courts which aren't as slow as downstate to get in and out in under a year is unheard of in state court that's just not happening usually what my experience was it's usually about 280 to 360 minimums and then you're above that usually 280 to 360.

that you coast coven it's just the beginning of postcovid in new york the moratorium on foreclosures and evictions ended january 15th so that's about a month ago so we're still working our way through the new world but my my personal estimate is for downstate new york where most of the activity is meaning new york city long island westchester rockland whatever the time frames were pre-coveted add on between 50 or double the time frames yeah both of my both of my foreclosures that i had were were upstate new york and both of them took over two years yeah which is for upstate new york isn't too bad to me that's ridiculous i agree with you it's an abomination that that anything should take nothing should take that long to enforce it if you don't pay your car loan we need to do auto repossession work and if if you don't pay your car loan your car is going to be hauled off in a matter of days on the back of the truck but there are different rules that apply you can't repossess a home you can't jack it up and put it on a trailer and tow it away typically and there are different rules that apply but right now what we're seeing is not only the backlog in the court system from things log jam during covet and also the new filings that have started but you add to that process the fact that we can't do auctions in the courtrooms like we used to do and there has to be safety protocols in place post covert which means and there are also safety protocols in the courtroom so in brooklyn for example on a typical day in kings county during in the foreclosure parts you would see hundreds if not thousands of people jammed into the building waiting for something to happen that's not that's that's not the case anymore so the existing log jam is logjam further and then add on to that all of the files that have been backlogged for two years and the lack of activity it's anybody's guess what's going to happen so what you're saying lance is that we typically go through a year plus with upstate new york and you're telling me you're able to do it in six months it depends on each case stands out but but we've had we've had enough cases in the six-month range that i could tell you that it's possible because i know it's possible because it's happened that can can it happen again if it's happened once it can happen again it's happening the question is is it more expensive than to do this i mean it's a short time frame it's great is it double the price foreclosure i'm going to send my demand letter and it's almost almost quick it's it's automated right get the demand letter sent out my attorneys get filed start the process through federal court this check and balance is how long should we expect a delay to review and make sure that it can be deemed appropriate for federal court it depends upon what you send us but when we had a review trusting and pulling agreements that were five six hundred pages well it's going to take longer than if you're a one-man llc and i just and i've just got to do some basic checks on you individually and see where the llc is set up that's moments but the the trustee and pooling agreement was several hours gotcha so it sounds to me this for us as individual investors llcs would be you know what partner two this is probably the same period of time as a normal state foreclosure process they get initiated started send the man letter out they get a letter from the federal system versus the state most of the time the bardo is doing different until they try to reach out to an attorney and tony says whoa that's a different level i can or can't do it or i'd rather not um it probably scares a lot of a lot of borrower attorneys defense attorneys to walk away from it would it not it it does well we don't know who we obviously would never know who said no to taking on the case we only know who says yes to taking on the case but i can tell you that the a lot of the the attorneys with the billboards uh don't appear in federal court because it's it's a they make their money in order to pay for these billboards on the throughways you have to have a lot of files coming in this isn't a personal injury case where that you settle for 10 million dollars these are people who are paying you hundreds of dollars or several thousand dollars so you need a lot of them and you can't do volume in federal court for the same reason because that i said the attorney who signs the complaint is the attorney who's on the file so some in a in a state court you can have case you can have anybody appear on behalf of the firm what happens if i unknown i start federal court thyself nathan does he have to use the same attorney no you can switch your the attorney is always your choice you can always switch attorneys if you want in or out and and that's the nature of this business we we get files pulled from other law firms to come here and we get files pulled from us to go to other law firms as servicing or ownership gets transferred it's the nature of the beast gotcha you know we avoid new york for multiple reasons one of them is a foreclosure process right but this gives a loophole we talk about things um it opens that angle of let's explore it let's see if those loans are worth it and see if we can negotiate because of time frame changes um making sure the numbers are there make sure you know obviously we know our our 23 1 23andme situation and be good with that so is it you know when these things take place the clients you work with is there anything that they need to do differently um the servers need to do anything differently is pretty much everything to start the process and manage the process the similar as in state court no it's not the steps are different so it depending upon not all servicers are equipped to handle federal court cases and i can tell you when we board a portfolio for our clients with a servicer who is not a doesn't have a federal process in place uh it's it's a it's a lot more work for us because for example that there's no mediation let's start with that and the time frames are different and the the the um the billing is different the billing steps are different okay so if a client if anybody wants to use us and 000 that's easy that's virtually everything in new york except for possibly some small second mortgages will be over 75 000.

number one number two you have to have what's called diversity diversity means that the plaintiff is a different citizen than the defendants and that's where it gets tricky uh we have i have two three of our very very skilled associates on with us in the background and they can tell you when they get a file and we do a diversity check which means we we do it we have to check the llc who owns the llc if the llc is owned by other llc's who owns the those llc's so the ownership it's almost like a 23andme or an ancestry.com family tree we we have to do the entire family tree for the entity that owns the loan for small private investors it's very easy if if you are buying a loan and you live in pennsylvania you you don't vote in new york you don't have an address in new york you have no contact with new york except to comment occasionally and see a broadway show and you set up a pennsylvania llc that removes one of the big obstacles in the diversity check we would just have to make sure that none of the defendants who are named in the foreclosure have a pennsylvania address that's our work are the bulk of our work the real heavy lifting is done the first few minutes we get the file because we have to check the diversity but when there's a for example with the banks that own properties buy a trust what was i'm holding up my hand we'll see trust agreements that are this thing they have to be reviewed because this we found the heart found out the hard way there's sometimes something buried deep inside the trust agreement that will kill the diversity that we're looking for so what we're saying is just to recap is that the the balanced legal balance alone has to be above 75 75 000 right right and that no party from the defense side llc or person husband wife anyone on defense side can't have a residency the property could be in new york but they have a brethren's empa you cannot file in court with them in federal court because the fact that if you live in pa or the companies in fba then you can't but if you're in florida all's good that's that's generally the case we'd have to examine it on a case-by-case basis because the florida for example there are an untold number of people who have florida residences who still keep their new york residents so even far even though florida may be their 186th day a year residents for tax purposes the other 184 days are in new york and that may create a problem so we have to examine each case on a case-by-case basis it's in in state court all you need to go into state court is a mortgage that was filed against the property located in new york bingo now you can use the state courts but federal court is a little bit more restricted because of of the rules and and the u.s constitution and the way federal courts are set up so generally speaking what you said was correct okay so i got two questions so first one is foreigners companies do this the answer is it depends upon the citizenship and we would have to review that on a case-by-case basis we we don't have too many foreigners uh with all due respect to our friends from the great white north we don't have too many coming in here to buy loans and foreclose so but if you find yourself buying considering buying a loan and and want to do this in federal court i would suggest contact us first and we can help you establish the parameters for the purchase but just let me give you a caveat before i forget sure if a case is already pending in state court you can't stop it and hop over to federal court but if you're starting a case anew you can access the federal court if you meet all the timelines and those guidelines rather i'm sorry i interrupted that that's okay so kind of a follow-up question so um i just opened this fund and the fund is a limited partnership it was created the limited partnership is delaware the limited partners are are from all over the place so if if there's a limited partner within that partnership with new york residency does that exclude us not if you if it's a new or if any of the owners of the again think of it as a family tree you're looking for second third and fourth cousins yeah if any of those second third and fourth fifth and sixth cousins twice removed three times removed if anybody is considered a new york citizen then you're going to be uh you're not going to be able to get into federal court we have to do the family tree we had a very large large large wall street hedge fund find out that the hard way they set up this was there was a one new york citizen seven generations removed from the llc that owned the note and that was enough to get us thrown out wow yeah so if the the answer is uh you have this these are the things that we have to examine because we have to make a certification as the attorneys when we file the papers that the case is that we've met the diversity test and you don't want to run a follow that because if you if you blunder that and you come back into court another time with a qualifying llc you don't you don't want to you don't want to have a black eye in federal court it doesn't do you well a lot with that said though what are the typical you know processes that are quicker is it the fact that the defendant can't get an attorney who knows it is it the fact that the judge is very strict on the timelines uh besides not being able to take the canada what are some of the things that make it faster well first they're in new york for residential mortgages there's typically a mandatory mediation process or as i like to call it let's string this out for another year and and especially with what's going on now in the busy courts it's going to be the the better part of the year just to go through the mediation process so you're you're already a year behind then then you start the actual foreclosure process there are emotions all sorts of ways to delay and the judges frankly are overwhelmed the clerks are overwhelmed you take the mediation process out of the out of the uh dynamic and you've already shaved a year in current in the current world you've shaped the better part of a year off of off of the timelines you also take away the nonsense motions and then and the post judgment order to show cause or two or three or four or five and you've eliminated that it's also very easy to file an appeal in state court it's very very easy it's not quite as easy to file that same appeal in federal court or to process the appeal process uh properly it's it's so the we've seen in state court where we win the case we get our judgment and the borrower walks across the street to state appeals court there's a pro se part in there the clerk helps them fill out the form one page you waive the fee because they're poor and that's it now right now we're back to the beginning the case is stopped pending the appeal it's more difficult to do that in federal court but the most significant factor is that in federal court as opposed to most state court judges the judges in federal court do control the timelines and they monitor it brutally carefully uh it's with with with with great precision and it's it's a it's a different process uh the and then when we get to the sales it's also a little bit more dignified too so so could you i mean i know i'm i know you're in new york is this something that could be done in texas and florida are the rules different or well if the answer is the the first question would be is it worthwhile to do this in another state if you're in a non-judicial state there's no sense in going into court in the first place if you're in a judicial state then it depends upon the timelines because some state some judicial states get you in and out in under a year so federal court isn't going to make sense but in the notoriously slow states for example new jersey new york i think massachusetts is also a little bit a little bit lumbering if you can access the federal courts then that's something to consider and i would urge you to check with local council who handles foreclosures in both state and federal court in new york most of the firms uh that handle foreclosures don't handle federal court simply because this the staffing issue and they can't use appearance counsel and also that their clients won't qualify for federal court either the banks or the the uh the fannie freddie agencies like that aren't going to qualify so it's of necessity you need to check with the firm and find out who does the largest volume in that state the people who who are there in that federal court every day or who are a brand name and a known entity to the judges and the clerks makes a difference i understand so if you've got um you mentioned like the the judge keeps a very rigid timeline on that i just i'm i'm gonna infer that then you can't just go with any attorney because because if they're already overworked and overloaded with whatever else they're doing in the state courts it'd be very easy to miss one of these deadlines it's not only easy to miss it you have to know who you're in front of and each judge has his or her own peccadillos and and each judge has his or her own rules and federal court isn't the place to to hasn't yet picked the servicer to handle the the the servicing process of it we could let you know who we were working with who is equipped for federal court and who who's not not all of them are okay so i have a list here actually that i'm looking at on my other screen where there are about a dozen or so new york loans which i immediately just put in the bottom of the pile i'm not interested however this this is an interesting twist so um like in in the comments section on the tape it says that uh a complaint has been filed so i'm assuming that's going to be state court so then if i was interested in in pursuing that would i just have them cancel that foreclosure and then i can restart it with federal we'd have to look it on a case-by-case basis so if you wanted to talk with us about those specific files just give a ring after the after the video is over we'll be happy to chat with you uh it's there are things that i that we could advise you to do based upon what the you know what the status of the case is and where it is and it may not even be worthwhile so if it's not worthwhile then i i wouldn't i don't want to take a case yeah but just for the sake of taking a case it doesn't it's not going to help anybody lynch is there a way for us as investors to know which servicers are federally qualified is there ah way to find it out um yeah but i i i wouldn't take it as my responsibility to advertise for any of the services so this is something i'd be happy to discuss offline with anybody who's interested who different services for all different reasons right if i need a workout reo i'm going one if i want automation simple easy if i want something where i can work the file myself i go to one servicer so we all pick our server based on that this would be an angle waiter if this thing looks like it's going foreclosure i'm going to switch to that servicer so i can utilize the foreclosure federal process a lot of our clients do that where they have a hands-off servicer and learn how to practice law and learn how to practice foreclosure law especially and if you're a good state court attorney that's that's where you belong in my opinion because you practice what you do best practice it where you do best we don't go into like the patent and trademark court we're not patent and trademark attorneys we're not admiralty attorneys so if your boat gets hit by by somebody else's vote please don't call me we can't help you because that's not the area of law that we practice and the same it should be no different you don't you don't call your obstetrician when you break your leg you call an orthopedist and they're the same way that doctors limit their practice or specialize in certain areas so so too we have a team i've got three people on this call who do nothing but federal court and it's it makes a difference in the outcome that's fascinating so i've i've heard about this years ago and it just caused kind of like this fabled unicorn federal court idea um are people not doing it just because it's unknown or or they are not qualified well here's here's one answer we got from a hedge fund uh the they were afraid of bad publicity for pursuing the foreclosures too quickly my response to that was because you foreclose so slowly you get good publicity and the answer obviously is no and by the way they ended up using us they sent a portion it was something that hadn't occurred to in-house counsel and i remember the discussion like wow he never thought of it that way so but but it's your the amount the the percentage of files that do end up in federal court is teeny teeny teeny because once you remove uh fannie freddie bank of america city chase wells all the all the the the big ones you've taken 98 of the loans out of the out of the pool potential pull for these foreclosures so the other several percent that's left are what we're talking about is there a difference in the auction and redemption periods and whatnot is that all similar processes we don't have a redemption period in new york that's one way of slowing down the process that hasn't happened yet yeah in new york uh but the auction process is is similar it's it the whole process apparent the whole federal court foreclosure process parallels the state court process except for the mediation there's no mediation if you want mediation if you're if you're foreclosing with the intent of getting the loan back on track or modifying it with the bar borrower it's a good way of putting pressure on the borrower because i can tell you from personal experience when you open up the mail and there's a summons from federal court your day is not getting any better yes you're there was a time by the way for whatever it's worth that uh we kept track that that my partner and i had more rico cases against us than john gotti that was a toll that the defendants were using at a time to try to stop the foreclosures they would lose the foreclosure and then they would turn around and go back into federal courts to the bank the title company all the attorneys one of them sued the judges we had a case where the judges were sued personally claiming that it was written that we all conspired and it was rico the racketeer influence corrupt organization act yeah so i had a bunch of them uh but you can use the foreclosure process especially federal court foreclosure because it's so it's so ominous as a tool to negotiate with the with your borrower for a modification or to get back some way to get back on track and many many many of our clients do that you don't want to take anybody's house away that's not what this is about this is about getting the there's a loan they signed the contract to make payments it's about getting everybody back on on board again and and back in compliance so typically when we we're going to file and they manage the process in-house and you just have the servicer for compliance reasons and that's okay uh and you can generally expect you're never going to have the volume in federal court that you will in state court so it's good to have uh you know i think somebody mentioned who went skiing or snowboarding somebody i did this but all right so you're going to have different equipment you're going to wear different clothing for snowboarding than you will for skiing yeah and your your the equipment is very different and you have one for one purpose and one set of equipment for the other purpose and it is the same thing applies to foreclosures not every servicer is good for everything not every lawyer is good for everything not every account is good for everything so if you have a an arsenal you use the best for the job at hand and your your firm you you just cover new york that's enough i think as i said again i started off with a full head of hair without naming names on the video that do what you do outside new york saying you know uh the most common states are like you know ohio's a long time period but uh florida is depending on the loan situation um do you have contacts that we can reach out to to to share and say this is the person ideally at work in those states we can get you that information by asking our clients who who have files in those states who do who handle federal court because they it's yeah absolutely and there are some very good attorneys in the area and again it's the the bigger firms are good for the very very large volume of files you buy a pool of 500 fannie mae files you're going to need a firm that can that can handle that volume but you buy two three files for federal court floodgates opening up here in new york just as an aside there was a problem in new york uh the the notices that we send out to start the foreclosure uh are 90 day notices and a local state court judge had ruled that the 90-day notice it's a complicated decision but essentially there can't be anything else in the envelope with that 90-day notice so the servicers and the lenders had to go and restart the processes all over again so the moratorium ended january 15th but it didn't so the moratorium ended probably until may or june because an untold number of loan of uh defaults had to be redeclared so are you guys seeing an influx yet are you seeing the numbers change no because of this 90-day notice problem so we've gotten some in but some of the lenders and services are holding back on referrals until after the the defaults are redeclared again with the new with the new letters that that swamped them they pulled i think they were having the the they were having the house cleaning crews coming in to to to get the stuff done it was all hands on deck situation for most companies and it distracted them from from doing the other work that was necessary and it's it's just starting now but again we don't we don't handle the the big we're not fannie or freddie attorneys and our clients tend to be a little bit smaller and much more nimble awesome lance i think the knowledge is awesome it's one of those things that we hear about at conferences hush hush talk you know conversation and most people probably knock it off with something that just doesn't work right maybe they had one file it didn't work for them so the unicorn is not real right and what you come to find out is that it is real for certain thicker cases and knowing those particulars are important you're going to need a sharper knife very interesting for lack of a better uh analogy so in this case the unicorn is real that's really interesting the unicorn is real the unicorn is real and and and you're welcome to come and pet the unicorn uh he's friendly and it's it's again it's not for every file it's not for every investor right it's but when it works it's absolutely incredible one of our potential clients on it we were interviewing to take over a portfolio and they asked us for time frames and i had no idea that the time frames were that quick i thought everything was around i was just typically quoting 12 to 18 months and we ran through the system and we had a stack of files that were six months or less even just by a few days but less than 180 days which is unfathomable in new york because you're not even getting into the mediation process yeah yeah by then you're not even in court you're not even in the court's parking lot by the time that that that takes place yeah wow that's fascinating so then what do you see coming down you mentioned a little bit before but maybe just expound on a little bit um are you seeing are are you foreseeing an increased amount of of delinquencies coming up um coming out of it and everything else let's take a look hold on one second i'm looking at my bad news oh the market's up almost 800 points i wonder what have that happened well it's the the rates the fed has made it clear that the rates are going uh i don't know if anybody still has adjustable rate loans but that's certainly going to impact there i don't think anybody in the industry has a a clear handle on the number of delinquencies some people have estimates but we haven't seen the flood the but you can save time you can save money in the long run that's what we're looking for good returns return that capital fast as possible you know and the bonus is by following federal court you're probably gonna get a mod faster because most borrowers can't get the attorney in place to do the federal and that's another win-win situation for all of us keep them in the house as long as possible get them paying everyone's happy so lance i think the information is valuable i appreciate you sharing with us i think this is awesome stuff that people should listen to over and over again and be thinking about not putting like me and nathan have done the new york access to the bottom of the list because we don't want to deal with year and a half two years of foreclosure where we both could be in a spot where we can easily follow these situations where i'm in jersey he's in canada we have nobody in new york um it would work out really really well for us so yeah i appreciate you and your team for jumping on friday afternoon um and spend a little time with us a pleasure thank you so much guys for and everybody else for for tuning in and i hope this was helpful for everyone if there are any questions you can uh email me directly did you is my email address on there you can definitely speak it we'll share it to whoever needs it too fantastic the email address is simple it's lance l-a-n-c-e at ny like new york f is in france c is in cat law law.com lance nyfclaw.com clever huh very nice it works lance again i appreciate it thank you for joining in and uh sharing some time with us thank you so much for having me you bet thank you take care guys you i haven't heard anything right i know at the end of the day we don't know what's happening or else as long as we're doing okay we got to focus what we can do right we can only do what we can do and i think for me you know we're curious it comes back to curiosity right yeah i don't really pay very much attention in everything that i do my main focus is how is this going to affect my business that's that's really what it comes down to for me um i don't get too upset otherwise yeah it's you know how does it affect me how to affect my family if right well that's good it's all it matters so yeah well glad you joined us man i know that we're work we're selling a few assets right now we bought a few assets last week um we're seeing some in-floor influx of deals coming through um and things like that things are opening up a little bit right um there's some talks about the pa controver deed issue that's possibly going down with that's an interesting stuff yeah yeah i had that call from the ag years ago this five or six years ago and yeah that was a scary call but in the end you know didn't again luckily i had already foreclosed through all the proper channels everything else was all good and i've i had already actually sold the property yeah so it didn't actually come back to me at all but uh but it's out there yeah if you're not and if you don't know what we're talking about check looking good i did not expect what came out of me posting that so i'm glad you felt cool with it so yeah uh somebody said hello to everyone so i'm glad feel free to post comments and questions below um i think today's video is gonna be really really neatly heard we're gonna get from this thing right and we'll this recording will be on youtube and facebook all the good stuff and check out nathan's facebook uh group he's running some stuff and his youtube channel too so make sure you promote it um we'll have this on there anything is something you're going to have to listen to a few times this will if if you're learning what you're learning this can change how you do business and your profits so this is a key thing there are some things we got to make sure of however just take some information and put in your back pockets for when you need to use it it's available cool yeah so um nathan you and i've been through foreclosures before um i think sometimes more than we should want of it yes um many times and and sometimes it's not a big deal other times it's a big deal and it's a big ordeal i've had two i know we're talking specifically about new york i've done two new york notes and i've sworn off new york composers were such a headache we're going to start your mind yeah i'm hoping that this would open some doors again i think i can for me foreclosure start off as a really crazy system that we didn't understand came to a point where it was a systematic thing and we knew when to check in bullet points we knew when a deal was good we went past judgment a judgment date and all that stuff and we have all that stuff's good but the time frame is a big deal and that's huge right the cost we produce a little bit it doesn't change much but time is money in our business taxes everything to play with it yeah so i'm in a conference talking um and i meet a couple gentlemen who talk about this thing called foreclosure right federal processes right and then i jump on a phone call with them uh that i think was gonna be a ten minute call emptying much longer and i was astonished to learn that that there's been some notes we could have done save money time increase profits and bid lower simply because of the different processes that we didn't understand so understand that we need to learn everything to go and play um i haven't yet gone through the foreclosure process most of our assets right now either have done or performing so we're grateful we're stuck in bk so we're right now grateful for where we're at um and we sold a couple we're gonna get into foreclosure but nathan have you done any foreclosure recently with the whole covid craziness oh yeah yeah um i'm i've got several in foreclosure at any given time so it's it's a pretty common thing for me for the most part it's not a big deal uh my main aaron can tell you tuesday is my attorney day so every tuesday if i haven't heard from you all right if if you know there's something where i've asked you a question you haven't answered yet i follow up on tuesdays and so that's that's my attorney follow-up date and and it takes several hours to uh to go through everything and and make sure that everything is up to where it needs to be did we file that thing that we said we're going to file or whatever it is and just kind of keeping up interesting yeah i think for me you know it it's been a it's a hassle and it is a bothersome sometimes we want to get through fast we want it right so we invited lance on who's sitting here with smile on the face who's been doing this foreclosure process i think he told us for about six months now right lance you've been doing foreclosures only about six months yes it's similar between six months and 35 years i wasn't i don't remember can you tell us a little about your background how you got involved what have you been doing for 35 years your life well let me start at the beginning with getting this out of the way that anything that i'm talking about today is not to be construed by anybody on this on this call or on this webinar as specific legal advice the only way we can give you legal advice is if the firm is formally retained and you're not to take anything that i'm saying as specific advice for any specific set of circumstances this is all general and okay another disclaimer now that the miranda rights are out there i've been doing default work now for about 35 years i i ended up stumbling into this uh purely accidentally i was doing some regular real estate residential real estate and i was a collection attorney and a friend of mine from law school who is just retired from the pennsylvania governor's office as the council was leaving new york and handed me a box full of files and said good luck i'm out of here and that was how i got into the reo business uh it started off with lease servicing which was later required by superior bank and a wonderful client then and still some amazing people i work with and that that was the springboard to get me into this industry so i've been practicing default work for banks and servicers and note holders now it's about 35 years and that's a long long time but it's it's been a journey it's been yeah a lot of things and i started off with a full head of hair and this is what happened to me so yeah so that the the conversation is about federal court let me start off by explaining the biggest differences between federal court and state court at least in new york in state court all judges are elected or appointed by somebody who's elected which means that there's always a political element to a state court judge in new york no matter how good or how learned the judge is the judge is is on the bench as a result of some political process and you can't remove that element from the process because the judge a judge's job is not only to sit on the bench and and act as a judge but also in the interest of self-preservation to get re-elected or to get moved up to a higher court as as time goes by and we can't we can't get that process that that element out of the way in a state court process and it's going to vary from the impact of that will vary from judge to judge federal court conversely federal court judges are appointed by congress it's a lifetime appointment it is very very very difficult to remove a federal court judge and in my experience almost without exception almost every federal court judge is of of a much higher caliber than a typical state court judge and i'm not in any way demeaning the state court judges but there are different requirements to being a state court judge than there is to being a federal court judge the federal court judges are typically the cream of the crop it's it's a heart it's a really long and difficult process to get an appointment from congress to be a federal court judge and i just saw on the news today that president biden has his pick for the supreme court justice to be and you will see the process that goes through so by the time we get into federal court we are typically in front of the judge who is removed for the most part from the political process the judge doesn't have to worry about being going up for election every two to four years it's a lifetime appointment and they can sit back and do their job without interference by anybody else the federal court docket is also much much much smaller than the state court docket and most importantly the federal court system is funded better typically than the state court system which means that there were more clerks there were more resources and the and the not only more in terms of quantity but also in terms of quality because the clerks for state court court justices i have a different role than a clerk for a federal court judge so we're in front of typically very learned people with with good pedigree and without the political element to it the best part about federal court that we've found as opposed to state court in state court anybody who's owned a note and foreclosed on it in new york knows that you have endless litigation nonsense litigation to stall off the process and as long as the defendant is capable of making motions or the attorney has been paid to make motions the motions will keep coming or just to show cause after the foreclosure is completed to try to vacate the foreclosure things that'll tie you up for years that process doesn't exist in federal court in federal court you can't make a motion without the approval from the judge so there's no such thing as serial not junk motions to stall down the process the federal court system is also the the the judge is in federal court typically have micromanagement control over the timelines and and they watch every every day and we get reminders and much much more is expected of the attorneys in new york in federal court than put typically in state court we found that to be a distinct advantage because the attorneys who customarily represent defendants in foreclosures more times than not don't have the skill or the time to defend the case in federal court in the in the same way they would in state court stakeholders often just simply about stalling to let your client live in the house for as long as possible that doesn't work in federal court the judges as a rule of thumb don't allow it and god help anybody who who gets in the way of the federal court judge timelines and instructions so by the time you whittle this down you with it with a typically a better a better bench a better set of judges with better equipped courthouses better better staffing better timelines and control over the motion process you're more likely to have a favorable outcome on a more favorable timeline on an outcome on a foreclosure in new york than if you were in state court during covid we were keeping track of of our federal court cases during cobit and we had about half a dozen that we had completed in other words from the filing of the complaint to the judgment not the sale because we don't have control over the sale timeline but from judgment from filing the complaint to the judgment which is really the end of the process under six months we had some in the 160 65 167 day timeline we had one for 179 days under six months and we had a whole stack of them well under one year districts in new york there's the southern district which is mostly new york city there's the eastern district which is long island and brooklyn and uh and then you have the northern and western districts these were uh two of them i believe were southern two were eastern and a couple upstate but even in the upstate courts which aren't as as state courts which aren't as slow as downstate to get in and out in under a year is unheard of in state court that's just not happening usually what my experience was it's usually about 280 to 360 minimums and then you're above that usually 280 to 360.

that you coast coven it's just the beginning of postcovid in new york the moratorium on foreclosures and evictions ended january 15th so that's about a month ago so we're still working our way through the new world but my my personal estimate is for downstate new york where most of the activity is meaning new york city long island westchester rockland whatever the time frames were pre-coveted add on between 50 or double the time frames yeah both of my both of my foreclosures that i had were were upstate new york and both of them took over two years yeah which is for upstate new york isn't too bad to me that's ridiculous i agree with you it's an abomination that that anything should take nothing should take that long to enforce it if you don't pay your car loan we need to do auto repossession work and if if you don't pay your car loan your car is going to be hauled off in a matter of days on the back of the truck but there are different rules that apply you can't repossess a home you can't jack it up and put it on a trailer and tow it away typically and there are different rules that apply but right now what we're seeing is not only the backlog in the court system from things log jam during covet and also the new filings that have started but you add to that process the fact that we can't do auctions in the courtrooms like we used to do and there has to be safety protocols in place post covert which means and there are also safety protocols in the courtroom so in brooklyn for example on a typical day in kings county during in the foreclosure parts you would see hundreds if not thousands of people jammed into the building waiting for something to happen that's not that's that's not the case anymore so the existing log jam is logjam further and then add on to that all of the files that have been backlogged for two years and the lack of activity it's anybody's guess what's going to happen so what you're saying lance is that we typically go through a year plus with upstate new york and you're telling me you're able to do it in six months it depends on each case stands out but but we've had we've had enough cases in the six-month range that i could tell you that it's possible because i know it's possible because it's happened that can can it happen again if it's happened once it can happen again it's happening the question is is it more expensive than to do this i mean it's a short time frame it's great is it double the price because it's it's not double the price the legal fees are are more than the fannie mae rates the the the reason that we're able to do this our law firm is able to do this because we identify this sounds politically incorrect and i'm going to apologize to anybody everybody ahead of time we identify as a boutique law firm uh meaning that we we we we're not one size fits all for everybody we're not a fannie mae factory uh or a freddie mac foreclosure mill we don't have that kind of volume in federal court the rules require that the attorney who signs the complaint is the attorney on the case and that's it so we can't send appearance counsel into federal court like we can in state court so that of course raises raises the fees and uh there are a couple of other fees which are a wee bit higher so if you spend another two or three thousand in legal fees on a foreclosure but you're in and out of court in six months rather than six years i would say you're ahead of the game yeah and it also allows you to bid on the notes you can bid um on the note sales much much more competitively than the buyers who are expecting to go into state court they're bidding based upon a three four five year time frame and you're bidding on based upon a six to 12 month time frame wow there you have it you know everyone understand the fact you get your money faster you're not paying the property tax bill for another month or so right and the fourth price insurance yeah and close violations server surveys right all those things add up that that two grand is probably a net much higher right so i don't give advice i don't take so i had a pool of loans that i bought recently one we were able to get into federal court uh i i my name wasn't on it so i didn't have a problem with that so this gives me the opportunity to tell you about what you need to do to get into federal court first the case has to involve money over 75 000 that's easy that's virtually everything in new york except for possibly some small second mortgages will be over 75 000.

number one number two you have to have what's called diversity diversity means that the plaintiff is a different citizen than the defendants and that's where it gets tricky uh we have i have two three of our very very skilled associates on with us in the background and they can tell you when they get a file and we do a diversity check which means we we do it we have to check the llc who owns the llc if the llc is owned by other llc's who owns the those llc's so the ownership it's almost like a 23andme or an ancestry.com family tree we we have to do the entire family tree for the entity that owns the loan for small private investors it's very easy if if you are buying a loan and you live in pennsylvania you you don't vote in new york you don't have an address in new york you have no contact with new york except to comment occasionally and see a broadway show and you set up a pennsylvania llc that removes one of the big obstacles in the diversity check we would just have to make sure that none of the defendants who are named in the foreclosure have a pennsylvania address that's our work are the bulk of our work the real heavy lifting is done the first few minutes we get the file because we have to check the diversity but when there's a for example with the banks that own properties buy a trust what was i'm holding up my hand we'll see trust agreements that are this thing they have to be reviewed because this we found the heart found out the hard way there's sometimes something buried deep inside the trust agreement that will kill the diversity that we're looking for so what we're saying is just to recap is that the the balanced legal balance alone has to be above 75 75 000 right right and that no party from the defense side llc or person husband wife anyone on defense side can't have a residency the property could be in new york but they have a brethren's empa you cannot file in court with them in federal court because the fact that if you live in pa or the companies in fba then you can't but if you're in florida all's good that's that's generally the case we'd have to examine it on a case-by-case basis because the florida for example there are an untold number of people who have florida residences who still keep their new york residents so even far even though florida may be their 186th day a year residents for tax purposes the other 184 days are in new york and that may create a problem so we have to examine each case on a case-by-case basis it's in in state court all you need to go into state court is a mortgage that was filed against the property located in new york bingo now you can use the state courts but federal court is a little bit more restricted because of of the rules and and the u.s constitution and the way federal courts are set up so generally speaking what you said was correct okay so i got two questions so first one is foreigners companies do this the answer is it depends upon the citizenship and we would have to review that on a case-by-case basis we we don't have too many foreigners uh with all due respect to our friends from the great white north we don't have too many coming in here to buy loans and foreclose so but if you find yourself buying considering buying a loan and and want to do this in federal court i would suggest contact us first and we can help you establish the parameters for the purchase but just let me give you a caveat before i forget sure if a case is already pending in state court you can't stop it and hop over to federal court but if you're starting a case anew you can access the federal court if you meet all the timelines and those guidelines rather i'm sorry i interrupted that that's okay so kind of a follow-up question so um i just opened this fund and the fund is a limited partnership it was created the limited partnership is delaware the limited partners are are from all over the place so if if there's a limited partner within that partnership with new york residency does that exclude us not if you if it's a new or if any of the owners of the again think of it as a family tree you're looking for second third and fourth cousins yeah if any of those second third and fourth fifth and sixth cousins twice removed three times removed if anybody is considered a new york citizen then you're going to be uh you're not going to be able to get into federal court we have to do the family tree we had a very large large large wall street hedge fund find out that the hard way they set up this was there was a one new york citizen seven generations removed from the llc that owned the note and that was enough to get us thrown out wow yeah so if the the answer is uh you have this these are the things that we have to examine because we have to make a certification as the attorneys when we file the papers that the case is that we've met the diversity test and you don't want to run a follow that because if you if you blunder that and you come back into court another time with a qualifying llc you don't you don't want to you don't want to have a black eye in federal court it doesn't do you well a lot with that said though what are the typical you know processes that are quicker is it the fact that the defendant can't get an attorney who knows it is it the fact that the judge is very strict on the timelines uh besides not being able to take the canada what are some of the things that make it faster well first they're in new york for residential mortgages there's typically a mandatory mediation process or as i like to call it let's string this out for another year and and especially with what's going on now in the busy courts it's going to be the the better part of the year just to go through the mediation process so you're you're already a year behind then then you start the actual foreclosure process there are emotions all sorts of ways to delay and the judges frankly are overwhelmed the clerks are overwhelmed you take the mediation process out of the out of the uh dynamic and you've already shaved a year in current in the current world you've shaped the better part of a year off of off of the timelines you also take away the nonsense motions and then and the post judgment order to show cause or two or three or four or five and you've eliminated that it's also very easy to file an appeal in state court it's very very easy it's not quite as easy to file that same appeal in federal court or to process the appeal process uh properly it's it's so the we've seen in state court where we win the case we get our judgment and the borrower walks across the street to state appeals court there's a pro se part in there the clerk helps them fill out the form one page you waive the fee because they're poor and that's it now right now we're back to the beginning the case is stopped pending the appeal it's more difficult to do that in federal court but the most significant factor is that in federal court as opposed to most state court judges the judges in federal court do control the timelines and they monitor it brutally carefully uh it's with with with with great precision and it's it's a it's a different process uh the and then when we get to the sales it's also a little bit more dignified too so so could you i mean i know i'm i know you're in new york is this something that could be done in texas and florida are the rules different or well if the answer is the the first question would be is it worthwhile to do this in another state if you're in a non-judicial state there's no sense in going into court in the first place if you're in a judicial state then it depends upon the timelines because some state some judicial states get you in and out in under a year so federal court isn't going to make sense but in the notoriously slow states for example new jersey new york i think massachusetts is also a little bit a little bit lumbering if you can access the federal courts then that's something to consider and i would urge you to check with local council who handles foreclosures in both state and federal court in new york most of the firms uh that handle foreclosures don't handle federal court simply because this the staffing issue and they can't use appearance counsel and also that their clients won't qualify for federal court either the banks or the the uh the fannie freddie agencies like that aren't going to qualify so it's of necessity you need to check with the firm and find out who does the largest volume in that state the people who who are there in that federal court every day or who are a brand name and a known entity to the judges and the clerks makes a difference i understand so if you've got um you mentioned like the the judge keeps a very rigid timeline on that i just i'm i'm gonna infer that then you can't just go with any attorney because because if they're already overworked and overloaded with whatever else they're doing in the state courts it'd be very easy to miss one of these deadlines it's not only easy to miss it you have to know who you're in front of and each judge has his or her own peccadillos and and each judge has his or her own rules and federal court isn't the place to to learn how to practice law and learn how to practice foreclosure law especially and if you're a good state court attorney that's that's where you belong in my opinion because you practice what you do best practice it where you do best we don't go into like the patent and trademark court we're not patent and trademark attorneys we're not admiralty attorneys so if your boat gets hit by by somebody else's vote please don't call me we can't help you because that's not the area of law that we practice and the same it should be no different you don't you don't call your obstetrician when you break your leg you call an orthopedist and they're the same way that doctors limit their practice or specialize in certain areas so so too we have a team i've got three people on this call who do nothing but federal court and it's it makes a difference in the outcome that's fascinating so i've i've heard about this years ago and it just caused kind of like this fabled unicorn federal court idea um are people not doing it just because it's unknown or or they are not qualified well here's here's one answer we got from a hedge fund uh the they were afraid of bad publicity for pursuing the foreclosures too quickly my response to that was because you foreclose so slowly you get good publicity and the answer obviously is no and by the way they ended up using us they sent a portion it was something that hadn't occurred to in-house counsel and i remember the discussion like wow he never thought of it that way so but but it's your the amount the the percentage of files that do end up in federal court is teeny teeny teeny because once you remove uh fannie freddie bank of america city chase wells all the all the the the big ones you've taken 98 of the loans out of the out of the pool potential pull for these foreclosures so the other several percent that's left are what we're talking about is there a difference in the auction and redemption periods and whatnot is that all similar processes we don't have a redemption period in new york that's one way of slowing down the process that hasn't happened yet yeah in new york uh but the auction process is is similar it's it the whole process apparent the whole federal court foreclosure process parallels the state court process except for the mediation there's no mediation if you want mediation if you're if you're foreclosing with the intent of getting the loan back on track or modifying it with the bar borrower it's a good way of putting pressure on the borrower because i can tell you from personal experience when you open up the mail and there's a summons from federal court your day is not getting any better yes you're there was a time by the way for whatever it's worth that uh we kept track that that my partner and i had more rico cases against us than john gotti that was a toll that the defendants were using at a time to try to stop the foreclosures they would lose the foreclosure and then they would turn around and go back into federal courts to the bank the title company all the attorneys one of them sued the judges we had a case where the judges were sued personally claiming that it was written that we all conspired and it was rico the racketeer influence corrupt organization act yeah so i had a bunch of them uh but you can use the foreclosure process especially federal court foreclosure because it's so it's so ominous as a tool to negotiate with the with your borrower for a modification or to get back some way to get back on track and many many many of our clients do that you don't want to take anybody's house away that's not what this is about this is about getting the there's a loan they signed the contract to make payments it's about getting everybody back on on board again and and back in compliance so typically when we we're going to file foreclosure i'm going to send my demand letter and it's almost almost quick it's it's automated right get the demand letter sent out my attorneys get filed start the process through federal court this check and balance is how long should we expect a delay to review and make sure that it can be deemed appropriate for federal court it depends upon what you send us but when we had a review trusting and pulling agreements that were five six hundred pages well it's going to take longer than if you're a one-man llc and i just and i've just got to do some basic checks on you individually and see where the llc is set up that's moments but the the trustee and pooling agreement was several hours gotcha so it sounds to me this for us as individual investors llcs would be you know what partner two this is probably the same period of time as a normal state foreclosure process they get initiated started send the man letter out they get a letter from the federal system versus the state most of the time the bardo is doing different until they try to reach out to an attorney and tony says whoa that's a different level i can or can't do it or i'd rather not um it probably scares a lot of a lot of borrower attorneys defense attorneys to walk away from it would it not it it does well we don't know who we obviously would never know who said no to taking on the case we only know who says yes to taking on the case but i can tell you that the a lot of the the attorneys with the billboards uh don't appear in federal court because it's it's a they make their money in order to pay for these billboards on the throughways you have to have a lot of files coming in this isn't a personal injury case where that you settle for 10 million dollars these are people who are paying you hundreds of dollars or several thousand dollars so you need a lot of them and you can't do volume in federal court for the same reason because that i said the attorney who signs the complaint is the attorney who's on the file so some in a in a state court you can have case you can have anybody appear on behalf of the firm what happens if i unknown i start federal court thyself nathan does he have to use the same attorney no you can switch your the attorney is always your choice you can always switch attorneys if you want in or out and and that's the nature of this business we we get files pulled from other law firms to come here and we get files pulled from us to go to other law firms as servicing or ownership gets transferred it's the nature of the beast gotcha you know we avoid new york for multiple reasons one of them is a foreclosure process right but this gives a loophole we talk about things um it opens that angle of let's explore it let's see if those loans are worth it and see if we can negotiate because of time frame changes um making sure the numbers are there make sure you know obviously we know our our 23 1 23andme situation and be good with that so is it you know when these things take place the clients you work with is there anything that they need to do differently um the servers need to do anything differently is pretty much everything to start the process and manage the process the similar as in state court no it's not the steps are different so it depending upon not all servicers are equipped to handle federal court cases and i can tell you when we board a portfolio for our clients with a servicer who is not a doesn't have a federal process in place uh it's it's a it's a lot more work for us because for example that there's no mediation let's start with that and the time frames are different and the the the um the billing is different the billing steps are different okay so if a client if anybody wants to use us and hasn't yet picked the servicer to handle the the the servicing process of it we could let you know who we were working with who is equipped for federal court and who who's not not all of them are okay so i have a list here actually that i'm looking at on my other screen where there are about a dozen or so new york loans which i immediately just put in the bottom of the pile i'm not interested however this this is an interesting twist so um like in in the comments section on the tape it says that uh a complaint has been filed so i'm assuming that's going to be state court so then if i was interested in in pursuing that would i just have them cancel that foreclosure and then i can restart it with federal we'd have to look it on a case-by-case basis so if you wanted to talk with us about those specific files just give a ring after the after the video is over we'll be happy to chat with you uh it's there are things that i that we could advise you to do based upon what the you know what the status of the case is and where it is and it may not even be worthwhile so if it's not worthwhile then i i wouldn't i don't want to take a case yeah but just for the sake of taking a case it doesn't it's not going to help anybody lynch is there a way for us as investors to know which servicers are federally qualified is there ah way to find it out um yeah but i i i wouldn't take it as my responsibility to advertise for any of the services so this is something i'd be happy to discuss offline with anybody who's interested who different services for all different reasons right if i need a workout reo i'm going one if i want automation simple easy if i want something where i can work the file myself i go to one servicer so we all pick our server based on that this would be an angle waiter if this thing looks like it's going foreclosure i'm going to switch to that servicer so i can utilize the foreclosure federal process a lot of our clients do that where they have a hands-off servicer and and they manage the process in-house and you just have the servicer for compliance reasons and that's okay uh and you can generally expect you're never going to have the volume in federal court that you will in state court so it's good to have uh you know i think somebody mentioned who went skiing or snowboarding somebody i did this but all right so you're going to have different equipment you're going to wear different clothing for snowboarding than you will for skiing yeah and your your the equipment is very different and you have one for one purpose and one set of equipment for the other purpose and it is the same thing applies to foreclosures not every servicer is good for everything not every lawyer is good for everything not every account is good for everything so if you have a an arsenal you use the best for the job at hand and your your firm you you just cover new york that's enough i think as i said again i started off with a full head of hair without naming names on the video that do what you do outside new york saying you know uh the most common states are like you know ohio's a long time period but uh florida is depending on the loan situation um do you have contacts that we can reach out to to to share and say this is the person ideally at work in those states we can get you that information by asking our clients who who have files in those states who do who handle federal court because they it's yeah absolutely and there are some very good attorneys in the area and again it's the the bigger firms are good for the very very large volume of files you buy a pool of 500 fannie mae files you're going to need a firm that can that can handle that volume but you buy two three files for federal court you're going to need a sharper knife very interesting for lack of a better uh analogy so in this case the unicorn is real that's really interesting the unicorn is real the unicorn is real and and and you're welcome to come and pet the unicorn uh he's friendly and it's it's again it's not for every file it's not for every investor right it's but when it works it's absolutely incredible one of our potential clients on it we were interviewing to take over a portfolio and they asked us for time frames and i had no idea that the time frames were that quick i thought everything was around i was just typically quoting 12 to 18 months and we ran through the system and we had a stack of files that were six months or less even just by a few days but less than 180 days which is unfathomable in new york because you're not even getting into the mediation process yeah yeah by then you're not even in court you're not even in the court's parking lot by the time that that that takes place yeah wow that's fascinating so then what do you see coming down you mentioned a little bit before but maybe just expound on a little bit um are you seeing are are you foreseeing an increased amount of of delinquencies coming up um coming out of it and everything else let's take a look hold on one second i'm looking at my bad news oh the market's up almost 800 points i wonder what have that happened well it's the the rates the fed has made it clear that the rates are going uh i don't know if anybody still has adjustable rate loans but that's certainly going to impact there i don't think anybody in the industry has a a clear handle on the number of delinquencies some people have estimates but we haven't seen the flood the floodgates opening up here in new york just as an aside there was a problem in new york uh the the notices that we send out to start the foreclosure uh are 90 day notices and a local state court judge had ruled that the 90-day notice it's a complicated decision but essentially there can't be anything else in the envelope with that 90-day notice so the servicers and the lenders had to go and restart the processes all over again so the moratorium ended january 15th but it didn't so the moratorium ended probably until may or june because an untold number of loan of uh defaults had to be redeclared so are you guys seeing an influx yet are you seeing the numbers change no because of this 90-day notice problem so we've gotten some in but some of the lenders and services are holding back on referrals until after the the defaults are redeclared again with the new with the new letters that that swamped them they pulled i think they were having the the they were having the house cleaning crews coming in to to to get the stuff done it was all hands on deck situation for most companies and it distracted them from from doing the other work that was necessary and it's it's just starting now but again we don't we don't handle the the big we're not fannie or freddie attorneys and our clients tend to be a little bit smaller and much more nimble awesome lance i think the knowledge is awesome it's one of those things that we hear about at conferences hush hush talk you know conversation and most people probably knock it off with something that just doesn't work right maybe they had one file it didn't work for them so the unicorn is not real right and what you come to find out is that it is real for certain thicker cases and knowing those particulars are important but you can save time you can save money in the long run that's what we're looking for good returns return that capital fast as possible you know and the bonus is by following federal court you're probably gonna get a mod faster because most borrowers can't get the attorney in place to do the federal and that's another win-win situation for all of us keep them in the house as long as possible get them paying everyone's happy so lance i think the information is valuable i appreciate you sharing with us i think this is awesome stuff that people should listen to over and over again and be thinking about not putting like me and nathan have done the new york access to the bottom of the list because we don't want to deal with year and a half two years of foreclosure where we both could be in a spot where we can easily follow these situations where i'm in jersey he's in canada we have nobody in new york um it would work out really really well for us so yeah i appreciate you and your team for jumping on friday afternoon um and spend a little time with us a pleasure thank you so much guys for and everybody else for for tuning in and i hope this was helpful for everyone if there are any questions you can uh email me directly did you is my email address on there you can definitely speak it we'll share it to whoever needs it too fantastic the email address is simple it's lance l-a-n-c-e at ny like new york f is in france c is in cat law law.com lance nyfclaw.com clever huh very nice it works lance again i appreciate it thank you for joining in and uh sharing some time with us thank you so much for having me you bet thank you take care guys you hey everyone dave putz here from jkp holdings alongside me as always mr nathan turner good day good day good day hopefully we have a little better audio situation here today um if we don't i'll go ahead and make sure we fix it pretty quickly as i think i figured out the issue over here but uh we'll go from there so nathan yes we're gonna get it out of the way first mentioned i guess in the room whatever canada is going through craziness right now from the state side but i'll get into detail how are you is everything going okay we're totally fine everything was was just so i'm i'm in just outside montreal i don't know if anything was happening in montreal at all um i hardly ever go into montreal it's you know i've got my home office so that's that's good enough for me as far as i know really everything was going on in ottawa um right at capitol hill so i mean it's fine everything's cleared now my friends in alberta were were upset because the border was blocked and that was uh you know inconvenient but really that's that's really all it was so we're fine everything's good we're good well i'm glad to hear that right because there was a few people mentioning how they were very curious how you're making out and of course yeah what we hear is a lot different from what is possibly happening yeah i i i just keep my head down keep doing what i'm doing whatever i went snowboarding this morning it was fantastic so it's good business as usual right for me yeah yeah i i know there were certain people that were you know it was really disruptive and and like i say inconvenient more than anything else but uh but by and large you know really business as usual right i'm glad to hear that man yeah thanks because you guys and i've heard of outside of canada new zealand in particular but we don't have anyone on the call from new zealand but anything else going on anywhere i haven't heard anything right i know at the end of the day we don't know what's happening or else as long as we're doing okay we got to focus what we can do right we can only do what we can do and i think for me you know we're curious it comes back to curiosity right yeah i don't really pay very much attention in everything that i do my main focus is how is this going to affect my business that's that's really what it comes down to for me um i don't get too upset otherwise yeah it's you know how does it affect me how to affect my family if right well that's good it's all it matters so yeah well glad you joined us man i know that we're work we're selling a few assets right now we bought a few assets last week um we're seeing some in-floor influx of deals coming through um and things like that things are opening up a little bit right um there's some talks about the pa controver deed issue that's possibly going down with that's an interesting stuff yeah yeah i had that call from the ag years ago this five or six years ago and yeah that was a scary call but in the end you know didn't again luckily i had already foreclosed through all the proper channels everything else was all good and i've i had already actually sold the property yeah so it didn't actually come back to me at all but uh but it's out there yeah if you're not and if you don't know what we're talking about check looking good i did not expect what came out of me posting that so i'm glad you felt cool with it so yeah uh somebody said hello to everyone so i'm glad feel free to post comments and questions below um i think today's video is gonna be really really neatly heard we're gonna get from this thing right and we'll this recording will be on youtube and facebook all the good stuff and check out nathan's facebook uh group he's running some stuff and his youtube channel too so make sure you promote it um we'll have this on there anything is something you're going to have to listen to a few times this will if if you're learning what you're learning this can change how you do business and your profits so this is a key thing there are some things we got to make sure of however just take some information and put in your back pockets for when you need to use it it's available cool yeah so um nathan you and i've been through foreclosures before um i think sometimes more than we should want of it yes um many times and and sometimes it's not a big deal other times it's a big deal and it's a big ordeal i've had two i know we're talking specifically about new york i've done two new york notes and i've sworn off new york composers were such a headache we're going to start your mind yeah i'm hoping that this would open some doors again i think i can for me foreclosure start off as a really crazy system that we didn't understand came to a point where it was a systematic thing and we knew when to check in bullet points we knew when a deal was good we went past judgment a judgment date and all that stuff and we have all that stuff's good but the time frame is a big deal and that's huge right the cost we produce a little bit it doesn't change much but time is money in our business taxes everything to play with it yeah so i'm in a conference talking um and i meet a couple gentlemen who talk about this thing called foreclosure right federal processes right and then i jump on a phone call with them uh that i think was gonna be a ten minute call emptying much longer and i was astonished to learn that that there's been some notes we could have done save money time increase profits and bid lower simply because of the different processes that we didn't understand so understand that we need to learn everything to go and play um i haven't yet gone through the foreclosure process most of our assets right now either have done or performing so we're grateful we're stuck in bk so we're right now grateful for where we're at um and we sold a couple we're gonna get into foreclosure but nathan have you done any foreclosure recently with the whole covid craziness oh yeah yeah um i'm i've got several in foreclosure at any given time so it's it's a pretty common thing for me for the most part it's not a big deal uh my main aaron can tell you tuesday is my attorney day so every tuesday if i haven't heard from you all right if if you know there's something where i've asked you a question you haven't answered yet i follow up on tuesdays and so that's that's my attorney follow-up date and and it takes several hours to uh to go through everything and and make sure that everything is up to where it needs to be did we file that thing that we said we're going to file or whatever it is and just kind of keeping up interesting yeah i think for me you know it it's been a it's a hassle and it is a bothersome sometimes we want to get through fast we want it right so we invited lance on who's sitting here with smile on the face who's been doing this foreclosure process i think he told us for about six months now right lance you've been doing foreclosures only about six months yes it's similar between six months and 35 years i wasn't i don't remember can you tell us a little about your background how you got involved what have you been doing for 35 years your life well let me start at the beginning with getting this out of the way that anything that i'm talking about today is not to be construed by anybody on this on this call or on this webinar as specific legal advice the only way we can give you legal advice is if the firm is formally retained and you're not to take anything that i'm saying as specific advice for any specific set of circumstances this is all general and okay another disclaimer now that the miranda rights are out there i've been doing default work now for about 35 years i i ended up stumbling into this uh purely accidentally i was doing some regular real estate residential real estate and i was a collection attorney and a friend of mine from law school who is just retired from the pennsylvania governor's office as the council was leaving new york and handed me a box full of files and said good luck i'm out of here and that was how i got into the reo business uh it started off with lease servicing which was later required by superior bank and a wonderful client then and still some amazing people i work with and that that was the springboard to get me into this industry so i've been practicing default work for banks and servicers and note holders now it's about 35 years and that's a long long time but it's it's been a journey it's been yeah a lot of things and i started off with a full head of hair and this is what happened to me so yeah so that the the conversation is about federal court let me start off by explaining the biggest differences between federal court and state court at least in new york in state court all judges are elected or appointed by somebody who's elected which means that there's always a political element to a state court judge in new york no matter how good or how learned the judge is the judge is is on the bench as a result of some political process and you can't remove that element from the process because the judge a judge's job is not only to sit on the bench and and act as a judge but also in the interest of self-preservation to get re-elected or to get moved up to a higher court as as time goes by and we can't we can't get that process that that element out of the way in a state court process and it's going to vary from the impact of that will vary from judge to judge federal court conversely federal court judges are appointed by congress it's a lifetime appointment it is very very very difficult to remove a federal court judge and in my experience almost without exception almost every federal court judge is of of a much higher caliber than a typical state court judge and i'm not in any way demeaning the state court judges but there are different requirements to being a state court judge than there is to being a federal court judge the federal court judges are typically the cream of the crop it's it's a heart it's a really long and difficult process to get an appointment from congress to be a federal court judge and i just saw on the news today that president biden has his pick for the supreme court justice to be and you will see the process that goes through so by the time we get into federal court we are typically in front of the judge who is removed for the most part from the political process the judge doesn't have to worry about being going up for election every two to four years it's a lifetime appointment and they can sit back and do their job without interference by anybody else the federal court docket is also much much much smaller than the state court docket and most importantly the federal court system is funded better typically than the state court system which means that there were more clerks there were more resources and the and the not only more in terms of quantity but also in terms of quality because the clerks for state court court justices i have a different role than a clerk for a federal court judge so we're in front of typically very learned people with with good pedigree and without the political element to it the best part about federal court that we've found as opposed to state court in state court anybody who's owned a note and foreclosed on it in new york knows that you have endless litigation nonsense litigation to stall off the process and as long as the defendant is capable of making motions or the attorney has been paid to make motions the motions will keep coming or just to show cause after the foreclosure is completed to try to vacate the foreclosure things that'll tie you up for years that process doesn't exist in federal court in federal court you can't make a motion without the approval from the judge so there's no such thing as serial not junk motions to stall down the process the federal court system is also the the the judge is in federal court typically have micromanagement control over the timelines and and they watch every every day and we get reminders and much much more is expected of the attorneys in new york in federal court than put typically in state court we found that to be a distinct advantage because the attorneys who customarily represent defendants in foreclosures more times than not don't have the skill or the time to defend the case in federal court in the in the same way they would in state court stakeholders often just simply about stalling to let your client live in the house for as long as possible that doesn't work in federal court the judges as a rule of thumb don't allow it and god help anybody who who gets in the way of the federal court judge timelines and instructions so by the time you whittle this down you with it with a typically a better a better bench a better set of judges with better equipped courthouses better better staffing better timelines and control over the motion process you're more likely to have a favorable outcome on a more favorable timeline on an outcome on a foreclosure in new york than if you were in state court during covid we were keeping track of of our federal court cases during cobit and we had about half a dozen that we had completed in other words from the filing of the complaint to the judgment not the sale because we don't have control over the sale timeline but from judgment from filing the complaint to the judgment which is really the end of the process under six months we had some in the 160 65 167 day timeline we had one for 179 days under six months and we had a whole stack of them well under one year districts in new york there's the southern district which is mostly new york city there's the eastern district which is long island and brooklyn and uh and then you have the northern and western districts these were uh two of them i believe were southern two were eastern and a couple upstate but even in the upstate courts which aren't as as state courts which aren't as slow as downstate to get in and out in under a year is unheard of in state court that's just not happening usually what my experience was it's usually about 280 to 360 minimums and then you're above that usually 280 to 360.

that you coast coven it's just the beginning of postcovid in new york the moratorium on foreclosures and evictions ended january 15th so that's about a month ago so we're still working our way through the new world but my my personal estimate is for downstate new york where most of the activity is meaning new york city long island westchester rockland whatever the time frames were pre-coveted add on between 50 or double the time frames yeah both of my both of my foreclosures that i had were were upstate new york and both of them took over two years yeah which is for upstate new york isn't too bad to me that's ridiculous i agree with you it's an abomination that that anything should take nothing should take that long to enforce it if you don't pay your car loan we need to do auto repossession work and if if you don't pay your car loan your car is going to be hauled off in a matter of days on the back of the truck but there are different rules that apply you can't repossess a home you can't jack it up and put it on a trailer and tow it away typically and there are different rules that apply but right now what we're seeing is not only the backlog in the court system from things log jam during covet and also the new filings that have started but you add to that process the fact that we can't do auctions in the courtrooms like we used to do and there has to be safety protocols in place post covert which means and there are also safety protocols in the courtroom so in brooklyn for example on a typical day in kings county during in the foreclosure parts you would see hundreds if not thousands of people jammed into the building waiting for something to happen that's not that's that's not the case anymore so the existing log jam is logjam further and then add on to that all of the files that have been backlogged for two years and the lack of activity it's anybody's guess what's going to happen so what you're saying lance is that we typically go through a year plus with upstate new york and you're telling me you're able to do it in six months it depends on each case stands out but but we've had we've had enough cases in the six-month range that i could tell you that it's possible because i know it's possible because it's happened that can can it happen again if it's happened once it can happen again it's happening the question is is it more expensive than to do this i mean it's a short time frame it's great is it double the price because it's it's not double the price the legal fees are are more than the fannie mae rates the the the reason that we're able to do this our law firm is able to do this because we identify this sounds politically incorrect and i'm going to apologize to anybody everybody ahead of time we identify as a boutique law firm uh meaning that we we we we're not one size fits all for everybody we're not a fannie mae factory uh or a freddie mac foreclosure mill we don't have that kind of volume in federal court the rules require that the attorney who signs the complaint is the attorney on the case and that's it so we can't send appearance counsel into federal court like we can in state court so that of course raises raises the fees and uh there are a couple of other fees which are a wee bit higher so if you spend another two or three thousand in legal fees on a foreclosure but you're in and out of court in six months rather than six years i would say you're ahead of the game yeah and it also allows you to bid on the notes you can bid um on the note sales much much more competitively than the buyers who are expecting to go into state court they're bidding based upon a three four five year time frame and you're bidding on based upon a six to 12 month time frame wow there you have it you know everyone understand the fact you get your money faster you're not paying the property tax bill for another month or so right and the fourth price insurance yeah and close violations server surveys right all those things add up that that two grand is probably a net much higher right so i don't give advice i don't take so i had a pool of loans that i bought recently one we were able to get into federal court uh i i my name wasn't on it so i didn't have a problem with that so this gives me the opportunity to tell you about what you need to do to get into federal court first the case has to involve money over 75 000 that's easy that's virtually everything in new york except for possibly some small second mortgages will be over 75 000.

number one number two you have to have what's called diversity diversity means that the plaintiff is a different citizen than the defendants and that's where it gets tricky uh we have i have two three of our very very skilled associates on with us in the background and they can tell you when they get a file and we do a diversity check which means we we do it we have to check the llc who owns the llc if the llc is owned by other llc's who owns the those llc's so the ownership it's almost like a 23andme or an ancestry.com family tree we we have to do the entire family tree for the entity that owns the loan for small private investors it's very easy if if you are buying a loan and you live in pennsylvania you you don't vote in new york you don't have an address in new york you have no contact with new york except to comment occasionally and see a broadway show and you set up a pennsylvania llc that removes one of the big obstacles in the diversity check we would just have to make sure that none of the defendants who are named in the foreclosure have a pennsylvania address that's our work are the bulk of our work the real heavy lifting is done the first few minutes we get the file because we have to check the diversity but when there's a for example with the banks that own properties buy a trust what was i'm holding up my hand we'll see trust agreements that are this thing they have to be reviewed because this we found the heart found out the hard way there's sometimes something buried deep inside the trust agreement that will kill the diversity that we're looking for so what we're saying is just to recap is that the the balanced legal balance alone has to be above 75 75 000 right right and that no party from the defense side llc or person husband wife anyone on defense side can't have a residency the property could be in new york but they have a brethren's empa you cannot file in court with them in federal court because the fact that if you live in pa or the companies in fba then you can't but if you're in florida all's good that's that's generally the case we'd have to examine it on a case-by-case basis because the florida for example there are an untold number of people who have florida residences who still keep their new york residents so even far even though florida may be their 186th day a year residents for tax purposes the other 184 days are in new york and that may create a problem so we have to examine each case on a case-by-case basis it's in in state court all you need to go into state court is a mortgage that was filed against the property located in new york bingo now you can use the state courts but federal court is a little bit more restricted because of of the rules and and the u.s constitution and the way federal courts are set up so generally speaking what you said was correct okay so i got two questions so first one is foreigners companies do this the answer is it depends upon the citizenship and we would have to review that on a case-by-case basis we we don't have too many foreigners uh with all due respect to our friends from the great white north we don't have too many coming in here to buy loans and foreclose so but if you find yourself buying considering buying a loan and and want to do this in federal court i would suggest contact us first and we can help you establish the parameters for the purchase but just let me give you a caveat before i forget sure if a case is already pending in state court you can't stop it and hop over to federal court but if you're starting a case anew you can access the federal court if you meet all the timelines and those guidelines rather i'm sorry i interrupted that that's okay so kind of a follow-up question so um i just opened this fund and the fund is a limited partnership it was created the limited partnership is delaware the limited partners are are from all over the place so if if there's a limited partner within that partnership with new york residency does that exclude us not if you if it's a new or if any of the owners of the again think of it as a family tree you're looking for second third and fourth cousins yeah if any of those second third and fourth fifth and sixth cousins twice removed three times removed if anybody is considered a new york citizen then you're going to be uh you're not going to be able to get into federal court we have to do the family tree we had a very large large large wall street hedge fund find out that the hard way they set up this was there was a one new york citizen seven generations removed from the llc that owned the note and that was enough to get us thrown out wow yeah so if the the answer is uh you have this these are the things that we have to examine because we have to make a certification as the attorneys when we file the papers that the case is that we've met the diversity test and you don't want to run a follow that because if you if you blunder that and you come back into court another time with a qualifying llc you don't you don't want to you don't want to have a black eye in federal court it doesn't do you well a lot with that said though what are the typical you know processes that are quicker is it the fact that the defendant can't get an attorney who knows it is it the fact that the judge is very strict on the timelines uh besides not being able to take the canada what are some of the things that make it faster well first they're in new york for residential mortgages there's typically a mandatory mediation process or as i like to call it let's string this out for another year and and especially with what's going on now in the busy courts it's going to be the the better part of the year just to go through the mediation process so you're you're already a year behind then then you start the actual foreclosure process there are emotions all sorts of ways to delay and the judges frankly are overwhelmed the clerks are overwhelmed you take the mediation process out of the out of the uh dynamic and you've already shaved a year in current in the current world you've shaped the better part of a year off of off of the timelines you also take away the nonsense motions and then and the post judgment order to show cause or two or three or four or five and you've eliminated that it's also very easy to file an appeal in state court it's very very easy it's not quite as easy to file that same appeal in federal court or to process the appeal process uh properly it's it's so the we've seen in state court where we win the case we get our judgment and the borrower walks across the street to state appeals court there's a pro se part in there the clerk helps them fill out the form one page you waive the fee because they're poor and that's it now right now we're back to the beginning the case is stopped pending the appeal it's more difficult to do that in federal court but the most significant factor is that in federal court as opposed to most state court judges the judges in federal court do control the timelines and they monitor it brutally carefully uh it's with with with with great precision and it's it's a it's a different process uh the and then when we get to the sales it's also a little bit more dignified too so so could you i mean i know i'm i know you're in new york is this something that could be done in texas and florida are the rules different or well if the answer is the the first question would be is it worthwhile to do this in another state if you're in a non-judicial state there's no sense in going into court in the first place if you're in a judicial state then it depends upon the timelines because some state some judicial states get you in and out in under a year so federal court isn't going to make sense but in the notoriously slow states for example new jersey new york i think massachusetts is also a little bit a little bit lumbering if you can access the federal courts then that's something to consider and i would urge you to check with local council who handles foreclosures in both state and federal court in new york most of the firms uh that handle foreclosures don't handle federal court simply because this the staffing issue and they can't use appearance counsel and also that their clients won't qualify for federal court either the banks or the the uh the fannie freddie agencies like that aren't going to qualify so it's of necessity you need to check with the firm and find out who does the largest volume in that state the people who who are there in that federal court every day or who are a brand name and a known entity to the judges and the clerks makes a difference i understand so if you've got um you mentioned like the the judge keeps a very rigid timeline on that i just i'm i'm gonna infer that then you can't just go with any attorney because because if they're already overworked and overloaded with whatever else they're doing in the state courts it'd be very easy to miss one of these deadlines it's not only easy to miss it you have to know who you're in front of and each judge has his or her own peccadillos and and each judge has his or her own rules and federal court isn't the place to to learn how to practice law and learn how to practice foreclosure law especially and if you're a good state court attorney that's that's where you belong in my opinion because you practice what you do best practice it where you do best we don't go into like the patent and trademark court we're not patent and trademark attorneys we're not admiralty attorneys so if your boat gets hit by by somebody else's vote please don't call me we can't help you because that's not the area of law that we practice and the same it should be no different you don't you don't call your obstetrician when you break your leg you call an orthopedist and they're the same way that doctors limit their practice or specialize in certain areas so so too we have a team i've got three people on this call who do nothing but federal court and it's it makes a difference in the outcome that's fascinating so i've i've heard about this years ago and it just caused kind of like this fabled unicorn federal court idea um are people not doing it just because it's unknown or or they are not qualified well here's here's one answer we got from a hedge fund uh the they were afraid of bad publicity for pursuing the foreclosures too quickly my response to that was because you foreclose so slowly you get good publicity and the answer obviously is no and by the way they ended up using us they sent a portion it was something that hadn't occurred to in-house counsel and i remember the discussion like....