PLI: You think deal lawyers need to "get their hands dirty" when it comes to mortgage loan foreclosures. Can you explain what you mean?

PETER A. SARASEK: When a client asks the real estate transactional attorney to help with the foreclosure of a mortgage loan, the tendency of many deal lawyers is to bring in the litigators and let them take over, with the deal lawyer barely involved in the effort thereafter. This can be a major mistake on the part of the transactional lawyer for a number of reasons. First, the deal lawyer knows the client best, and has gained the trust of the client and knows its concerns. The client's business people are often afraid of litigation, especially mortgage foreclosures, often because they do not understand how the foreclosure process works and what is involved in it. Loan officers, like most people, have also heard or experienced in the past some of the horrors of litigation, including the delays, costs, and sometimes adverse rulings from a third party judge in black robes whom they've never known before. At the same time, the lender's staff is under constant pressure to get this troubled loan off its books as quickly as possible. Clients often need a known and trusted advisor to hold their hand through the litigation process, and the deal lawyer who made the loan is probably the best person to serve in that role.

Second, litigators often don't understand the ins and outs of real estate lending, they don't understand how mortgage loans are structured, and often they don't know all the relevant provisions of the applicable mortgage instruments or their significance. The lawyer who drafted those documents does (or should). That deal lawyer can be a resource for the litigators as they pursue through the courts the foreclosure of the mortgage loan.

Third, there are numerous issues involved in every judicial mortgage foreclosure proceeding that are not litigation issues, but are more often substantive issues of real estate law. The real estate attorney is the person best able to help address those issues, and not the non-real estate litigators who may know the rules of civil procedure and courtroom demeanor quite well, but who don't always know or appreciate some of the many nuances of real estate law.