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True Case Stories “Caught in the Crossfire”

What to do when clients are using each other for target practice

It was one of those days that make you wonder why you became an attorney in
the first place. Dan Buchanan, a Riverside attorney, was staring out the window
of his office, as if a solution might materialize out of the thick, dark clouds.
He was listening to his client, George* tell a story Dan had heard many times
before.

“He’s a jerk, that’s all,” said George, bitterly. “Never respected his mom
or me neither. Never come around to help out and now he wants half. I’m the
one who fixed up the place for Maggie*. Put my sweat, blood and money in it.
It just ain’t fair.”

Dan flipped through the case file. George’s wife, Maggie, had died leaving
the house in her name. When they got married they hadn’t bothered to put George’s
name on the title of the house. After Maggie died unexpectedly, George discovered
it would be necessary to probate her estate. Now, Maggie’s grown son by a previous
marriage, Tim*, was entitled to half the estate.

Meanwhile, in the offices of Hartnell, Horspool & Fox, Bryan Hartnell was
listening to his client, Tim (Maggie’s son) take shots at George. “He’s not
my dad, I don’t see why he should get everything,” he complained. “It’s my mom’s
house, I grew up there. A lot of my personal stuff is there. George never liked
me and now he’s just using this to get back at me.”

A high level of distrust between two clients

Over a period of weeks, Buchanan and Hartnell conferred several times, trying
to arrange a “cease fire” between their clients. But the level of distrust and
animosity was high, and there were other problems as well. George worked for
a trucking company, but he had poor credit and no previous mortgage experience.
He would have a hard time qualifying for a loan that would enable him to buy
out Tim’s half of the estate.

Also, the real property, which was actually two houses on one lot in Mentone,
was overbuilt and non-conforming, and the court had overvalued the house compared
to the lender’s appraisal. Both attorneys realized that if the house was sold
to a third party, their clients could only expect to receive about 75% of what
the court said the house was worth. And because the house was in a community
where real estate moved slowly, it might take many months or even years to obtain
that!

“My client needs mortgage financing,” said Buchanan, talking with Hartnell.
Hartnell replied, “We also need someone who can gain the trust of both sides
and help us work this out. What about Rick Harmon at The Suburban Group?” Since
both attorneys had previous experience working with The Suburban Group, they
called Rick.

Rick started working to arrange financing for George while his associate,
Lorrie Bryan worked with both clients to find common ground. Tim said he wouldn’t
sign any agreement until George let him enter the house and get his personal
things. At first, George wouldn’t agree to this. “But Lorrie was really great,”
said Rick. “She was like a mother to them, she softened them up.” Eventually,
George did agree.

The Suburban Group was able to arrange financing for George so that he could
buy out Tim’s share, keep the house and still have payments of about $850 a
month on a 30-year fixed rate loan. Finally, peace reigned and everyone was
happy. Especially the attorneys.

*Not their real names.

Case Assessment and Conclusions

George wanted to keep the house. Tim wanted his share of the money. The key
to resolving this case was finding a way to break the stalemate between two
hostile clients. The attorneys were having difficulty making headway because
their clients were not following their counsel. The mediation of an objective
third party–The Suburban Group–proved to be the answer to a sticky situation.

But client hostility wasn’t the only problem. This was a nonconforming property
that had been overvalued by the court referee, and George had a poor credit
history and weak borrowing position. In spite of all this, The Suburban Group
was able to arrange attractive, affordable financing.

Thanks to their previous relationship with both attorneys — as well as their
ability to “stand in the gap” between two difficult clients — The Suburban
Group was able to help overcome all barriers and resolve the crisis to the satisfaction
of all parties.

Why this Storyletter was Written

Ever since we began focusing our support on probate legal professionals like
yourself and pioneered the use of mortgage financing to close estates, it hasn’t
always been easy to explain to prospective clients all of the benefits our full
scope of services has to offer you.

In the early days, we relied on word of mouth referrals and Bar Association
speeches. Probate attorneys and paralegals learned that we were the only lender
which concentrated all of their efforts on trust and estate financing.

That’s why we developed a full spectrum of loan programs for estate representatives
and other fiduciaries as well as borrowers who prefer to sign personally.

However, while the primary emphasis of our services has never changed, the
number of financial and consulting services has expanded.

Early on, the only choice available for obtaining a loan while still in probate
was for the estate rep. to borrow on the probate realty. Today, nearly two-thirds
of our loans are to borrowers who wish to obtain bank rates in order to buy
out other heirs.

Tip for Today:

Obtain copies of recorded mortgages and other liens on each new estate case.
Then, make contact which each creditor early to determine balances due and keep
payments current. This will help you to avoid delays and surprises by allowing
ample time to discover and correct discrepancies.

We use Old Republic Title Co. to obtain
recorded documents (on a professional courtesy basis). Call Larry Christian
at: 800-388-4853 x6509.