Consumer lawyers have been traveling to a remote 160-acre farm in the mountains of western North Carolina since 2006 to network, drink Scotch and prepare for legal combat in foreclosure and bankruptcy cases.
They arrive in groups of a dozen or so for a four-day boot camp where they learn how to protect their clients’ assets by exploiting the mistakes of creditors. Attendees these days are especially keen on strategies to fend off mortgage lenders and servicers seeking to seize their clients’ homes.
Their instructor is O. Max Gardner III, a 65-year-old bankruptcy litigator and grandson of a North Carolina governor, who was using flaws in mortgage servicing to stave off lenders years before cases involving shoddy paperwork spurred this month’s investigation of the industry by the attorneys general of all 50 states. He charges $7,775 for the program, which covers 3,000 pages of materials, lodging, food and unlimited wine, beer and single-malt Scotch.
“My time with Max changed the trajectory of my legal career,” said Nick Wooten, 40, an Alabama attorney who changed his focus from personal injury to bankruptcy and foreclosure after attending the boot camp in 2007. “Knowledge is power, and one thing he is able to give in his boot camp is a tremendous amount of knowledge about how the other side operates.”
Participants, who are admitted only after a background check confirms that they don’t work for creditors, gain access to a private e-mail distribution list where they share legal strategies, documents and advice. Linda Tir elli, a consumer-bankruptcy attorney in New York and Connecticut and one of the 599 people who have gone through the program, said she feels like she’s now part of a big law firm.
“It’s a fraternity,” Tirelli said. “We don’t see each other as competition. We want more attorneys to join because the more we have the better.”
While Gardner and some of his graduates have been winning settlements for years, it wasn’t until Ally Financial’s GMAC Mortgage unit said last month that it was halting some evictions that foreclosure documentation and the use of robo-signers became a national issue that threatened to stall sales of repossessed homes.
“We had a steep hill to climb to convince the judges that the largest financial institutions in America were engaged in this kind of conduct,” Gardner said in an interview during a break in this month’s session.
Students travel along a gravel road to reach Gardner’s place in the South Mountains about 60 miles northwest of Charlotte, N.C. They sleep in cabins and swap stories over meals prepared by Gardner’s wife, Victoria, in the family’s three-story log cabin-style house on a hill overlooking a spring-fed pond.
During days that run 10 to 12 hours, Gardner lectures on topics including “Max’s Favorite Discovery Devices,” “Strategy to Trap Opponents in their Own Mistakes,” “Mortgage Servicing Litigation: How the Legal Network for Creditors is Organized” and “The Alphabet Problem, A to D Unlawful Transfer of Mortgages and Notes.”
The heart of Gardner’s strategy is to uncover omissions and errors in mortgage securitizations, the process in which thousands of loans are bundled into bonds and sold to investors. Securitizations are plagued by lost promissory notes and missing or inconsistent tracking of changes in loan ownership, Gardner said in the interview. Servicers processing default actions papered over the errors with improperly prepared affidavits and after-the-fact assignments of mortgages, he said.
The materials supplied to students on thumb-size data-storage units include “Max Gardner’s Top Road Signs of Bogus Mortgage Documents,” a list that has been updated and expanded since it first appeared in the boot-camp materials in January 2006, he said. The last of the 66 tips for spotting irregularities is if the document is signed by any of 295 people, whom he lists by name.
“What the grand scheme is here is not what I’m teaching because honestly I don’t know,” Gardner said. “What I want them to understand is what happened and how it happened and how they can identify the improper unlawful documents and what they can do with them.”
