Posted Nov 08, 2010 02:54 pm CST
Some Florida foreclosure lawyers are charging contingency fees and securing them with second mortgages on the homes they helped save from bank repossession.
Among the law firms taking this tack is the Ticktin Law Group in Deerfield Beach, Fla., the New York Times reports. “It’s a new model, a new paradigm,” name partner Peter Ticktin told the newspaper. The firm has so far acquired mortgages on the homes of five clients.
Law firms secure their fee with a second mortgage only if they are successful in reducing the homeowner’s mortgage debt and getting the foreclosure dismissed. The Ticktin Law Group charges clients 40 percent of the reduction in mortgage amount, minus any fees paid by the losing bank.
The Times describes the Ticktin mortgages this way: “Each will be a contractual obligation with the law firm, labeled as a mortgage and structured like one, too, with the client paying a certain sum every month and using the house as collateral.” The monthly payments reduce the amount owed.
Cardozo law professor Lester Brickman told the Times the contingency approach is a first in consumer litigation. The arrangement “leaves me a little queasy,” he said. “It’s an invitation for the public to say, ‘There go the lawyers again.’ ”
Hat tip to Truth on the Market.