How a BigLaw Refugee Spurred a Foreclosure Uproar
A small bankruptcy law firm housed in a Florida strip mall next to a dentist helped uncover foreclosure paperwork problems that led GMAC to suspend foreclosure sales and spurred a nationwide uproar over “robo-signers.”
The Ice Law Firm in Royal Palm Beach was founded in 2008 by former BigLaw refugee Thomas Ice and his wife, Ariane, a paralegal, the Wall Street Journal (sub. req.) reports. The newspaper recounts how he and two other lawyers in Maine and Florida took depositions of employees at GMAC Mortgage, a unit of Ally Financial Inc., that revealed “robosigners” had routinely signed foreclosure documents without reviewing the paperwork.
Ice had worked as a lawyer at Carlton Fields and a partner at Holland & Knight, according to his law firm website. The Wall Street Journal says he helped defend against plane-crash and SUV-rollover suits. Ice started looking for a way to contest foreclosures as part of his consumer bankruptcy practice at his new law firm and decided depositions may uncover irregularities.
A Washington Post story says Ice Legal and two “amateur sleuths”—a nurse facing foreclosure and a blogger trying to assist his girlfriend in foreclosure—are “largely responsible for setting off the growing firestorm over foreclosures.” The nurse and blogger met at the Ice law offices in November where they compared notes and plotted strategy.
The Ices and seven other lawyers at the firm began deposing so-called “robo-signers” at major mortgage companies and began posting the transcripts online, the Post says. Other homeowners then began using the documents, including Maine pro bono lawyer Thomas Cox, according to the Post and the Wall Street Journal. Cox had formerly represented lenders and had regretted his longtime role in foreclosing on homes.
The Wall Street Journal says the Ices weren’t the first lawyer to uncover the robo-signers, however. James Kowalski of Jacksonville, Fla., discovered the problem in 2006, and his deposition of a document processor at GMAC Mortgage helped him keep his clients in their home six years after they last made a mortgage payment.
“It was a first step in the growth of a legal sub-specialty called foreclosure defense that has sown confusion and turmoil in the housing market,” the Wall Street Journal says.