Legal Ethics

Suit Says Ben-Ezra Law Firm Was In Network Paying Kickbacks for Foreclosure Cases

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Updated: A Florida woman has filed a federal suit against a Fort Lauderdale law firm known for its mortgage foreclosure work on behalf of lenders, contending that Ben-Ezra & Katz was part of a network of firms paying kickbacks to a foreclosure processing company to obtain legal work.

The alleged kickbacks, which the suit says were then charged to struggling homeowners, were part of an illegal fee-splitting arrangement under federal bankruptcy law, according to the complaint, which was filed in Pensacola. It seeks class action status, the Miami Herald reported.

The article doesn’t include any response from the firm. However, Ray Casas, a spokesman for the firm, provided a statement to the ABA Journal: “Ben-Ezra & Katz has always been concerned to practice ethically and correctly. We are studying this suit to learn more about the claims alleged by this bankruptcy debtor.”

A Housing Wire post says the complaint by Susan Marie Harris against Lender Processing Services is the fifth such lawsuit filed in a little over six months and attorney Nick Wooten, who is involved in all of the cases, says he expects to file up to a dozen more by mid-May.

Other law firms named as defendants in earlier cases include Johnson & Freedman; Manley Deas Kochalski; Morris and Associates; and Sirote & Permutt.

The cases are concentrated in federal court in Alabama, Missisippi and Pensacola, Fla.

Related coverage: “Judge Axes Foreclosure, Bans Do-Over, Holds Lawyer in Contempt; Fannie Mae Pulls Files from Firm” “Layoffs of Hundreds Follow Foreclosure Firm’s Loss of Fannie Mae Files” “Fed’l Judge Says Chase Must Post $4M Surety Bond to Get Its Foreclosure Files Back From Law Firm”

Updated at 1:59 p.m. to include comment from firm and Housing Wire post information about similar litigation filed previously.

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