Admittedly, homeowners in foreclosure face a Hobson’s choice. Do they choose fight or flight?
In the case of a number of Florida homeowners, they are opting for fight. At the same time, they are making what some would perceive as a pact with the devil: Lawyers who literally have them mortgage their future.
A front -page article in Sunday’s New York Times documents how lawyers who are hired by desperate homeowners lacking cash agree to represent them only if their compensation is guaranteed by a second mortgage.
One expert in contingency fees allowed that the practice made him queasy. It makes me queasy, too, close to nauseated.
The scheme sounds like exploitation.
At the same time, either the hard-pressed homeowners cave in to their lenders or to their attorneys, who hardly can be expected to earn their livelihoods on a hope and an empty promise. Said Peter Ticktin of the Ticktin Law Group in Deerfield Beach, Fla., which has some 3,000 foreclosure clients:
It’s a new model, a new paradigm.
Yet Ticktin, whose innovative plan is being copied by other firms, declared that the second mortgage was beside the point. He declared:
We would never enforce the mortgage and foreclose. We’re not in the end of the game. We’re not money lenders. We’re charging a small amount of interest just to make it legal.
The interest rate of 4 percent indeed is small, but what’s the point of the second mortgage if not to preserve the opportunity to foreclose?
No one is quoted in the article with having a better way for lawyers to help homeowners and still receive justified compensation for their work. I don’t have a better idea either.
But I don’t like what those legal eagles are doing. I’ve long believed that if something doesn’t feel right, it can’t be right. This approach just doesn’t feel right.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022