LAW FIRMS RE-ASSESS RELATIONSHIP WITH SECURITIZING BANKS

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

I am receiving confidential reports that lawyers who work for firms representing securitizing banks consider themselves working for “the dark side.” From the junior lawyers on up attorneys are reconsidering their representation of would-be foreclosers or even defending them against quiet title and borrowers’ damage actions. They are concerned about their reputation, possible court sanctions, possible disciplinary actions from the Bar Association that gave them their license to practice and even criminal charges.

From what I have heard it would be no exaggeration to say that virtually none of the current lawyers representing these banks trusts their client to tell them the truth. More than a few of the law firms are angry at being used as pawns — or as one person said it “pimps for fiction” — which reveals a growing sentiment that is similar to developments amongst lawyers about representing organized crime figures in either civil or criminal actions.

Junior lawyers, briefed by other lawyers in the firms they work for, were walking into court believing that they were on the “right” side and that these defenses the borrowers were raising were just an annoyance. To say they lack that confidence now is an understatement. Many of them are actively looking or considering employment on the other side — for the borrowers — or in fields completely distinct and separate from the mortgage mess.

It’s a tough decision for either a junior lawyer or senior partner to make. The money they have been making collectively is in the billions of dollars, perhaps over $10 billion. Salaries and bonuses in such firms were climbing. It is hard to walk away from that kind of money. But faced with losing their licenses, having themselves named in an order of sanctions, and facing civil and even criminal penalties, they are between a rock and a hard place. Quitting these firms or discharging the client, has untold consequences for the firm and the client. With commercial activity at a very low point, it isn’t like they can switch into something just as profitable. If they walk, the financial consequences on them could be dire.

Posted in bubble, Corruption, Eviction, securities fraud |