Being a foreclosure lawyer may be the best gig in business
I once heard the owner of an ambulance service comment, “The bad breaks are good breaks, for me, anyway.”
So it is for lawyers lucky enough to run a foreclosure mill, or have a mini-mill as part of their general practice. For an attorney, having a pipeline to institutional foreclosures is like dying and going to heaven. (Yes, some attorneys do actually go to heaven. Not all achieve excessive wealth and then get a one-way ticket to somewhere else.)
Big financial institutions can’t be bothered with the nuts and bolts of foreclosure, but do realize that the process has to be handled somewhat professionally, else some nitpicking judge is going to get huffy about issues such as “robo-signing,” which has resulted in billions in settlements for the nation’s big banks.
Like any assembly-line process, you get pretty good at it if you do it over and over, day after day. And, for lawyers, it has the added advantage of simplicity: no researching case law, no long hours preparing for trial. It’s an eight-hour-a-day job, and, often not even that. The grunt work, and it’s almost all grunt work, can be handled by paralegals, which means a lot more time on the golf course, beach or ski mountain for the firm’s partners.
And the golden kicker is that the money keeps getting better. Once your firm has effectively opened the foreclosure faucet, you’ll find that the temptation to charge a lot of money for a little work is almost irresistible. Right now, the Colorado Attorney General is going after the state’s second largest foreclosure factory for overcharging for such simple services as posting foreclosure notices on properties.
The reason that law firms can get away with this is because the customer, the servicer of the loan (which often is not even the owner of the loan), doesn’t care. There’s no price competition, and there’s virtually no competition from other lawyers. The legal costs are paid by somebody else: the homeowner if the property is redeemed out of foreclosure; the owner of the loan if it isn’t. That owner is often Fannie Mae or Freddie Mac, which are now owned by, guess who? That’s right, the American taxpayer.
Big banks may use their own law firm for foreclosures, and these firms quickly structure a foreclosure department patterned on that of the firms that specialize exclusively in multiple foreclosure services. In either case, the foreclosure driver is the go-to entity, and it’s virtually impossible for a newbie to crack the monopoly. There are few better gigs in the practice of law, or, indeed, in all of business.
I once heard a borrower opine that he couldn’t get any local lawyer to represent him in fighting a big bank foreclosure, citing the legal community’s reluctance to go against a mega-bank because of potential foreclosure business. That was probably not the case. Rather, it’s just not cost effective for a general practitioner in the law business to take on such a client, unless that client has very deep pockets, and is inclined to turn them inside out.
My advice to babies seeking to pick their parents: If you’re not named Prince George, select a foreclosure lawyer for a mom or dad.
Pat Dalrymple is a valley native. He’s been in the mortgage and banking business since 1961. He’ll be happy to answer your questions or hear your comments. His e-mail is firstname.lastname@example.org.
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