Foreclosure Cases Making Big Money for Small Firms
Okay, so they're not in the Am Law 100 or even the Am Law Second Hundred, but two relatively small Hartford firms, Hunt, Leibert and Jacobson and Reiner, Reiner and Bendett are reaping millions from their busy foreclosure practices, reports the Hartford Courant. Of the record 18,000 foreclosure suits filed in Connecticut last year, 8,000 came from Hunt, Leibert and 4,000 from Reiner, Reiner.
The firms dominate the foreclosure courts for two reasons. First, they are the only Connecticut law firms approved as "designated counsel" by the main government-sponsored mortgage lenders and guarantors, known as Freddie Mac and Fannie Mae. Large lenders with mortgages backed by those agencies have a financial incentive to use designated law firms when foreclosing on loans, and some smaller lenders are required to use the designated firms. Second, Hunt Leibert and Reiner, Reiner process foreclosure lawsuits more quickly than their competitors, requiring an average of three to four months to close a case in comparison to the median seven-and-a-half months at other firms.
The speed with which the firms handle foreclosures has drawn criticism that they are overly aggressive, unnecessarily taking homes and rushing through foreclosures for bank clients concerned with speed above all else. The firms are also the subject of homeowner complaints filed with the state's attorneys' office, alleging mistreatment in the foreclosure process.
And it's not just lawyers getting rich off of foreclosure. This related piece from the Courant reports that the self-employed state marshals who serve foreclosure papers are grossing a half-million dollars a year. One process server, John Fiorella grossed $2 million and even with the $1.2 million in expenses associated with clerical staff, mileage and copying costs, he nets $878,000 -- as much as some Am Law 100 partners.
Posted by Carolyn Elefant on June 23, 2008 at 03:25 PM | Permalink
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