Foreclosure Attorney Practices Coming Under Fire
FORT LAUDERDALE (CBS4) - In foreclosure and frustrated trying to modify his loan, Brett Bernstein decided to take his lender to court.
He hired foreclosure attorney Peter Ticktin in Deerfield Beach and signed a unique agreement.
According to the terms of the agreement, if he won in court and the lender Countrywide agreed to dismiss his $200,000 debt, Bernstein would pay the firm forty percent of what he saved. In this case that would amount to $80,000.
"The whole loan modification process is built for failure," says Bernstein. He doesn't mind the fee saying, "It affords the homeowner the ability to fight the bank without putting the burden on the borrower."
But the idea of what some call "taking a second mortgage" to pay foreclosure fees is raising eyebrows in the legal community.
Ticktin dismisses the criticism saying, "We're proud of what we've done. This is a good answer to a tough problem. How do you incentivize a lawyer to fight hard?"
"I find it a troubling practice," says Jose Gabilondo an associate professor of law at Florida International University.
"Potentially it's an inappropriate relationship that creates the appearance of impropriety.
From a client's point of view, he should ask himself is he just substituting a lawyer creditor for a bank creditor. Is it better or worse?"
Ticktin, who's had his law license suspended twice, is now being investigated by the Florida Bar.
He says the rule of law is on his side. "What we're allowed to do is have a mortgage or lien to secure the fees. I think when they look at it they won't see a problem whatsoever."
Although he's in a position to foreclose on someone who doesn't pay later, Ticktin vows he never will.
At the very least families in foreclosure are buying time to stay in their homes while their cases grind through the courts.
