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News
June 12, 2013

Foreclosure Settlement in Doubt

“The plaintiffs bar loves state attorneys general, who often hire the lawyers for a contingency fee and get campaign cash in return,” writes the Wall Street Journal.  One such contingency fee contract could derail a mortgage-processing settlement if lawyers hired by the Nevada attorney general get their way.

According to the Journal, 49 states and the District of Columbia have agreed to settlements with Lender Processing Services, with Nevada as the only holdout.  Nevada is also the only state to hire outside lawyers on a contingency fee basis.  The nationwide settlement, which allows for renegotiations if any state gets a different deal, could be scuttled if the lawyers hired by the AG continue to insist on a bigger payday.

The Journal concludes:

“Contingency-fee contracts with state AGs are one of the dirtier practices in modern politics. The conflict of interest is glaring, with the pecuniary interest of the private lawyers interfering with the AG’s ethical obligation to serve the public interest. But at least the damage is usually limited to a single state. In this case the harm doesn’t stay in Vegas.”

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