Lawyers were getting $175 to conduct routine foreclosure auction sales. Until Judge Bruce Levin came to town.
Since taking over the housing sessions in September at New Haven’s State Superior Court, where he handles a flood of foreclosure cases, Judge Levin has dropped the hourly rate to $105 for “committees” — the term for lawyers appointed by the court to conduct the auctions.
“And frankly,” Levin said during a Thursday morning recess, “it could go lower than that. After all, the committee’s work is just not that challenging.”
It is lucrative, one of several professions that have prospered amid the pain of the current foreclosure crisis.
The “committee”‘s duties include ordering the foreclosure sign, placing legal notices, and contacting the parties to the foreclosure and any affected tenants. The major task is conducting the auction at the site of the sale, on the assigned day, and filing papers afterward.
“I’ve looked at two aspects of this process,” said Levin. “First, this is not the highest- level legal work. And, second, there are hundreds and hundreds of people on the list who want to do this work.”
In other words, a buyer’s market. And Judge Levin is the buyer. “Look,” he said, “I’m hiring people to do work and ultimately someone else is paying, so I need to look at getting the work done for the least cost is the way I see it.”
Levin said he sees himself as a fiduciary, simply trying to get the best deal. If there are lawyers who will do it for $105 and can do the job adequately, why pay more? Or, as he put it, “If I can get my car fixed adequately for a lower rate, why not do it?”
Levin is the only housing judge in New Haven. On Mondays he presides over foreclosures. Tuesdays and Thursdays are dedicated to evictions. Wednesday he runs the housing court in Waterbury. Prior to his current assignment, Levin presided over civil matters in Derby.
During a foreclosure proceeding last month Levin simply said, as if incidentally, between the dozens of cases coming before him, “Oh, and I’m announcing that I’ve decided to lower attorneys’ fees.”
Hamden lawyer Geoffrey Einhorn, who was in court at the time, looked up from his papers and was heard to exclaim, “Whoa!”
Levin said that word is trickling down through the profession. Those who are interested will stay on the list, he indicated, and others may drop out. “There are some people on that list who are real scholars, fine legal minds. Maybe they won’t want to do this kind of work for $105.”
That would be fine with him. Typically, an attorney’s name comes up on the list anywhere from two to four times a year. That may increase if the list is thinned. “I mean there are hundreds and hundreds of names,” Levin said.
Levin was at pains to point out that when he reviews each case, he goes through the hours billed, the price paid for the sign and the advertisement. “In general, I think the number of hours billed is all right. I have no problem there. It’s just the rate.”
The “committee”‘s fees are ultimately added to the debt in a foreclosure. If the bank successfully forecloses and buys a property, it pays the court the committee fees. These usually run, anywhere from $1,400 to $1,800. If a foreclosure is extended and delayed several times, that number can triple.
“Ultimately, after the plaintiff or bank pays the committee, those fees are going to be passed along to the poor foreclosed homeowner,” Levin pointed out.
That takes the form of what’s called a deficiency judgment. Say a house is sold for $400,000 to the bank. Say Joe the Carpenter’s debt to the bank is $500,000. After the foreclosure’s complete, the bank’s attorney may file a deficiency judgment seeking the $100,000 balance This doesn’t always happen, because if Joe’s been foreclosed, then he’s likely unable to pay the deficiency.
“Still,” said Levin, “those are filed, many of them, and they just sit there, but they are open motions. Two, five years from now, things can change, and if they’re acted on, those committee fees are going to be added to the debt. Those deficiency motions are ticking time bombs.”
Is there a threshold below which Judge Levin won’t go? “I suppose if a committee comes into the court and he or she has screwed up, well, then, I’ll rethink things. But that hasn’t happened yet.”
Officials at the Judicial Branch in Hartford said there are no statewide guidelines in these matters, and that it is up to each individual housing judge to make the determination.
Previous Independent coverage of New Haven’s foreclosure crisis:
‚Ä¢ Tax Break Saves Woman’s House
‚Ä¢ Bank Replaces “Gunshot Alley” Landlord
‚Ä¢ Foreclosure Bill OK’d
• Singh Seeks Home For A Song
‚Ä¢ Foreclosure’s Neighbor Worries More About Speeding
‚Ä¢ Networking Replaces Foreclosure at Christy’s
‚Ä¢ Foreclosure Bargain — & Renewal — Jeopardized
• Bank Outbids Akbar; Family May Keep Home
‚Ä¢ “So Don’t Worry About Pablo”
• Bankruptcy Postpones Foreclosure
• Next-Door Foreclosures, 53 Years Apart
• They Met On Foreclosure Way
• Little Garage Draws Big Bids
• A 2nd Chance on Lewis Street
‚Ä¢ Foreclosure Attracts New Breed of “Specialist”
‚Ä¢ In Foreclosures, Judge’s Hands Tied
• Home Saved From Foreclosure. Cycle, Too
• A House For Precious?
• Deutsche Bank Grabs Dixwell Condo
• Reluctant Bidder Snags F. Haven Bargain
‚Ä¢ Well, There’s Always Powerball
• Neighbors Retrieve Home From Bank
• Somebody Has Plans For Bassett Street
• Foreclosed, the Khennavongs Leave the Santanas
• Foreclosure Steal May Be Too Good
• 2nd Foreclosure in 3 Months Dims Bright St.
‚Ä¢ After Foreclosure, W’ville Owner Still Hopes To Sell
‚Ä¢ He’s Not Buying, Yet
• Quiet Foreclosure on Porter Street
• 3 Minutes Too Late
• Historic Gambardella Property Foreclosed
•2 Homes Lost, 1 Gained
‚Ä¢ “Everybody’s Got To Eat”
• More Foreclosures, More Signs
‚Ä¢ Foreclosure Sale Benefits Archie Moore’s
• Rescue Squad Swings Into Action
• A Bidder Shows Up
‚Ä¢ Bank Beats Tanya’s Bid
• Westville Auction Draws A Crowd
• DeStefano: Foreclosure Plan Ready
• Can They Help?
‚Ä¢ “We Should Over-Regulate These Bastards”
• Rosa Hears of Rescues
• WPCA Grilled on Foreclosures
‚Ä¢ WPCA’s Targets Struggle To Dig Out
• Sue The Subprimers?
• WPCA Hearing Delayed
‚Ä¢ Megna’s “Blood Boils” at WPCA Tactics
• Goldfield Wants WPCA Answers
• 2 Days, 8 Foreclosure Suits
• WPCA Goes On Foreclosure Binge
• A Guru Weighs In
• WPCA Targets Church
• Subprime Mess Targeted
‚Ä¢ Renters Caught In Foreclosure King’s Fall
‚Ä¢ She’s One Of 1,150 In The Foreclosure Mill
‚Ä¢ Foreclosures Threaten Perrotti’s Empire
‚Ä¢“I’m Not Going To Lay Down And Let Them Take My House”
‚Ä¢ Struggling Couple Sues Over “Scam”
To learn about the ROOF Project, a community-wide effort to help New Haveners navigate the foreclosure crisis, click here.
The following links are to various materials and brochures designed to help homeowners avoid foreclosure.
How to prepare a complaint to the Department of Banking; Department of Banking Online Assistance Form; Connecticut Department of Banking, Avoiding Foreclosure; FDIC Consumer News; Statewide Legal Services of Connecticut, Inc; Connecticut Bar Association Lawyer Referral Service.
For lawyer referral services in New Haven, call 562-5750 or visit this website. For the Department of Social Services (DSS) Eviction Foreclosure Prevention Program (EFPP), call 211 to see which community-based organization in the state serves your town.
Click here for information on foreclosure prevention efforts from Empower New Haven.