The Florida Bar

June 3, 1966

It is proper for an attorney to agree with a client engaged in the mortgage loan business to conduct all closings for the client at a fixed monthly compensation.

Canons: 9, 12

Chairman Kittleson stated the opinion of the committee:

A member of The Florida Bar has requested the Committee's advice on circumstances which we understand to be as follows. One of the lawyer's regular clients is a company whose business is making mortgage loans, as a direct lender and not as a broker. Presently, legal services to the lender include the inspection and processing of the loan documents, although the actual closings are handled by various other lawyers. The client now desires that the lawyer handle all closings for a fixed monthly compensation, and the amount will not be based upon the number of closings. The closings will be held in the company's office. The lawyer will not receive directly or indirectly any portion of the out-of-pocket closing costs or disbursements charged to the borrower. Although he may arrange for appropriate mortgagee title insurance, this will result in no rebate of any kind to him or to his client from amounts charged to the borrower for title insurance. The Committee's advice is sought on the ethical propriety of participation in this manner.

The Committee sees no ethical problem in the circumstances set forth above. Canon 9 provides that an ethical lawyer must avoid everything that may tend to mislead a party not represented by counsel, and he should not undertake to advise him as to the law. A prudent closing attorney will make it clear that he does not represent the borrower but only the lender.

[Revised: 08-24-2011]