FLORIDA BAR ETHICS OPINION
November 10, 1969
Advisory ethics opinions are not binding.
There is no ethical impropriety in a mortgage company requiring those borrowing or receiving
funds from it to bear or contribute to the payment of the fee of the attorney employed by it or to
other expenses; however, if such expenses are to be charged to a party other than the borrower,
such parties should be at liberty to decline to bear such expense and to insist upon some other
agreement with the buyer.
65-58; ABA Informal 544
Chairman MacDonald stated the opinion of the committee:
A member of The Florida Bar advises that he represents a mortgage company
engaged in the business of financing the sales of real property secured by
federally insured mortgages. In the course of the closing of such sales, the
inquirer prepares closing statements for his client, and incidentally for the
purchaser and seller. On the seller’s closing statement there is reflected an item
styled “attorney’s fee preparing instruments.” Ordinarily, the amount so shown as
a charge against the seller is $25, the amount which the Federal Housing
Administration permits the client to charge the parties to the transaction and apply
toward the client’s attorney fees. Ordinarily, the expense to the mortgage
company by way of attorney fees is substantially greater but the amount reflected
on the statement is simply credited toward the fee.
We are asked whether a solicitation problem exists, i.e., whether the client or the inquirer
has in effect solicited the parties to the real property transaction to pay a part of the fee, or
whether there thus exists therein a conflict of interest.
Although an attorney in such a situation has certain responsibilities toward those who
may indirectly pay or contribute toward his attorney’s fee (see our Opinion 65-58), there is
certainly no ethical impropriety in the mortgage company requiring those borrowing or receiving
funds from it to bear or contribute to the payment of attorney’s fee or other expenses (see ABA
Informal Opinion No. 544). Accordingly, so long as the attorney makes it clear to the parties that
he is in fact the attorney for the lending institution, there is no difficulty.
Presumably any problem existent in the instant situation arose because it differs from the
typical situation wherein the borrower as buyer is ordinarily the person required to pay the
lender’s expenses. In situations in which the seller has no direct interest in the details of the loan
to the buyer, it may not come to his attention prior to the closing that he in fact is being charged a
closing expense representing a contribution toward the expenses of the lender in the form of
attorney’s fees. Doubtless a pragmatic solution to this problem would be to avoid it in the first
instance by preliminary communication and explanation. Obviously, from an ethical standpoint,
the seller should be at liberty to decline to bear this expense and to insist upon some other
agreement with the buyer.