Defunct Law Firm Sues Wells Fargo Over Foreclosure Work
A New Jersey law firm that helped Wells Fargo Bank N.A. foreclose on thousands of homeowners has sued the lender, saying the bank’s delayed efforts to fix its robo-signing problems led the law firm to collapse.
Lawyers for the Zucker, Goldberg & Ackerman law firm, which laid off most of its 335 workers last year, are accusing Wells Fargo of taking several years to comply with a 2010 New Jersey Supreme Court order that called for lenders to show that they were properly submitting mortgage details before foreclosing on a property.
The order, which required banks to submit their internal foreclosure policies, paralyzed foreclosures throughout the state. The average time for the foreclosure process—from filing the lawsuit to a sheriff’s sale—grew from about 200 days to about 1,000 days, according to documents filed in U.S. Bankruptcy Court in Newark.
Wells Fargo’s delay in responding to the court order caused financial problems for Zucker, Goldberg & Ackerman, according to the lawsuit. Under its agreements with mortgage lenders, the law firm would advance most of the foreclosure-related expenses and be reimbursed later, usually after a judgment or sale, court papers said.