Shuttered Law Firm Could Create Foreclosure Problems

Orange County Clerk Tiffany Moore Russell said two Orange County foreclosure sales were voided after fee transaction checks were returned due to insufficient funds.

ORLANDO, FL – May 24, 2015 – On May 14, a large law firm specializing in foreclosures suddenly shut its doors, laying off about 700 employees nationwide, including ones in its Miami, Orlando and Tampa offices.

The sudden departure of Butler & Hosch will have an impact on some foreclosures, and, according to The Orlando Sentinel, it already has: Law firms are responsible for paying some fees during a foreclosure process, and those fees have not been paid in at least a few cases. As time passes, more fees will probably be missed.

According to The Orlando Business Journal, Butler & Hosch is currently active in 50,000-60,000 foreclosures, though it's unclear how many of those cases are in Florida. The firm has access to 90 percent of U.S. foreclosure cases.

"This is a big deal because it's going to end up clogging up the court even more," Collier County Clerk Dwight Brock said about the shutdown. He claims that 11 foreclosure sales have already been sidetracked in Collier County over the past week because the law firm stopped participating in the process.

Orange County Clerk Tiffany Moore Russell said two Orange County foreclosure sales were voided after fee transaction checks were returned due to insufficient funds.

Butler & Hosch's problems seem to be financial. According to CEO Robert Hosch Jr., the law firm aggressively tried to expand its operations by buying smaller firms, but it expanded too fast. In the end, the company could no longer afford to support itself, and it didn't have enough credit to secure more funding. Employees who lost their jobs were not paid for their last few weeks of work.

Lenders who relied on Butler & Hosch's services must now try to retrieve the case files and move forward with foreclosure cases already in the pipeline.

Source: The Orlando Sentinel (May 18, 2015), The Orlando Business Journal (May 18, 2015)

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