Illinois Supreme Court decision allows non-lawyers to handle real estate transactions
There is a major battle underway between the organized bar and mortgage companies over having the lender's non-lawyer employees handle parts of real estate sales transactions. Here in this case the Illinois Supreme Court hands a big loss to the lawyers, despite numerous amicus briefs:
The parties have identified several issues for our review: (1) whether a mortgage lender that uses nonlawyers to prepare loan documents for the lender's loans engages in the unauthorized practice of law when the lender charges the borrower a fee for preparation of the documents; (2) whether a private right of action to recover money damages exists under the Attorney Act (705 ILCS 205/0.01 et seq. (West 2002)); (3) whether plaintiffs' complaints stated a cause of action under the Consumer Fraud Act; (4) whether a private right of action for money had and received due to fees charged in this case exists and whether the voluntary payment doctrine bars plaintiffs from seeking restitution; and (5) whether federal law preempts plaintiffs' state law claims against defendant national bank and federal savings associations.
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In summary, we hold that where the defendant lenders prepared the subject loan documents, through their employees, they did not engage in the unauthorized practice of law by charging a fee. We also hold that no private right of action exists under the Attorney Act for damages for the unauthorized practice of law. We further hold that plaintiffs' restitution claims in the Jackson and Porter cases are barred by the voluntary payment doctrine. Accordingly, for the reasons stated, we affirm the judgments of the appellate court.
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Why is this significant, apart from the continued threat to the income of attorneys? Because of the rise of common interest housing and the inclusion in housing sales of a package of privatized services, responsibilities, and restrictions--all of which need to be fully understood by the buyer, which requires a lawyer to explain them. I think buyers need to be fully informed of how CC&Rs and an HOA or condo association will affect their expectations of home ownership. I'd like to see more lawyer involvement in explaining these documents, not less. These non-lawyer employees are not qualified, or allowed, to interpret or explain things. Having mortgage company employees doing what lawyers would otherwise do just increases the pressure to get the whole transaction over with as speedily as possible without bothering to secure full understanding by the buyer of what he or she is getting into.
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