Can a lawyer represent both the bank and the borrower at a residential mortgage loan closing?
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This page answers the general question as of 1990. Ezel answers yours: whether it's allowed on your facts, under the current Massachusetts Rules of Professional Conduct, with citations.
Plain-English summary
A client who already had a mortgage commitment from an institutional lender wanted a lawyer, an approved conveyancer for that bank, to handle the real estate purchase and close the bank loan. The loan documents were standard forms the lawyer could not vary, and the lawyer's role was the usual closing work: search title, ensure proper documents, compute adjustments, record, discharge liens, and certify title to both lender and borrower.
The committee analyzed the joint representation under DR 5-105, which bars representing differing interests unless the DR 5-105(C) cure is met, namely that it is "obvious" the lawyer can adequately represent each and each consents after full disclosure. It recognized that joint representation of lender and borrower can benefit both clients (lower fees, real estate expertise, familiarity), but noted their interests are most likely to diverge over the substantive content of the loan documents and commitment. Before agreeing, the committee said, the lawyer should review the documents and commitment for oppressive, ambiguous, or unusual provisions and hidden potential for conflict, and should advise the borrower about important loan terms (grace periods, default, acceleration, due-on-sale, late charges, prepayment penalties) and about the commitment's conditions, whose failure could cost the borrower prepaid fees and deposits. Use of reviewed standard forms reduced the potential for conflict because the terms could not be varied.
The committee emphasized two limits. First, unless otherwise agreed, joint representation waives the confidentiality obligation between the two clients, and both must be told so; a lawyer who learns information relevant to the transaction about one client (such as a misstatement in the application) must disclose it to the other. Second, if a conflict actually arises or either client revokes consent, the lawyer cannot continue to represent either client, and each must retain new counsel at his own expense. The committee read G.L. c. 184, sec. 17B not to bar the joint representation as long as the statute's required disclosures were made, and stressed that informed consent (best put in writing) should detail the effects on the lawyer's judgment and loyalty, the loss of privilege, the foreseeable conflicts, and whether one client was the lawyer's primary client.
Currency note
This opinion was issued in 1990, before Massachusetts's adoption of the 2015 revisions to the Rules of Professional Conduct. Subsequent rule amendments or later opinions may have changed the analysis. Treat this page as historical context, not current guidance. Verify against current rules before relying on any specific rule, deadline, or requirement mentioned here.
Common questions
Q: Can one lawyer represent both the bank and the borrower at a mortgage closing?
A: The committee concluded yes, in limited circumstances, if the lawyer first reviews the documents and commitment for conflicts, finds none unresolved, and obtains both clients' informed consent after full disclosure under DR 5-105(C).
Q: What happens to confidentiality between the two clients?
A: Unless otherwise agreed, the joint representation waives the confidentiality obligation between borrower and lender; both must be told, and the lawyer must disclose to one client information relevant to the transaction learned about the other.
Q: What if a real conflict develops or a client revokes consent?
A: The committee said the lawyer cannot then represent either client, and each would have to retain separate counsel at his own expense.
Background and rules framework
The opinion applied DR 5-105(A), (B), and (C), the Massachusetts disciplinary rule on declining or continuing representation of differing interests and the consent cure, which corresponds today to Model Rule 1.7 (concurrent conflicts and informed consent). The confidentiality discussion tracks the duty now in Model Rule 1.6 and the joint-client information-sharing principle. The committee referenced G.L. c. 184, sec. 17B (lender's disclosure to mortgage borrowers) and the federal Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq.
Citations and references
Rules of Professional Conduct:
- DR 5-105(A), (B), (C) / Model Rule 1.7 (differing interests; informed consent)
- Model Rule 1.6 (confidentiality; joint-client information sharing)
Statutes:
- G.L. c. 184, sec. 17B (lender's required disclosures to a mortgage borrower)
- Real Estate Settlement Procedures Act, 12 U.S.C. 2601 et seq.
See also
- MA Bar Ethics Op. 92-3: Dropping one client to take a conflicting representation
- MA Bar Ethics Op. 92-2: Town counsel adverse to a client served as estate executor
Source
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