When face with foreclosure, a homeowner does not necessarily have to lose his or her house. Foreclosure lawyers can help homeowners dispute wrongful foreclosures and develop defenses against lenders to be sued in court. If successful, a foreclosure lawyer can stop the foreclosure process and remain in your house.
What are Possible Defenses to Foreclosure?
You can maintain a defense against a lender if you show that the lender has not followed established rules and procedures either set by the lender or the government. For instance, if the lender fails to provide the homeowner with a “notice of default,” the homeowner, regardless of the status of mortgage payments can challenge the lender on the ground of inadequate notice. The foreclosure lawyer can inform you of the foreclosure notice laws in your state and the process by which you can prepare a defense on those grounds.
Before stricter regulations on mortgages, lenders routinely transferred mortgages to different purchasers, in the process losing documentation and confusing ownership of the mortgage. In the event that the right of the lender to foreclose is muddled, a foreclosure lawyer can help you track down the true owner of the mortgage, thusly preventing the foreclosing party from continuing the foreclosure. In addition, due to a lack of accounting, the lender records may be inaccurate and fail to post certain payments, therefore showing the homeowner to have defaulted, although it was truly the lender that failed to keep accurate records.
The homeowner can also have the foreclosure lawyer challenge the initial lending process to prove that the lender did not comply with proper regulations to disclose the terms and conditions of the mortgage. In addition, there may even be evidence of mortgage fraud, where the consumer got a different mortgage, with different terms than what was initially offered. This may include changes to interest rates, from fixed to adjustable, a higher principle amount or additionally fees that were improperly disclosed. Foreclosure lawyers are invaluable when seeking evidence of mortgage fraud and preparing a defense against lenders.
What If I Can’t Defend Against My Foreclosure?
It is entirely possible that due to financial hardship you may actually owe a significant amount of money on your home. You cannot dispute the terms of the mortgage and you decide that you want to give the house back to the lender. You will still want a foreclosure lawyer to help you navigate the process and avoid potential pitfalls. For one, the lender may force a deficiency judgment, in accordance with state laws, to demand additional payments on the house. This happens when the amount owed is more than the value of the actual home. The lender will be able to go after you within five years to force you to repay the balance, by whatever means they deem necessary, such as seizing assets. At this point, it may be best to declare bankruptcy and release the mortgage debt. Still, if there is any chance of wrongdoing on the part of the lender, using a foreclosure lawyer and filing a defense at the lender can help you reach favorable terms, or even a dismissal of the foreclosure.
What are Improper Alternatives to Foreclosure Lawyers?
There are a number of poor and downright fraudulent alternatives to having a foreclosure lawyer handling your case. In recent years, dubious credit counseling, debt consolidation and mortgage modification enterprises have sprung up, offering to-good-to-be-true schemes to reduce consumer debt. In reality, these organizations are just other lenders that take your debts and consolidate or otherwise reconfigure the amount owed into high interest, exploitive arrangements that are almost always to the detrimental to consumers.
Evaluating Experience & Education
Although it is required of lawyers to graduate from an accredited law school and pass the bar examination, it never hurts to examine the foreclosure lawyer’s credentials. You will not be able to determine the breadth of the lawyer’s experience or his or her competence from a cursory look at their educational credentials, but it will help you to anticipate the caliber of the lawyer.
Advertising and name recognition are not always hallmarks of good lawyers and should never be used when evaluating an attorney.
Preparing for an appointment
When you meet with a foreclosure lawyer, you will need to bring all documents related to the mortgage and all agreements made with the lender, especially the initial agreement documents. You must also bring all notices sent by the lender and any recent payments made by you to the lender. You should be able to account for all payments you make to the lender. This documentation will help foreclosure lawyers prepare a possible defense against the lend claims, or will help the lawyer determine the next steps you can take, even if that means personal bankruptcy.
Rates, Fees & Retainers
There are various fees that are accrued when consulting and retaining a lawyer. It is important to be aware of these fees. Hourly rates may be exceptionally high for some lawyers and if the case will become a lengthy process, a retainer may be necessary. You should be able to get all fees in writing from a reputable attorney.
A retainer fee is a non-refundable advance payment by the client that covers the cost of services provided by the lawyer. The retainer is refilled at the discretion of the foreclosure lawyer as the lawyer may bill the retainer several times for lengthy cases. If you cannot afford to keep a lawyer on retainer, the lawyer may work by hour.
A referral fee can be charged by some attorneys that do not specialize in your case but do know another attorney at another firm with that specialty. This does not increase the fees that the client must pay, but is merely an agreement between two attorneys to share the award. The State Bar usually requires the approval and disclosure of this agreement to the client. An attorney that has been referred has the best incentive to win the case and indeed some of the best lawyers only accept referrals.
Some homeowners in need may be eligible for pro bono legal aid if they are able to demonstrate that they cannot afford quality legal representation and their case is compelling enough to warrant this exceptionally limited service.