What is a Foreclosure Lawyer?
Foreclosure is a legal process that allows lenders to take back property in default. Most of the laws that govern the process are at the state-level. A foreclosure lawyer knows the laws in their state and applicable federal laws and works with clients at risk of losing their homes to their mortgage holder.
What Do Foreclosure Lawyers Do?
Too often, homeowners believe that once the foreclosure process has begun, they have no options. In fact, laws exist at both the state and federal levels to protect homeowners in foreclosure and give them opportunities to reinstate debt, get out of default, and keep their homes.
Foreclosure lawyers help their clients through this process, explaining their rights under the law, providing advice, and giving them options. Some of the many things they do for their foreclosure clients include:
- Represent you with your mortgage company to negotiate for a solution to get out of default and keep your home
- Work with your lender to modify your loan
- Pursue options for loss mitigation as outlined by state laws
- Represent you in court or a lawsuit if you believe your lender is in error in starting the foreclosure process
- Help you file for bankruptcy if it becomes necessary
- Follow the entire process of foreclosure to ensure your lender follows the law and does not violate your rights
Do I Need a Foreclosure Lawyer?
You do not need to have a lawyer representing you in the foreclosure process. You may go through it alone, without any assistance, or you can work with a foreclosure counselor certified by the Department of Housing and Urban Development.
It’s a good idea to have a lawyer advocating for you from the beginning because they can guide every step and give you a better chance of keeping your home. If you don’t hire a lawyer from the start, consider consulting with one in certain situations:
- A housing counselor suggested your chances of getting approved for a modified loan are low.
- You live in a state that requires a judicial foreclosure process, which means going to court.
- You have limited time to put something together.
- You believe your lender has done something illegal or is not following the correct foreclosure procedures steps.
- The amount your lender claims you owe is incorrect.
- You’ve stalled in mediations with your lender.
- You have mitigating factors that could allow you to stay a foreclosure, such as COVID-19 hardships or active military status.
Benefits of Hiring a Foreclosure Lawyer
While hiring a lawyer when facing foreclosure is not required, it is a smart thing to do. Your lender wants payment, or your home, and it has the right to take your home if you can’t pay. They are not necessarily on your side, but a lawyer is.
There are several important benefits of hiring a foreclosure lawyer instead of going it alone:
- Protect your rights
A lender can’t simply take your home and sell it when you miss a payment. There is a process they must follow and state laws that give you rights. A lawyer knows what your rights are and will make sure they are not violated during the process.
- Work with your lender
Foreclosure may be entirely avoidable. If you are in default, your lender will likely be willing to work with you to get paid rather than taking your home. Mediating with a bank or mortgage company is not easy, though. A lawyer will represent you and be your best advocate in the negotiations.
- Minimize losses
Foreclosure can be very complicated and confusing. Without expertise in the process and the laws, it’s easy to make a mistake that costs you money or your home. A lawyer guiding you through the entire process will ensure you keep as much as possible.
- Get a fair day in court
Lenders aren’t always in the right when they begin foreclosure. Your lawyer will look for arguments to make in court. For instance, the lender may be unable to prove they own your mortgage or may be acting against you in spite of being in active military service.
How to Choose a Foreclosure Lawyer
To find a trustworthy foreclosure lawyer you can afford, get a referral from someone who has been here before. A friend, neighbor, co-worker, or family member who has also been through a foreclosure may have a lawyer to recommend.
You can also turn to sources like Legal Aid for lawyers who work pro bono or at reduced rates for qualifying clients. If you search online for a lawyer advertising foreclosure work, take care in hiring them. Ask for a free initial consultation and discuss fees to be sure you can afford their services.
Beware of lawyers offering a guarantee or promise to save your home. A lawyer cannot make this guarantee in good faith. Also, look out for lawyers demanding money upfront, knowing full well you’re in dire financial straits.
Working with Your Foreclosure Lawyer
To help your lawyer help you, be open and honest right from the beginning. Answer all their questions, be easy to contact, and ask your own questions to stay informed about your options. Important questions to ask a foreclosure lawyer you’re considering hiring include:
- Can you see any defenses against my foreclosure?
- Has my lender made any mistakes or violated my rights?
- Do I have any alternatives to foreclosure?
- How long will foreclosure take in my case?
- Should I file for bankruptcy?
- What do you need from me?
Your lawyer will need as much information about your finances and loan as possible. Get all of your paperwork in order before meeting with them. This includes your mortgage contract and all related paperwork, payment receipts, and any communications you have had with the lender.
A foreclosure lawyer can be your best ally in a terrible situation. They may be able to help you save your home through one of several legal and financial options.