If you are wondering "Do I need a foreclosure lawyer?" then read on for everything you need to know about when you should hire one.
If you’re facing foreclosure, it can be a stressful and intimidating experience. Foreclosures can play out several different ways, but it can be tough to know what options are available to you, much less which of those options is best for your circumstances.
A key question many people have is whether they need to hire a foreclosure lawyer. Foreclosure lawyers can help you navigate the process and help fight for the best possible outcome, but it doesn’t always make sense to hire a lawyer if you don’t plan on fighting the foreclosure.
This article addresses certain situations in which it probably doesn’t make sense to hire a foreclosure lawyer; intermediate options if you want to take action but don’t plan on contesting the foreclosure outright; and situations in which it does make sense to have a legal expert on your side.
In some situations, it’s pretty clear you don’t need a foreclosure lawyer.
For instance, if you just want to remain in the home during the foreclosure process, you probably don’t need to hire a lawyer. You still own the property and can remain in your home up until the foreclosure sale is completed and the new owner takes title to the property.
Also, if you don’t have any defenses to the foreclosure, then there is likely no need to hire a lawyer. So, for instance, if you simply can’t afford your mortgage going forward and you’re behind on payments, then it probably doesn’t make sense to spend effort (or money) fighting the foreclosure.
There are two intermediary options short of a full-blown legal fight that you should be aware of.
First - the U.S. Department of Housing and Urban Development (HUD) sponsors housing counseling agencies that can speak with you free of charge. Speaking with a HUD-certified counselor can be a great first step in assessing your situation.
Second - loss mitigation applications, discussed more below, are a way to seek alternative outcomes to a foreclosure sale that do not rely on outright contesting the validity of the foreclosure.
If you want some extra time in the home before the foreclosure is finalized, one option is to submit a loss mitigation application to your loan servicer.
Congress passed federal laws following the 2008 financial crisis to protect homeowners, including by requiring loan servicers to assist borrowers who are having difficulty making mortgage payments.
A loss mitigation application requires the loan servicer to evaluate whether you qualify for any loss mitigation options such as loan modification, long-term special forbearance, or pre-foreclosure sales.
Be aware that there are important deadlines associated with filing a loss mitigation application. You must file the application either before the foreclosure process starts or more than 37 days before a foreclosure sale.
The loan servicer is generally not required to consider more than one loss mitigation application, though, unless you catch back up on your payments in between loss mitigation applications. But by law, your loan servicer must consider a valid loss mitigation application, which can extend the amount of time you are able to remain in the property.
If you want to fight your foreclosure, it can be critical to have a foreclosure lawyer on your side to help you navigate the process and fight for the best possible outcome. The question of whether or not to fight your foreclosure often comes down to whether you have a viable defense.
Some viable defenses include:
If you have a viable defense, it probably makes sense to consult with a foreclosure lawyer and discuss your options.
Another scenario in which it might make sense to hire a foreclosure attorney to assist you is if you’re an active military servicemember. The Servicemembers Civil Relief Act (SCRA) provides protections to active duty servicemembers, including protections related to non-judicial foreclosures and against default judgments (which come up in the context of judicial foreclosures).
Additionally, if the loan servicer is “dual tracking” - that is, foreclosing while a valid loss mitigation application is pending - you should act quickly. Federal laws prohibit dual tracking, and it is far more challenging to get your home back after a foreclosure sale is completed. So in this scenario you should consult a foreclosure lawyer immediately.
The question of whether to hire a foreclosure lawyer will depend on your particular situation and where you are in the foreclosure process.
As discussed, there are a number of situations where it probably does not make sense to hire a foreclosure attorney, as well as intermediate steps you can take short of hiring a lawyer and fully contesting the foreclosure process.
Two related questions you should ask yourself when deciding whether hiring a foreclosure lawyer makes sense are:
The second question often comes down to your financial situation. The reality is that if you’re facing a foreclosure, you may not be well-situated to incur additional costs in the form of legal fees. (Check out our article for more info on how much a foreclosure lawyer costs).
But, if you have a viable defense and want to fight the foreclosure, having an experienced foreclosure lawyer on your side can be a tremendous help.