The fear of foreclosure can be paralyzing for many homeowners, yet states tend to be highly protective of those who have taken out a mortgage loan.
Lauren Rode, a senior attorney with Consumer Action Law Group says, “No one should lose their home to foreclosure because they defaulted on payments for a temporary hardship. Often times, borrowers fall behind on their mortgage payments because of unforeseen financial difficulties which resulted in getting a foreclosure notice.”
Navigating the foreclosure process can be a daunting task for most, therefore, it often pays to have sound legal advice to dispute a foreclosure process. Yet before reaching for the phone, homeowners are advised to have all their documentation in order, including their last two federal income tax returns, two most recent W-2 forms, last six months of pay stubs, and proof of other income, as well as a letter explaining their situation.
“You can do yourself a favor by creating a chronology, preferably no longer than one page, of what happened to you,” says Maeve Brown, a public interest lawyer and director of Housing and Economic Rights Advocates.
When choosing a lawyer, it is best to consider one’s options. Thomas Martin, president of America’s Watchdog, a nonprofit consumer advocacy group, recommends contacting a local bar association to find “an ethical law firm” that specializes in loan modification.
According to PreventLoanScams.org, a site operated by the nonprofit Lawyers’ Committee for Civil Rights Under Law, homeowners should wary of any lawyer that promises a positive outcome from the outset. Not all loans can be modified. They should also avoid anyone asking for money upfront.
Dan Harris, CEO of Home Retention Group, a loan modification service in New York says, “If anybody is asking for $2,000 or $3,000 or $4,000 upfront to do your modification for you, their incentive to help you is gone when you give them the money, unless they are just a mensch. People shouldn’t be paying those fees upfront.”
Homeowners can apply for a loan modification directly with their bank for a more reasonable payment, yet having a professional review the case can give a homeowner more options.
According to Lauren Rode, one of the foreclosure attorneys of Consumer Action Law Group: “In many cases, as soon as the lender denies the homeowner’s application for the loan modification, they will move forward with the foreclosure, and we can help.”
For example, by filing chapter 13 bankruptcy many homeowners can immediately stop a foreclosure. With a chapter 13 bankruptcy, homeowners will have 3-to-5 years to fully repay their missed mortgage payments and will not have to fully repay their unsecured debt, such as credit card or medical bills.
While some homeowners can prevent foreclosure by filing bankruptcy, some face foreclosure as a result of their lenders’ wrongful practices. In these cases, homeowners can file a lawsuit against their bank by hiring a home foreclosure attorney.
Some states, such as California have laws against wrongful lending practices. These laws prevent banks from deceiving homeowners by “lying to [them] about putting a hold on [their] foreclosure while [they] are being checked for modification,” said Attorney Lauren Rode. If homeowners are being treated unfairly, a lawyer specialized in home foreclosure can help file a lawsuit against the mortgage holder.
“Lawyers can be and have been very helpful in many cases,” says Howard Miller, a partner at Girardi Keese, a Los Angeles law firm. Miller says attorneys can help homeowners understand their legal rights, negotiate with the bank, complete the required paperwork for a loan modification and even stop a foreclosure sale.
Though Miller adds that homeowners should ask for references. A knowledgeably attorney should be able to attest to their experience in loan modifications and describe the results they have obtained for other clients, as well as give homeowners the contact information of previous clients who can attest to the quality of the lawyer’s services.
A lawyer can often provide peace of mind throughout a foreclosure process.
“People fall behind in making mortgage payments often due to various setbacks, such as losing a job or having a health crisis. Without legal assistance, they would lose their homes without even knowing all of their legal options,” says Tyler Levsen, an attorney in Missouri specialized in defending homeowners in foreclosure proceedings.