Foreclosure Attorney: What They Do, and Which One’s Right for You.
By: Michael Powers
If you are seeking assistance with mortgage delinquency or foreclosure, you’ve probably been told to “hire a foreclosure attorney”. The Federal Trade Commission (FTC) forbids “non-attorneys” from representing distressed homeowners in its mission to protect consumers. But, with so much information regarding available assistance, how do you know which foreclosure attorney is right for you? Unfortunately, there is no simple answer, and choosing the right foreclosure attorney depends on the particular facts of your situation.
Loan Modification or Loss Mitigation Attorney
If you are struggling with your mortgage payments, you may be able to resolve the situation with a ‘mortgage mitigation’ or ‘loan modification’ attorney. Even if you already have a sale date scheduled, sometimes a mortgage mitigation attorney can help. These attorneys will attempt to resolve your mortgage through a loan modification, reinstatement, or forbearance. They can also help you with foreclosure alternatives, like a short sale and deed-in-lieu of foreclosure. In other words, their objective will be to get you back on track with a mortgage payment that you can afford. If you simply cannot afford the house, they can help you obtain a graceful exit strategy.
In many cases, this is all a you need to resolve your situation. They can stop the foreclosure process by simply submitting an RMA (Request for Mortgage Assistance). Lenders are “required” to postpone your foreclosure or sale date until your application has been answered. These firms offer value in their knowledge and experience pertaining to available loan modification and foreclosure alternative program guidelines. They typically use proprietary software designed to present your request in a the most persuasive manner possible. Such law firms typically offer a “pre-litigation” retainer, which means they will represent you prior to any court proceedings. For homeowners in “judicial” foreclosure states, the foreclosure process is handled through the court. Accordingly, a loss mitigation attorney would probably not be able to assist you beyond this point.
Foreclosure Defense Attorney
In “judicial” foreclosure states, when your lender files for foreclosure, they are actually filing a lawsuit against you. You are required to answer the complaint, just as you would any other lawsuit. Failure to answer the complaint results in a “default” judgment of foreclosure being awarded to your mortgage lender. So, if you are facing a filed foreclosure in a “judicial” state, you need a foreclosure defense attorney. A foreclosure defense attorney is the next step up from a mortgage mitigation attorney. They can handle a loan modification or foreclosure alternative just like a loss mitigation attorney. In addition, they can answer a complaint in court, and even file a counter-suit when appropriate.
If your foreclosure case is already in the court system, make sure you are hiring an attorney that will actually represent you in court. This does not, however, mean that a local firm is your best choice. Some of the best foreclosure defense law firms run national operations that concentrate their practice in foreclosure defense and loss mitigation. They have an “of counsel” network that provides local attorney representation to homeowners, supported by the main office. The bigger issue is the track record of that firm. Have they been around for a long time? Do they have very few or no complaints? The legal practice of loss mitigation and foreclosure defense has been heavily scrutinized by regulators and law enforcement. Find a firm with a strong track record, regardless of their state, and you are most likely in good hands.
Foreclosure Litigation Attorney
The most effective level of foreclosure attorney representation is a foreclosure litigation attorney. A foreclosure litigation attorney can handle any functions of the attorneys listed above. They can also file lawsuits and restraining orders against your lender. A foreclosure litigation attorney will take the most aggressive approach possible, depending on the particular facts of your case. Obviously, there must be a legitimate case to file, but these days new causes of action abound for homeowners. Most states have adopted some type of consumer protection legislation for homeowners. They are typically patterned after the Department of Justice Settlement, and many are called the “Homeowner Bill of Rights”. These laws give you legal grounds to sue for things like improper loan modification declinations or “dual-tracking” issues.
A key element of this most aggressive approach is the restraining order. A foreclosure attorney can submit an application for a Temporary Restraining Order against foreclosure and eviction proceedings, while your lawsuit remains a consideration of the court. If you have a legitimate case, it is likely that a judge will grant the TRO, and the foreclosure proceedings can be postponed until your case is resolved.
The ideal law firm for a troubled mortgage would offer all of the services listed above. Unfortunately, such foreclosure attorneys and law firms are hard to find. Since the beginning of the mortgage crisis, we have seen a real evolution of mortgage relief assistance and legal services available to homeowners. It all started with “loan modification”, back when no one (especially the banks) had any idea how everything would play out. Since then, regulators have shaped the industry to protect consumers, while legislators have passed laws giving homeowners new rights. There are many reputable law firms that can keep you in your home. The best idea is to speak with a number of different firms and ask them detailed questions. When you find a foreclosure attorney or firm that can answer all of your questions to your comfort and satisfaction, you have probably found your firm.