Archive for August, 2008

Why Hire a Lawyer-part 2

Saturday, August 30th, 2008

As the economy pushes people to the brink of despair I am finding my role expanding as I try to answer the question: “what can I do?” as accurately as possible. People have been so bombarded with information from their lender, from “foreclosure prevention specialists” (who charge outrageous fees for simple services), or family and friends, but still often do not have a clear picture of all of the choices that are available to them. So many people are either hopeless in situations where hope still exists for a positive result or holding on to unrealistic expectations when those expectations cannot possibly be met. In both of these extremes it is critical to talk to a lawyer who can lay out the situation as it really exists so the client can make choices based on having all of the information they can.

For example, many people have the mistaken belief that they can only negotiate workouts with lenders like loan modifications before their house actually goes into foreclosure. They think that when a foreclosure lawsuit is filed, that’s the end. This is absolutely false!!! I’ve seen deals that were negotiated and settled right before a foreclosure sale was scheduled to happen. As I stated in my last post it is often possible to gain more time to finish these negotiations by actively participating in the lawsuit and not just letting yourself be defaulted. When this simple fact is explained to many people they leave my office much happier than when they arrived knowing that all hope is not lost and there’s still time to try and save their property.

The flip side to this scenario is clients that cling to the belief that no matter what their economic situation they can still save their house. The reality is that no amount of fancy lawyering or brilliant negotiation tactics can change a situation where someone has too little income or too many expenses to catch up the shortfall and resume making regular payments on a house they cannot afford to keep. Sometimes, after hearing all of the facts a lawyer in this situation has to put on their black cowboy hat and be the voice of reason to say “you cannot afford to keep this house.” Friends and family will often not say this out of fear of hurting someone’s feelings, and rescue scammers won’t tell you that because they want your money. A good lawyer will be straight with you even if the news is bad.

Legal ethics rules define lawyers as the only people who can not only give legal advice but professional counsel about the pros and cons of a particular scenario. Whether the outlook is rosy or bleak, anyone facing foreclosure needs this type of advice.

Why hire a lawyer-part 1

Friday, August 1st, 2008

One of the most common questions I get asked is “what is the point of hiring a lawyer to defend a foreclosure?” People (naturally) assume that if someone hasn’t paid their mortgage the jig is up and a speedy foreclosure is a foregone conclusion. This is a misconception that I will try to address through the next couple of posts.

The most important reason that I can think of to hire a lawyer is to gain more time during the foreclosure process. Once someone has been served with foreclosure papers the lawyers for the lender begin the process of propelling that case through the system as fast as humanly possible to try and get to a foreclosure sale so their client can recoup some money from the property.

Having worked for the lenders myself, I can tell you that all cases get put into 3 separate piles: the largest pile by far is people that are served with a foreclosure complaint and file no response whatsoever. Those people are the easiest to obtain a final judgment against because they put up no fight.

The next pile would be people who are served and file their own response with the court. Their response will usually consist of a letter to the judge/clerk setting out all of the reasons they couldn’t pay their mortgage and asking for leniency. Unfortunately, while this is better than nothing (because it will save that homeowner from being defaulted), it won’t really slow down the process very much because no defenses are raised and a summary final judgment can usually still be easily obtained.

The last and smallest pile is of those cases that have responses (whether in the form of an Answer or a motion of some sort) filed by attorneys. These cases have to be reviewed by the lenders lawyers much more carefully and each and every point of contention has to be dealt with. THIS TAKES TIME, which gives homeowners a chance to come up with a solution.

While neither I nor any other lawyer can make promises about the outcome of a case, I can say that in every case where I have filed a written response on behalf of a homeowner the foreclosure was halted (sometimes for several months) while the lender’s lawyers reviewed my response. The fact of the matter is, anything that takes a case out of the normal flow will gain a homeowner more time. And time is valuable to anyone facing foreclosure, even if they don’t ultimately want to keep the property. It can either give them more time to come to a resolution with the lender or time to save money and secure a new place to live.

The cost of retaining an attorney for this valuable service may be well worth it for homeowners.