Can an attorney stop foreclosure? Yes, we can. Call us now. Look – If you’re behind on your mortgage payments and a foreclosure sale is looming, you might still be able to save your home. You can potentially file for bankruptcy or file a lawsuit against the foreclosing party to possibly stop the foreclosure entirely, or at least delay it. If you have a bit more time, you can apply for a loan modification or another workout option. If a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy.
The automatic stay will stop the foreclosure in its tracks. Once you file for bankruptcy, something called an “automatic stay” immediately goes into effect. The stay functions as an injunction prohibiting the bank from foreclosing on your home or otherwise trying to collect its debt. So, any foreclosure activity must be halted. The bank may file a motion for relief from the stay. The bank will probably attempt to have the stay lifted by filing a motion seeking permission from the court to continue with the foreclosure. Even if the bankruptcy court grants this motion and allows the foreclosure to proceed, the foreclosure will be delayed at least a month or two. This should provide you with time to explore alternatives to foreclosure with your bank.
Chapter 13 Bankruptcy vs. Chapter 7 Bankruptcy
If you want to keep your home, a Chapter 13 bankruptcy might help you accomplish this goal. But if you’re simply trying to buy some time by stalling the foreclosure, a Chapter 7 bankruptcy might be right for you.
Benefits of a Chapter 13 Bankruptcy
A Chapter 13 bankruptcy can help you keep your home by restructuring your debts. You will repay debts which some in part and some in full over a period of three to five years as part of a repayment plan. You might be able to avoid foreclosure and remain in your home with this type of bankruptcy because you can repay any delinquent mortgage payments through the plan. Also, you will likely pay a fraction (or sometimes, none) of your unsecured debts during the plan period and possibly eliminate certain other debts like underwater second and third mortgages because they’re considered unsecured loans entirely when you complete your plan, freeing up money for your first mortgage. Even if you can’t complete the plan, filing for Chapter 13 bankruptcy will give you at least several months before a foreclosure can be completed.
Benefits of a Chapter 7 Bankruptcy
If you’re already in foreclosure, filing Chapter 7 bankruptcy isn’t usually a good way to save your home unless you can get a loan modification. But it will delay the foreclosure proceedings and provide you with time to live in the home without making payments. You can put this money towards saving up for a rental. You can also use this time to try to work with the bank to come up with a way to avoid foreclosure. And, even if you still go through a foreclosure, a Chapter 7 bankruptcy can eliminate your personal liability for the mortgage debt, which means you won’t be liable for any deficiency remaining after the foreclosure. Also, if you already filed for bankruptcy within the past year, the stay could be limited to 30 days or eliminated altogether.
If your bank is using a non-judicial process to foreclose where the foreclosure is completed outside of the court system then, you might be able to delay or stop the foreclosure by filing a lawsuit against the bank to challenge the foreclosure. This tactic normally won’t work if the foreclosure is judicial because by the time of a foreclosure sale, you’ve already had your opportunity to be heard in court.
To prevail, you’ll need to prove to the satisfaction of the court that the foreclosure should not take place because, for example, the foreclosing bank:
• can’t prove it owns the promissory note
• didn’t act in compliance with state mediation requirements
• violated a state law, like a Homeowner-Bill-of-Rights law
• didn’t follow all of the required steps in the foreclosure process (as determined by state law), or
• made some other grievous error.
Apply for a Loan Modification
While you can’t wait until the very last minute with this option, you might be able delay a foreclosure by applying for a loan modification, or another foreclosure avoidance option, because the bank could be restricted from dual tracking. Dual tracking is when the bank proceeds with the foreclosure while a loss mitigation application is pending. Ultimately, if your modification application is approved, the foreclosure will be permanently stopped so long as you keep up with the modified payments.
Federal Rules Restrict Dual Tracking
Under federal law, if a complete loss mitigation application is received more than 37 days before a foreclosure sale, the servicer may not move for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until:
• the servicer informs the borrower that the borrower is not eligible for any loss mitigation option (and any appeal has been exhausted)
• the borrower rejects all loss mitigation offers, or
• the borrower fails to comply with the terms of a loss mitigation option such as a trial modification. Be aware that the servicer generally doesn’t have to review more than one loss mitigation application from you. But if you bring the loan current after submitting an application, the servicer must consider it.
• Sometimes, homeowners aren’t able to afford the fees that an attorney would charge to represent them during a foreclosure. If you’re facing a foreclosure, but don’t have money available to hire a lawyer to work with you throughout the process, you might want to consider: dealing with the foreclosure on your own without an attorney
• paying for just one consultation with a lawyer, or
• getting assistance from a free legal aid society or a foreclosure prevention clinic in your area.
How Much Will a Foreclosure Lawyer Charge?
Most foreclosure attorneys structure their fee agreements by charging an hourly rate, collecting a flat fee, or charging a monthly rate. The amount you’ll pay in total could range from several hundred dollars to several thousand dollars. Exactly how much you’ll have to pay varies based on a number of factors, including the attorney’s level of experience and how much other attorneys in the area charge. Here are a few alternatives if you can’t afford to hire a lawyer to assist you throughout a foreclosure.
Deal With the Foreclosure without a Lawyer
If you don’t want to fight the foreclosure, you can probably deal with it on your own. You should educate yourself about what steps are involved, how long a foreclosure typically takes in your state, and exactly when you’ll have to move out of your home. You can apply for a mortgage modification during foreclosure without an attorney. You probably don’t need an attorney to help you apply for a mortgage modification. A modification is a permanent change to the loan terms, such as an interest rate reduction, to make the monthly payments more affordable. If you apply for a modification, you might be able to work out an agreement that will allow you to keep the home. Even if you can’t work out a deal, applying for a modification will buy you some time to stay in the home before the lender completes the foreclosure. Generally, under federal law (and some state laws), a foreclosure must stop while the servicer evaluates your application. Furthermore, you should seriously consider hiring a foreclosure attorney if you think you have a valid defense to the foreclosure. In most cases, you’ll have to raise the defense in court, either by filing your own lawsuit (if the foreclosure is non-judicial) or responding to the lender’s lawsuit (if the foreclosure is judicial), which can be complicated. This means that it is usually better to hire an attorney than to go it alone if you want to successfully save your home.
Sometimes lenders will agree to set up a repayment play through which you can make up your unpaid amounts over a longer term. This is a less common resolution, but is something that some lenders and mortgage servicers offer.
Partial Claim / Advance Claim
A partial claim is a tool used for FHA-insured loans in which the borrower receives a second loan (typically interest free) that enables them to become current on the primary mortgage. If you have a conventional loan, your lender may utilize an advance claim, which is similar. However, these workarounds are difficult to qualify for, and thus rarely are a viable option. Your foreclosure defense lawyer can help you determine if you are eligible for this option.
Occasionally, but not often, a lender will agree and waive a payment to get you current on your loan. The term that applies to this action is debt forgiveness. Typically, any debt forgiveness comes after you have established a positive payment history on a loan modification. However, any debt forgiveness is usually at the discretion of your lender, so make sure you review any fine print related to any forgiveness claims.
If you have sufficient equity in your home, the lender may agree to refinancing that increases the balance of your loan to cover back payments and re-amortize the loan over the payback period. Or, depending on the delinquency, you may be surprised to find out that you can refinance the loan with a third party.
Deed In Lieu Of Foreclosure
In some cases, you may be able to deed your home to the lender to satisfy your mortgage obligation. You should only take this action directly with your lender or servicing company. Do not ever deed your property to any other company or individual. A deed in lieu of foreclosure may have tax implications that a foreclosure defense lawyer can help you consider.
Sell Your Home
Selling your home on your own may be a way to resolve mortgage problems. If your home is worth less than the amount you owe on the loan, the sale might be a short sale (selling the property for less than it’s worth), which requires approval of the lender.
Cost of Foreclosure Defense
For most facing foreclosure either now or in the future, something has changed in their lives that is already causing more than enough stress without any help from the looming loss of their home. Many find that their change in circumstances leaves them unable to make monthly mortgage payments, and they face foreclosure simply because they don’t know what they need to do or how to go about it. When you interview lawyers to help keep your home, you might feel lost. The cost of foreclosure defense will vary somewhat depending on the solution you choose and how your lawyer charges for their foreclosure defense services. The first step to understanding what foreclosure defense is going to cost is to know what kind of defense you’re looking for. While one method may cost more than another when speaking in dollars and cents, “cheaper” methods may only seek to extend the foreclosure process rather than completely halt it.
The cost of foreclosure defense comes down to three basic three types of payment methods employed by foreclosure defense law firms that will determine your cost of foreclosure defense:
• Hourly – Some attorneys will charge hourly for their services which can add up quickly.
• Monthly – Often times the best choice is a monthly payment which allows for lower costs overall.
• Flat-Rate – Given that foreclosure can take up to two years, this can be the cheapest solution, though few still offer it.
Some homeowners believe they were harried through the mortgage process or were unjustly foreclosed upon. These homeowners will often choose to hire an attorney to sue their lender. Before accepting a client, these attorneys carry out an extensive forensic evaluation where they search for incorrect paperwork, evidence of exploitation, and other irregularities that may have proven disadvantageous to the homeowner. If the attorney is able to find enough improprieties to build a case with, then he or she will accept the homeowner as a client and file a lawsuit against that homeowner’s lender.
Hiring this type of foreclosure defense is often the most costly method of fighting foreclosure, and requires a significant investment. A foreclosure lawyer with hourly rates often charges an initial retainer fee of around $5,000 and charge a minimum of about $300 to $350 per hour. Filing Answers and Affirmative defenses can take more than 4 hours, and the cost would be half of your retainer. The entire legal process usually takes a year or more, and can included mediation, multiple hearings and sometimes stopping foreclosure sale dates. When paying a foreclosure defense lawyer hourly, the cost of foreclosure defense can range from $8,000-$15,000 or more. Even with this kind of investment, it’s not guaranteed that a homeowner will win their case and be able to stay in their home.
Some foreclosure defense law firms charge a flat fee of $3,000 to $4,000, which must be paid when the firm is hired. A flat fee for foreclosure defense can give homeowners a feeling of security, because they have paid their lawyer and have no further financial obligation until they have a mortgage to pay again. Depending on the current state of your foreclosure defense, there may be 3 months left in your case, or there might be 2 years left in your case. Many homeowners who have fallen on financial hardship are unable to afford a $4,000 payment all at once. It is important that you fully understand your attorney-client retainer agreement and it is clear what foreclosure defense services your attorney will provide you. Most responsible homeowners will hire an attorney that charges monthly fees. One of the benefits to paying your attorney a monthly fee is that you have confidence that you know what your attorney’s costs are. The amount you pay will never fluctuate. A homeowner is able to budget this payment each month until they are able to pay their mortgage again. Foreclosure defense lawyers that charge a monthly fee will charge $400 to $1,000 per month. Be cautioned though, because an attorney must be able to show that they are providing you services and prove that their fees are reasonable. Homeowners paying monthly fees to their foreclosure defense attorneys also feel more in control because they are often more involved in the foreclosure defense process because they are more empowered to release their attorney at any time without risking their investment.
Free Initial Consultation with Lawyer
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506