If you’re a struggling homeowner facing foreclosure, you’ll need to decide not only if it is worth your time to fight the foreclosure, but also if it is worth paying for an attorney to help you. In some cases (say you have a valid defense to the foreclosure and want to keep your home), you’ll need a lawyer to assist you. In other instances, such as if your goal is to stay in the home through the foreclosure process or just to gain some additional time before the bank completes the foreclosure, it often makes sense to go at it alone. Read on to learn more about when it appropriate to hire an attorney to help you and what you can do on your own.
When You Should Hire a Foreclosure Attorney
Below are some situations where you should consider hiring, or at least consulting with, an attorney.
You Have a Defense and Want to Keep Your Home
If you believe you have a defense to the foreclosure, and you want to keep your home, you most likely will need a skilled attorney to help. In most cases, you'll have to raise the defense in court, either by filing your own lawsuit (if the foreclosure is nonjudicial) or responding to the lender's lawsuit (if the foreclosure is judicial).
Each foreclosure case is different and has complicated nuances that can ultimately make or break the case. In view of this, it is unlikely that a homeowner could mount a successful defense to foreclosure without an attorney. For example, some defenses that probably require the assistance of an attorney include:
- The loan servicer didn’t follow proper foreclosure procedures. In a foreclosure, the foreclosing party must strictly follow state-specific procedures, with few exceptions. A foreclosure attorney familiar with your state’s particular foreclosure requirements can inform you if a procedural mistake is significant enough to warrant a dismissal of the case. (Learn more about the general foreclosure laws and procedures in your state in Nolo’s State Foreclosure laws area.)
- The foreclosing party can’t prove it owns your loan. For example, if your mortgage loan was bundled and securitized, determining if the foreclosing party actually owns the loan can be a challenge to say the least. An attorney can help you figure out if you have a defense based on the fact that the foreclosing party can't prove that it owns your loan. (Learn more about the securitization process.)
- Your loan servicer made a serious error with your account. Loan servicers (the companies that borrowers make their payments to) often make serious errors when it comes to managing homeowners’ accounts such as misapplying funds, failing to credit payments to the account, or charging unreasonable and non-allowable fees. An attorney who is familiar with reviewing servicer payment histories (which can be difficult to interpret) can help you figure out if the servicer made a serious error with your account that amounts to a foreclosure defense.
(Learn more about different defenses to foreclosure in Nolo’s Fighting Foreclosure in Court area.)
You’re in the Military
Active military servicemembers have some special protections against foreclosure and have certain rights under the Servicemembers Civil Relief Act (SCRA). Among other things, if you took out your mortgage before going on active duty, the servicer cannot foreclose unless it gets a court order or a waiver from you.
The SCRA is extensive and complex. If you’re on active duty and facing foreclosure, an attorney can inform you about all of your rights under the SCRA and help ensure that the servicer complies with this law. (See our article on Legal Protections for America's Military: The Servicemembers' Civil Relief Act for more details.)
You Need Help With a Loan Modification Because the Bank is Stalling or Dual Tracking
An attorney can help you with the loan modification process if the bank is stalling or dual tracking your loan (pursuing a foreclosure and a loan modification at the same time) in violation of new federal and other mortgage servicing rules. (Learn more about laws that prohibit dual tracking.)
Since it is very difficult to get your home back after a bank completes a foreclosure, you want to deal with this type of legal violation prior to the sale. Having an attorney on your side gives you a better chance of getting results before the sale takes place.
When You Might Not Need a Foreclosure Attorney
The following are a few situations where you probably don’t need to hire an attorney.
You Want to Remain in the Home During the Foreclosure
You most likely don’t need to consult with an attorney if your goal is just to remain in the home throughout the foreclosure process. You legally own your home up until the foreclosure sale. Additionally, in some states, you may be able to stay in the property through the expiration of the redemption period or until some other action, such as ratification of the sale, occurs. This can take months or, in some cases, years to complete. Even then you do not have to leave until the new owner evicts you. (Learn more in Nolo’s article When Do You Have to Leave Your Home When It's in Foreclosure?)
Exception. While you generally don’t need a lawyer to help you stay in the property during the foreclosure, you might need to hire an attorney if the bank or servicer prematurely changes the locks or removes your personal property from the home. (Banks and servicers have been known to do this.) If this happens, you will probably need an attorney’s assistance to get back into the property or retrieve your belongings.
To educate yourself about how long you can legally stay in the property in a foreclosure, conduct your own research on the Internet. (Start by reviewing Nolo’s general foreclosure laws and procedures in your particular state.)
You Want to Submit a Loan Modification Application to Gain Time in the Home
If your main goal is to gain some time before the lender completes a foreclosure (perhaps so you can come up with the funds to reinstate the loan or refinance), one way you can do this on your own is to submit a loan modification application to your loan servicer. Not only will this you buy you some time, but you might get a lower monthly mortgage payment that will allow you to stay in the home. Even if the servicer denies your application, in most cases, you’ll also get some time to make an appeal. (Learn more about how to apply for a loan modification in Nolo’s article Do It Yourself Mortgage Loan Modification.)
Keep in mind that if the servicer already evaluated you for a loan modification, you cannot submit another application just to stall the foreclosure. Though, if your circumstances change, the servicer must perform another review.
If You Need Help With a Loan Modification Application, You Can Get Free Help
If you need help putting together a mortgage modification application package for your servicer, you can get free assistance from a HUD-approved housing counselor rather than hiring an attorney to help you. The counselor will work with you and your mortgage servicer on your behalf to try to find a way to avoid foreclosure. (Go to the U.S. Department of Housing and Urban Development’s webpage to find the contact information for a housing counseling agency near you.)
You Want to Use Foreclosure Mediation to Gain Time in the Home or an Alternative to Foreclosure
You may be able to extend the amount of time that you can remain in your home or get an alternative to foreclosure by entering into a foreclosure avoidance mediation program, if there is one available in your area. (See our State Foreclosure Mediation Programs section to find out if there is a foreclosure mediation program where you live.)
Typically, the foreclosure stops while the mediation is ongoing and you may eventually be granted a:
- loan modification
- short sale, or
- deed in lieu of foreclosure. (Learn more about these alternatives to foreclosure.)
Generally, you don’t need an attorney to help you with the mediation process since state law usually requires that the foreclosing party send you information about how the program works and how to sign up for it.
You Don't Have Any Defenses to the Foreclosure
If you don’t have a valid defense to the foreclosure (for example, you stopped making your payments, have no intention of resuming them, and think your mortgage servicer has treated you fairly), then there is probably no reason to hire or consult with an attorney.
You Can’t Afford Your Home and You Don’t Want to Keep It
Likewise, if you can’t afford your house payments and don't want to keep your home, it may be a waste of time, effort, and money to fight or try to stall the foreclosure. In this situation, you don't want to throw away money hiring a foreclosure attorney. Instead, you can put that money towards finding another place to live.