How to Avoid Sleazy Foreclosure Lawyers

Tips on avoiding disreputable foreclosure attorneys if you need help fighting a foreclosure or getting a mortgage modification.

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Hiring a foreclosure lawyer might make the difference between keeping your home or losing it to foreclosure. Once you decide to hire a lawyer, the next hurdle is picking the right one. Many foreclosure attorneys are dedicated to their clients and will work hard to do everything possible to save your home. However, others take on too many cases and only care about making money off their clients’ misfortune. Read on to learn more about what to watch out for so you can avoid sleazy foreclosure lawyers.

How Bad Foreclosure Lawyers Operate

Usually, a homeowner who is facing foreclosure doesn’t have a lot of money available to pay high fees to a foreclosure attorney. To make up for this, certain foreclosure lawyers operate a high-volume business to generate more income.

This means that when it comes to bad foreclosure lawyers, the story tends to be pretty much the same: Homeowners hire the attorney to defend them in the foreclosure and, often, in seeking a mortgage modification (where the bank agrees to change the terms of the loan to make it more affordable) as well. The homeowners pay the attorney fees for such representation, but the lawyer takes little or no action in the clients’ cases or on their behalf. In some instances, the lawyer also fails to keep his or her clients informed as to the status of their cases.

Such lawyers tend to overlook critical issues in the homeowners’ cases or fail to respond to deadlines in the foreclosure, sometimes leaving the homeowner in a worse position than when they hired the attorney.

Things to Watch Out For

To avoid hiring a bad foreclosure lawyer, you should be on the lookout for the following warning signs:

  • The lawyer promises that you’ll keep your home. No lawyer can promise results or a certain outcome. A lawyer should only promise that he or she will do his or her best to aggressively work for you.
  • The attorney claims to have special skills or abilities in negotiating a mortgage modification with the bank. There’s really no “trick” to getting a mortgage modification and very little negotiating actually occurs in the process. The loan servicer (the company you make your payments to) or the investor (the owner of the loan) has certain requirements that borrowers must meet in order to get a loan modification, and if you qualify, you’ll get one. (Learn more about loan modifications and other alternatives to foreclosure.)
  • The attorney charges an exorbitant fee to represent you. It is not unheard of for some foreclosure attorneys to charge well over the going rate, which is usually based on location and the attorney’s experience. For example, some disreputable attorneys have been known to charge as much as $650 an hour in foreclosure matters. Ultimately, when trying to decide if a foreclosure attorney's fee is reasonable, ask yourself whether the attorney is charging a fair amount considering the services provided or is he or she trying take advantage of your situation. (Learn more about how much a foreclosure attorney will charge.)
  • The law firm has a catchy name like “The Keep Your Home Law Firm.” While this doesn’t necessarily mean the lawyer or the firm is unethical, it may indicate that this attorney is simply trying to capitalize off the foreclosure crisis. When the recent mortgage meltdown occurred, it became difficult for many people, including attorneys, to find work. As a result, some attorneys quickly became foreclosure “experts” marketing their services to distressed homeowners. This type of attorney is probably best avoided unless he or she is up to date with all of the changes in foreclosure law in recent years and is sincerely dedicated to this area of law. (Learn about what type of lawyer can help with your foreclosure, how to find a good foreclosure attorney, and more in Nolo’s article Hiring a Foreclosure Attorney.)
  • The lawyer advises or encourages you to lie on your loan modification application. If you’re seeking a mortgage modification, a good lawyer can and should point out what you do and don’t want to include in your modification request, but a lawyer who tells you to lie (for example, about your income or by stating that the property is your primary residence when it isn’t) is another matter. The servicer will verify the information you include in your application so you probably won't get away with it. In addition, there’s a good chance that the servicer knows the lawyer’s reputation and will scrutinize your application more closely because of it. (Keep in mind that you can request a modification on your own without an attorney’s assistance. Learn more in Nolo’s article Do It Yourself Mortgage Loan Modification.)

What You Should Do

If you want to find out if a particular foreclosure lawyer is reputable, you can call or check the website of your state’s licensing organization (the state "bar") that monitors attorney conduct to find if anyone has filed a complaint against the attorney or if the attorney has been the subject of any disciplinary actions. You can also check the Better Business Bureau website (www.bbb.org) to see if any grievances have been registered and look online for any complaints that prior clients have posted on message boards.

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