If you’re a struggling homeowner facing foreclosure, you’ll need to decide not only if it's worth your time to fight the foreclosure, but also if it's worth paying 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's appropriate to hire an attorney to help you and what you can do on your own.
Below are some situations where you should consider hiring, or at least consulting with, an attorney.
If you believe you have a defense to the foreclosure, and you want to keep your home, you 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's 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:
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. (To learn more, see Foreclosure Protections & the Military: When a Servicemember Gets a Mortgage Before Active Duty.)
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.)
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 federal and, in some cases, state laws. (Learn more about laws that prohibit dual tracking.)
Because 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 before the sale. Having an attorney on your side gives you a better chance of getting results before the sale takes place.
The following are a few situations where you probably don’t need to hire an attorney.
You might not 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. (To learn more, see When Do You Have to Leave Your Home When It's in Foreclosure?)
Exception. While you might not 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 to you, you'll 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.) If you're unsure about how long you can legally stay in the home, consider talking to an attorney.
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. Federal law, and some state laws, strictly limit the ability of a mortgage servicer to foreclose on a borrower while also evaluating a loan modification.
Not only will applying for a modification generally 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 How to Get a Mortgage Loan Modification.)
Keep in mind that if the servicer already evaluated you for a loan modification, you can't submit another application just to stall the foreclosure. Though, if your circumstances change, the servicer might have to perform another review.
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. 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 might 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's one available in your area.
Typically, the foreclosure stops while the mediation is ongoing and you might eventually be granted a:
Generally, you don’t need an attorney to help you with the mediation process because state law usually requires that the foreclosing party send you information about how the program works and how to sign up for it.
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's probably no reason to hire or consult with an attorney.
Likewise, if you can’t afford your house payments and don't want to keep your home, it might 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.
When picking an attorney to represent you, you should speak to several different lawyers to get more than one perspective and learn about all of the options available to you. Below are a few questions you should ask an attorney you're considering hiring.
Be sure to ask as many questions as you need to ensure that you’re comfortable about your hiring decision.
To avoid hiring a bad foreclosure lawyer, you should be on the lookout for certain warning signs including:
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