One of the considerations in deciding whether you should hire a lawyer to help you fight your foreclosure is the cost. It's essential to understand how legal fees work to ensure you don't end up paying more than you can afford.
Most foreclosure defense attorneys structure their fee agreements with homeowners in one of three ways:
Read on to learn more about how foreclosure defense attorneys charge for their services, the pros and cons of the various fee arrangements, and how much an attorney will likely charge to represent you in a foreclosure action.
Some foreclosure defense attorneys charge an hourly rate for their services. The rate can range from around $100 to several hundred dollars per hour.
With this fee arrangement, the lawyer generally collects an initial retainer of several thousand dollars—an advance payment to the attorney before starting to work on your case. The retainer amount and hourly rate vary widely, depending on the attorney's experience and the standard rates in the area.
The benefit to this fee arrangement is that you'll only pay the attorney for the time worked on your case.
The downside is that while the attorney will probably be able to give you a likely range of what you'll pay in total, you won't get an exact price as far as what the total cost of the foreclosure defense will be—and hourly fees can add up quickly.
Some attorneys charge a flat fee to represent homeowners in a foreclosure. Generally speaking, the fee can range from $1,500 to $4,000, depending on the case's complexity.
The benefit of paying a flat fee is that you know the total cost of your foreclosure defense ahead of time. Whether it takes five months or two years to dismiss the foreclosure or for the lender to complete the process, you know that this is all you'll pay.
The downside is that not all foreclosure attorneys offer this option, and you'll have to pay the fee upfront, which is difficult for many distressed homeowners.
Some foreclosure attorneys charge an upfront retainer ranging from several hundred to several thousand dollars and then a monthly fee (like $500) for each month that the foreclosure is pending. In addition, attorneys have been known to charge an extra fee on top of this amount, called a "contingent fee," if the case is dismissed due to the firm's efforts.
The benefit of paying a monthly fee is knowing what your attorney will cost each month without variation. Also, the attorney is incentivized to keep you in the property for as long as possible (if that's your goal).
The downside is that you must pay this amount each month, even if little activity takes place in your case during that time.
Foreclosure defense attorneys will also charge for costs, like mailing, travel expenses, and court costs, on top of their fee.
When the foreclosure crisis occurred, it became difficult for many people, including attorneys, to find work. As a result, many attorneys became foreclosure defense "experts" overnight, marketing their services to distressed homeowners. In some cases, the fees that attorneys charge for services related to foreclosure aren't reasonable.
So you must be careful and research when hiring an attorney to fight your foreclosure. When deciding whether a foreclosure defense fee is reasonable, ask yourself whether the attorney is charging a fair amount considering the services provided or whether the lawyer is trying to get a windfall from your situation.
Be aware, as well, that many scammers prey upon homeowners in foreclosure. Take steps to avoid foreclosure rescue scams.
To find out precisely what it will cost you to fight a foreclosure with a lawyer's help, make an appointment to talk to a foreclosure attorney in your area.