The idea of losing your home to foreclosure is terrifying. A lawyer's expertise can provide you peace of mind throughout the stressful process -- but coming up with the funds for a lawyer when you are struggling to keep your home is often a challenge. You may wonder if it is really worth the cost. In some cases, a lawyer may be able to stop foreclosure, or at least buy you more time. Even if you can't keep the home, a lawyer might be able to help you escape the liability associated with foreclosure.
Reviewing Your Loan Documents
A lawyer can review your loan and address any unfair or predatory lending practices. For instance, a lender may improperly file a foreclosure or make errors in the loan documents at closing. According to the federal Truth in Lending Act, even a slight mistake in calculating your annual percentage rate could result in a violation of the act, giving you the right to rescind the loan. Rescinding basically allows you to cancel the loan.
Advocating on Your Behalf
A real estate lawyer is an expert on state foreclosure laws. The lawyer can explain your rights, the process, and any available prevention methods. Your lawyer can also negotiate directly with the bank on your behalf to reach a solution outside of court. Possible options include a loan modification, short sale, or deed in lieu of foreclosure. Having a lawyer fighting on your side improves your chances of having effective communication with the bank. You're less likely to get lost in the shuffle or thrown on the back burner.
Filing a Legal Response
If you are in a state that requires judicial foreclosures, the lender must file a lawsuit against you to foreclose. Once you are served with papers, you have a certain number of days to respond. The legal terminology is often overwhelming. A lawyer can explain the paperwork and file your answer to the complaint with an appropriate defense. The lawyer may even file a counter claim, counter-suing the lender for violations of the law.
Bankruptcy can temporarily stop a foreclosure. It is always best to consult a lawyer if you are considering bankruptcy. Chapter 7 bankruptcy is the form of bankruptcy used to wipe the slate clean. Filing automatically stops the foreclosure clock. You can't keep the home permanently, but your liability is released. In Chapter 13 bankruptcy, debt is restructured to make your payments more affordable. If you can afford to resume making your normal mortgage payment, the arrears may be reduced. Debt must be paid to the trustee through a monthly repayment plan. Bankruptcy is complicated and certain eligibility requirements must be met. The attorney can guide you through the process and paperwork. If you are considering bankruptcy, it can be used as a defense in your foreclosure response.
Jeannine Mancini, a Florida native, has been writing business and personal finance articles since 2003. Her articles have been published in the Florida Today and Orlando Sentinel. She earned a Bachelor of Science in Interdisciplinary Studies from the University of Central Florida.