Foreclosure Lawyers

If you are facing foreclosure, you’re not alone. Thousands of homeowners find themselves in this situation each year. An experienced foreclosure lawyer can guide you through this process and help protect your rights. They can assist you in understanding the foreclosure process, dealing with the mortgage, and might even be able to halt or delay the foreclosure.

Understanding the Foreclosure Process

Foreclosure is not an overnight experience. It follows a timeline that can vary depending on the state in which you reside. Generally, after missing a few mortgage payments, the lender will send you a notice of default. If you can’t remedy the situation, the lender will then initiate the foreclosure process. This is where having a lawyer can be priceless. They can help you with this timeline, ensuring you are aware of critical dates and your rights at each stage.

Here are the common stages and critical dates in many foreclosure processes that homeowners should be aware of.

Foreclosure Timeline and Homeowner’s Rights

After a homeowner begins to fall behind on mortgage payments, the foreclosure timeline typically unfolds in the following way.

Missed Payments

The process usually starts with the homeowner missing one or more mortgage payments. Depending on the terms of the mortgage agreement, the lender might immediately consider this a default, or they might wait for a certain number of missed payments.

Notice of Default

After a predetermined period, typically 30 to 60 days of missed payments, the lender sends a Notice of Default (NOD). This is an official notification informing the homeowner that they are in default and need to take action to remedy the situation. At this stage, homeowners usually have a right to catch up on their payments, often referred to as “curing the default,” to stop the foreclosure process.

Notice of Foreclosure

If the homeowner doesn’t cure the default within a certain timeframe (often 90 days after the NOD), the lender may issue a Notice of Foreclosure or Notice of Sale. This notice specifies the date on which the property will be sold at auction. Even after receiving this notice, homeowners often still have the right to reinstate the loan or seek other remedies.

Foreclosure Auction

If no solution is found by the auction date, the property will be sold to the highest bidder. In some states, homeowners have what’s known as the “right of redemption,” meaning they can still reclaim their property after the auction if they can pay off the outstanding mortgage amount, as well as any additional costs or fees.

Post-Foreclosure Rights

After the property has been sold at auction, the previous homeowner may have a certain period during which they must vacate the property. However, in certain situations, they might have the right to stay in the property for a specific period, commonly known as “cash for keys.” It’s also at this stage that a deficiency judgment can come into play, which is when the lender pursues the homeowner for the difference between the auction price and the remaining mortgage amount.

Cash for Keys

“Cash for keys” is an arrangement between the foreclosing lender and the homeowner. Instead of going through a potentially lengthy and expensive eviction process after the property has been foreclosed upon, the lender offers the homeowner a cash incentive to voluntarily vacate the property by a specific date and leave it in good condition.

The benefits of such an arrangement for the lender include saving time and money associated with eviction proceedings and ensuring that the property is not damaged (a risk that sometimes arises when disgruntled homeowners are forced out). For the homeowner, “cash for keys” provides a financial cushion to facilitate their move and transition.

Dealing with the Mortgage

When foreclosure looms, many homeowners feel trapped, not knowing how to deal with their mortgage situation. A foreclosure lawyer can assess your situation and advise on potential strategies. These might include loan modifications, refinancing, or even negotiating with the lender. Additionally, if there’s a possibility of a deficiency judgment – where the lender can come after you for the difference between the mortgage amount and the foreclosure sale price – a lawyer can provide guidance on how to handle or avoid it.

Deficiency Judgment

When a property is sold at a foreclosure auction, there’s a chance that the final sale price won’t cover the outstanding balance of the mortgage. The difference between the auction price and the total mortgage owed is known as the “deficiency.”

For example, let’s say a homeowner owes $300,000 on their mortgage, but the home only sells for $250,000 at a foreclosure auction. This leaves a deficiency of $50,000.

In many jurisdictions, the lender can pursue a deficiency judgment against the homeowner for this difference. If granted by the court, the homeowner would be legally obligated to pay the lender the amount of the deficiency, which in the example above, would be $50,000.

However, it’s worth noting that not all states allow for deficiency judgments after foreclosure, and even in states that do, lenders don’t always pursue them. Whether a lender chooses to seek a deficiency judgment may depend on the borrower’s financial situation, the cost of litigation, and other factors. Apart from the borrower’s financial situation and the cost of litigation:

• Collectability: If a lender believes the borrower is “judgment-proof” (i.e., they have no assets or means to pay the judgment), they might forgo the process.
• State Regulations: Some states limit the amount lenders can seek in deficiency judgments or disallow them entirely.
• Public Relations Concerns: Lenders may avoid aggressive collection tactics to preserve their public image, especially if pursuing a deficiency judgment might generate negative press.
• Potential Bankruptcy: If a borrower declares bankruptcy, collecting on a deficiency judgment becomes even more challenging.
• Internal Policies: Some lenders have internal policies or thresholds determining when to pursue deficiency judgments based on amounts or circumstances.
• Time and Resources: Lenders might consider whether pursuing the deficiency is worth the time, effort, and resources, especially if the amount is relatively small.

Understanding these stages and the associated rights is essential for homeowners. Being proactive and knowledgeable can provide more opportunities to prevent foreclosure or negotiate better terms with lenders. It’s also why many homeowners choose to enlist the aid of a foreclosure lawyer, ensuring they are fully aware of their rights and the critical dates throughout the process.

How Much Does It Cost to Hire a Foreclosure Lawyer?

The cost of a foreclosure lawyer can vary based on your location, the complexity of your case, and the experience of the lawyer. Some attorneys might charge a flat fee, while others could charge hourly. It’s important to understand the fees that a lawyer charges upfront. While it might seem like an added expense during an already financially strained time, investing in professional legal assistance can potentially save you a lot more in the long run by preventing costly mistakes or ensuring the best possible outcome for your situation.

Seeking Legal Help

Facing foreclosure can be overwhelming, but you don’t have to go through it alone. Experienced legal assistance can provide clarity and options during this challenging time.

If you’re in need of support, consider seeking out a foreclosure lawyer through LegalMatch. We can help connect you with attorneys who are well-equipped to handle your specific needs.

Don’t wait; the earlier you get help, the more options you might have.