If you’re missing mortgage payments or are on the verge of missing a mortgage payment, you would benefit from finding a foreclosure prevention attorney.
What is a foreclosure prevention attorney?
While there might not be anyone technically called a “foreclosure prevention attorney,” there are many attorneys who can help homeowners prevent foreclosure.
In fact, foreclosure prevention can mean a lot of different things!
These are all the different ways you can prevent foreclosure:
- Sell your home for equity, walk away with your money
- Negotiate a loan modification or repayment plan with your bank to retain the home
- Reinstate all your missed payments and resume making regular payments
- Accept a COVID-19 Forbearance plan and then resume regular payments once your income has recovered
- Short sell your underwater property and walk away from the home without owing the deficiency balance
- Complete a Deed in Lieu of your property and walk away from the home without owing the deficiency balance
- Sue your mortgage lender and receive relief in court
- File a bankruptcy
- Attend Foreclosure Mediation against your lender
- Open a loss mitigation review to negotiate resolution with your mortgage lender
6 questions to ask your foreclosure prevention attorney
If you’re facing foreclosure, you should have a consultation with a foreclosure defense attorney as soon as possible.
A foreclosure defense attorney will be able to evaluate what you have going on and build a plan for you that’s right for your particular situation.
If that’s not an option, below are some questions that will help you start to build a plan:
1. How much time do I have before a foreclosure auction date?
If you have plenty of time, you likely want to try a direct loss mitigation option with your lender first before going to a higher maintenance option like litigation or bankruptcy.
2. What is the general foreclosure timeline in my state?
Understanding if you live in a judicial foreclosure or non-judicial foreclosure state will help you understand how much time you have. Generally, non-judicial foreclosure states will have shorter timelines.
Read about Washington’s foreclosure timeline.
3. Are there any state-specific protection programs (like foreclosure mediation) that apply to my situation?
Some states have programs like foreclosure mediation that will stop the foreclosure and provide a protected process for you to speak with your lender.
4. Is my financial hardship resolved? Do I make enough money to resume a regular mortgage payment?
If you fell behind on payments due to a financial hardship that has ended and have enough funds to resume making mortgage payments, you may want to try and apply for a loan modification with your lender to resume regular payments without having to pay all your missed payments at once.
5. Do I have equity in my property or is my property underwater?
The answer to this question will help you determine whether a sale of the home would net you any funds. If you have equity in your home, you can sell your property and get your money out of the home. Then, you would transition to a more affordable living situation and avoid foreclosure in this way. If the home is underwater, you would want to look into short sale or deed in lieu options to get out of the property and avoid being liable on your deficiency balance.
6. What loss mitigation programs could I apply for with my lender?
Loss mitigation is a catch-all phrase for all the available programs your mortgage lender has for people who have fallen behind. Once you determine your timeline and whether you want to try and stay in the home or get out of the home, you will be able to determine what you should apply for.
9 ways a foreclosure prevention attorney can help you
1. Help you understand the government help programs that may assist you with foreclosure prevention
More than 90% of all mortgages are backed by Fannie Mae, Freddie Mac, FHA, VA or USDA.
If you have one of these investors on your loan and have fallen behind on your mortgage payments, there may be programs available to help you stop foreclosure.
2. Talk to you about your situation to determine whether the loan modification process can help you keep your home and stop foreclosure
A mortgage modification (or a loan modification) is one way to stop the foreclosure process and keep your home.
A foreclosure prevention attorney should be able to speak with you about your individual financial situation to help you know whether you stand a good shot at being approved for a loan modification.
They will also explain to you what the process looks like so you know what to expect.
Through a negotiation with your servicer, you get approved to resume making regular mortgage payments without having to pay everything you owe at once.
This agreement (the loan modification) stops the foreclosure process and gets you caught up on your mortgage.
3. Talk to you about other types of loss mitigation options that may help you stop foreclosure
If you’re not interested in keeping the home, there are other types of loss mitigation options (and foreclosure alternatives) to help you get out of the home. Options like short sales or deed lieu options may be available to you.
4. Help you understand how foreclosure laws may protect you
There are both federal and state laws that may be able to help you.
For homeowners in Washington State, you may be eligible for Foreclosure Mediation under the Foreclosure Fairness Act law. This is a government help program designed to stop foreclosure so you can communicate directly with your bank.
Alternatively, if you think your lender has done something wrong, you may want to consider filing a wrongful foreclosure lawsuit or a predatory lending lawsuit against your bank using the foreclosure litigation process.
There are also ways to use the civil litigation process to sue your bank under federal laws like RESPA, TILA, the FDCPA and the CFPB.
5. Help you understand how bankruptcy may be able to help you defend against foreclosure
Sometimes, you may need to stop your foreclosure process fast. Or, you may have other burdensome debt in addition to your mortgage that needs to be handled.
If you’ve run out of time to work with your lender or servicer or want to know about options to handle additional unsecured debt, you may need to consider bankruptcy to stop foreclosure.
A Chapter 7 and a Chapter 13 bankruptcy legally stops most foreclosure actions.
6. Help you understand whether you are facing a judicial foreclosure or a non-judicial foreclosure.
There are two types of foreclosure proceedings, judicial and non-judicial. Judicial foreclosures happen through the court system. Non-judicial foreclosures happen outside the court system through a series of foreclosure notices.
Based on what type of foreclosure process you’re facing, a lawyer will advise on whether you will have a deficiency judgment against you in the event your foreclosure moves forward.
Consulting with a lawyer will help you know what type of foreclosure you’re facing, what types of notices will be coming your way and what the process will look like from start to finish.
7. Help you understand the timeline of your foreclosure process and how much time you have
It is important to understand how much time you have before the foreclosure auction of your home. Depending on how far along you are in the foreclosure process, different options may be available to you. A foreclosure defense lawyer can help you understand which options you have time for and which you don’t.
8. Help you build a tailored plan for your particular situation
Because foreclosure has so many moving parts – an lawyer is most helpful because they can put all the pieces together to build you a specific plan that applies to you to help you stop foreclosure, taking into consideration:
- your financial situation
- your desired goals
- your lender’s programs
- your foreclosure timeline
With so many moving parts, a consultation can help you feel settled, informed and ready for action.
9. Most importantly, a foreclosure prevention attorney can actually represent you against your lender to help you resolve the issue and avoid foreclosure
A foreclosure defense lawyer will be able to:
- Stay in constant communication with your servicer
- Know when and how to escalate a problematic matter to management
- Track your foreclosure status and keep you updated on your timeline
- Negotiate agreements to keep the home, lower monthly payments and interest rates
- Negotiate agreements to vacate the home and avoid a deficiency balance (short sale negotiation)
- Serve as a distressed sale manager as you sell your home for equity to avoid foreclosure
- Negotiate settlements for any additional liens on Title (or pull payoffs from additional creditors if negotiations are not feasible)
- Handle the reinstatement process until your loan is brought current
- Request and review payoff quotes from your mortgage lender
- Communicate with your foreclosure Trustee about your sale date and any potential foreclosure postponements
- Represent you in state-specific help programs like Foreclosure Mediation
- Keep you advised of all available options, back-up options and timeline considerations as you move through your plan to avoid foreclosure
If you hire a foreclosure litigator to represent you, they will file suit against your bank and help you sue them.
If you hire a bankruptcy lawyer, they will be able to file your bankruptcy, stop your foreclosure, and help you navigate through the process until you reach your goals.
Does foreclosure prevention look the same for everybody?
No! Foreclosure prevention is very nuanced and does not look the same for everyone facing foreclosure.
Everyone’s situation is slightly different:
- Not everyone facing foreclosure should file bankruptcy as a their solution
- Not everyone facing foreclosure should apply for loss mitigation as their solution
- Not everyone facing foreclosure should sue their lender as their solution
- Not everyone facing foreclosure should sell their home
- Not everyone facing foreclosure should apply for a loan modification
- Not everyone facing foreclosure “just needs to refinance”
So many lawyers who claim to understand foreclosure defense just want you to do one thing (and it’s always the thing that they know how to do best).
The factors below need to be discussed and evaluated with respect to your individual situation:
- Your income
- Your foreclosure timeline
- Available state-specific foreclosure protection programs (like Foreclosure Mediation)
- Available federal foreclosure protection programs (like the HAF program)
- Your financial hardship
- Your short term goals
- Your long term goals
- Your health
Any lawyer who tries to slot you into a predetermined option does not truly understand what foreclosure defense is.
A good foreclosure prevention attorney will take into consideration the following things:
- your financial situation
- your desired goals
- your lender’s programs
- your foreclosure timeline
Using these factors, they should be able to build you a tailored plan that takes you all the way from your best case scenario to your worst case scenario so you are prepared for all possible outcomes.
The best foreclosure defense plan will combine different things with the lowest impact options being explored first.
The consequences of foreclosure can be devastating…
They often include an auction of your property followed by a short move-out timeframe. As soon as you are aware that you are facing foreclosure proceedings, you should get some help.
Mortgage relief options for Washington homeowners
Mortgage issues are complex. Banks and mortgage servicers can be very uncooperative. If you think you might need some help, don’t wait to reach out.
If you are in Washington State and looking for legal service or a foreclosure lawyer near you, please reach out to me at The Law Office of Nadia K. Kilburn: (425) 654-1674.