When working with homeowners in distress, they often ask if they should hire an attorney. The situations usually have a lot of moving parts that make it hard to navigate to a solution. Friends have opinions, Realtors have opinions, Google has plenty of opinions, yet we crave that opinion from an attorney!
We want the silver bullet answer! The one from a guy in a suit who charges a few hundred bucks to talk. Well, attorneys can be great and they can be bad. Just like every other profession out there, not all attorneys are created equal. Sometimes you get what you pay for. Sometimes you just get ripped off. Sometime, you don’t even need an attorney at all.
Since the unfortunate answer to the question in the title is “It depends”, I’d just like to share a few experiences with you:
We worked with a homeowner on her house that was going to foreclosure. She still owned her house after a bankruptcy years ago. There were A BUNCH of liens against the house, so she felt hopeless and let the house sit.
By the time she met with us to discuss selling the house, the foreclosure auction was set for the next business day! We contacted an attorney for her, negotiated the liens on our own, and STOPED the foreclosure. We bought the house and saved her record. Attorney needed due to the last minute constraint.
We helped another homeowner whose house was in foreclosure. The house became vacant due to the tenants knowing about the foreclosure. The amount owed on the mortgage became too high to sell on the market without remodeling. The homeowner didn’t contact an attorney, but he contacted us while he owed about $9,500 to stop the foreclosure. We paid the $9,500 off for him and took over the house eliminating his problems. In this situation, an attorney was not needed.
A different homeowner contacted us about his home in foreclosure. We learned that he hired an attorney over a year ago and was advised to stop making payments on the mortgage. When I asked him why, he said the attorney was working on a mortgage modification… Well modifications don’t take a year.
When I asked him what the attorney was charging him, he said “$2,000 up front and $600/month ever since!”
At this point, the house was unsalvageable. The amount owed was too high (mainly due to attorney fees on the bank’s side), the payments were too high, and the amount to catch up the loan was too high (because it hadn’t been paid in over a year).
Now, the bank will not modify his mortgage because he lost his job around 8 months after he hired the attorney. In this situation, the homeowner likely could’ve modified his mortgage or sold his house without the use of an attorney in just a couple months.
Attorneys can be very useful and are sometimes necessary. In the situations we have seen however, they are usually not needed if homeowners take action quickly. Even so, if you take action quickly, but hire the wrong attorney (one that wants you to pay $2,000 up front and $600/month), the results could be devastating.
My advice is to always act quickly when you start having trouble with your house. In addition, work with good honest people. Legal services are expensive, but know when to walk away from over-priced crooks.