Foreclosure Defense: Hourly, Flat Fee, or Monthly Rate – Most foreclosure defense attorneys structure their fee agreements with homeowners in one of three ways:
• by charging the homeowner an hourly rate
• collecting a flat fee from the homeowner, or
• charging a monthly rate.
Foreclosure Lawyer – Hourly Rate
Some foreclosure defense attorneys charge an hourly rate for their services. The rate can range from around $100 per hour to several hundred dollars per hour. With this type of fee arrangement, the lawyer generally collects an initial retainer—an advance payment to the attorney before he or she starts to work on your case—of several thousand dollars. The retainer amount and hourly rate varies widely, depending on the attorney’s experience and the customary rates in the area. How an hourly rate works. Say you give your foreclosure defense attorney a $2,000 retainer. She charges $200 per hour. First, she reviews all of the documents in your case. Then, she prepares and files an answer and affirmative defenses to the foreclosure action. All of this takes five hours. The attorney also spends time preparing for and attending a foreclosure mediation with you. You’ll also get billed for the time it takes to make phone calls and emails related to your case. This too adds up to five hours. The retainer is now gone and the attorney hasn’t even attended any foreclosure hearings yet. Because the attorney must do more work, you’ll have to make further payments.
Pros and cons Working With a Foreclosure Lawyer
The benefit to this type of fee arrangement is you’ll only pay the attorney for the amount of time he or she actually works 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.
Foreclosure Lawyer Flat Fee
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 complexity of the case.
Pros and cons Lawyer
The benefit to paying a flat fee is that you know ahead of time exactly what the total cost of your foreclosure defense will be. 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—called a contingent fee—if the case is dismissed as a result of the firm’s efforts.
Pros and Cons of Monthly Payment Foreclosure Attorneys
What If I Can’t Afford to Hire a Foreclosure Lawyer?If you’re facing a foreclosure, but don’t have money available to hire a lawyer to work with you throughout the process, you might want to consider:
• dealing with the foreclosure on your own without an attorney
• paying for just one consultation with an attorney
• finding a pro bono (free) attorney, or
• Getting assistance from a free legal aid society or a foreclosure prevention clinic in your area.
How Much Will a Foreclosure Lawyer Charge?
Most foreclosure attorneys structure their fee agreements by charging an hourly rate, collecting a flat fee or charging a monthly rate. The amount you’ll pay in total could range from several hundred dollars to several thousand dollars. Exactly how much you’ll have to pay varies based on a number of factors, including the attorney’s level of experience and how much other attorneys in the area charge
Here are a few alternatives if you can’t afford to hire a lawyer to assist you throughout a foreclosure.
If you don’t want to fight the foreclosure, you can probably deal with it on your own. You should educate yourself about what steps are involved, how long a foreclosure typically takes in your state, and exactly when you’ll have to move out of your home. You can apply for a mortgage modification during foreclosure without an attorney. You probably don’t need an attorney to help you apply for a mortgage modification. A modification is a permanent change to the loan terms, such as an interest rate reduction, to make the monthly payments more affordable. To get the ball rolling, call your loan servicer and let it know you would like to apply for a modification. The servicer will tell you exactly what you need to do to submit an application. If you need help with the application, you can make an appointment to talk to a free HUD-approved housing counselor.
Lawyer to help you apply for a modification of your mortgage loan
If you apply for a modification, you might be able to work out an agreement that will allow you to keep the home. Even if you can’t work out a deal, applying for a modification will you buy you some time to stay in the home before the lender completes the foreclosure. Generally, under federal law (and some state laws), a foreclosure must stop while the servicer evaluates your application.
When you should consider hiring an attorney
You should seriously consider hiring a foreclosure attorney if you think you have a valid defense to the foreclosure, like the servicer didn’t follow the law or made a serious error with your account. In most cases, you’ll have to raise the defense in court, either by filing your own lawsuit (if the foreclosure is non judicial) or responding to the lender’s lawsuit (if the foreclosure is judicial), which can be complicated. This means that it is usually better to hire an attorney than to go it alone if you want to successfully save your home. You might want to schedule at least one consultation with a lawyer even if you can’t afford to hire an attorney to represent you through the entire process. A lawyer can tell you exactly how foreclosure works in your state and how much time the process will likely take.
Before going into the meeting, make sure you know how much time the attorney will spend with you, what he or she will help you with—for example, the lawyer may be willing to answer questions about foreclosure, but not about filing for bankruptcy—and how much the attorney charges for the consultation.
At the meeting, you might want to ask the lawyer to provide you with details about foreclosure procedures, to review the facts of your case, and determine whether you might have a defense to the foreclosure. The lawyer can also help you decide your next steps and explain your legal rights.
What Does a Foreclosure Defense Attorney Do for You?
Foreclosure cases are rarely set in stone. Hiring an experienced foreclosure defense attorney early in the case gives you the best chance of success. The last thing you want to do is battle for your home in court without knowing all your options. Here are a few immensely helpful things a foreclosure attorney can do for you.
Provide You with Options
A foreclosure defense attorney knows the legal landscape better than you. Their experience and judgment will save you time, help you avoid pitfalls, and maximize your chances of saving your home. Depending on your situation, your best course of action may be to avoid foreclosure via loss mitigation, modify your loan, file for Chapter 13 bankruptcy, or have your foreclosure attorney represent you in court outright. An experienced foreclosure attorney in Los Angeles can help you understand the pros and cons of each option.
Represent You at Settlement Conferences
If you live in a state that mandates settlement conferences, your attorney can attend them in your place and negotiate with the bank’s attorney to save your home. The conference is an opportunity for both parties to reach an alternate resolution that doesn’t involve foreclosure. Without an attorney, you’d have to contend with the bank’s attorney on your own time with limited knowledge.
Help You Get a Loan Modification
A loan modification adjusts the terms of your loan such that you can afford the payments. While modifying a loan is free, few homeowners can convince the bank to approve a modified loan without help from an attorney. The bank must review several key pieces of information about your income before making their decision. An experienced attorney can provide and present this information in the best light to help you get approved for a new loan you can afford.
Help You Pursue Loss Mitigation
Certain loans carry loss mitigation options that give you an opportunity to stay current on your payments. Some lenders may withhold this option from you, and without an attorney you would likely have no idea that you could pursue this route. An attorney will not only let you know if loss mitigation is available to you, but also help you choose between the many different ways you can approach this option.
Raise Defenses in Court
If the bank made mistakes in foreclosing your home, an attorney can identify them and fire back. For example, the lender may have breached your loan contract or violated state foreclosure laws, or the foreclosing party may not be the rightful owner of the mortgage debt. You may unknowingly be the victim of unfair lending practices or an unlawful mortgage assignment. There are dozens of strategies and tactics an experienced attorney can use to postpone foreclosure. And if the court accepts your attorney’s argument, you may receive the option of a settlement or even have your lawsuit dismissed entirely.
Help You File for Chapter 13 Bankruptcy
If all else fails, an attorney can help you file for Chapter 13 bankruptcy. If approved, you will have three to five years to get up to date on your payments and will be able to keep your home. Your home is an important not only for its financial value, but for the memories it holds. You don’t have to fight for it alone.
How Foreclosures Work: Judicial and Non judicial Processes
Depending on state law and the circumstances, the lender might foreclose through either a non judicial process (also known as a power of sale foreclosure) or a judicial foreclosure process. In a non judicial foreclosure, the lender follows specific out-of-court steps set out in the state statutes to foreclose. In a judicial foreclosure, the lender files a lawsuit against you in court. You’ll receive a complaint, along with a summons giving you a deadline to file a written answer to the suit. The deadline to respond is usually 20 or 30 days after you receive the paperwork. So, you’ll get the chance to file an answer in a judicial foreclosure, but not in a non judicial one. If you want to fight a nonjudicial foreclosure in court, you’ll have to start your own lawsuit.
What’s an Answer?
If you want to respond to the suit, an answer is the document that you file with the court and serve to the other parties in the case. Your answer tells the court your side of the story. In the answer, you must respond to the complaint’s allegations and you can ask that the lender prove its allegations, like how much it claims you owe under the loan documents. You should also raise any defenses—like the lender lacks standing to foreclose or that the foreclosure documents were robo signed—and counterclaims. Counterclaims are things you think your lender or servicer has done wrong.
Why You Might Want to File an Answer
Again, if you have a defense to the foreclosure or want to assert a counterclaim, you should file an answer to preserve your rights. You also might want to file an answer to get more time to work out a loss mitigation option, like a loan modification. Also, once you file an answer, you’re entitled to be kept informed of anything happening in your court case. If you file an answer, the lender can’t get a default judgment—an automatic win—against you. Depending on the strength of the answer, the lender might then file a motion for summary judgment. In a motion for summary judgment, the lender asks the court to rule in its favor without a trial or any further legal proceedings because there is no dispute as to the important facts of the case, your defense lacks merit, or you didn’t prove wrongdoing on the part of the lender. But if the court denies summary judgment, the case will proceed toward a trial.
What Happens If You Don’t File a Timely Answer
If you don’t file an answer by the deadline, the lender’s attorney will most likely ask for a default judgment. To get the court to set aside (annul) a default judgment, you’d have to file a motion and show good cause for not filing an answer. It’s very difficult to get a court to set aside a default judgment. In addition, if you don’t file an answer, you aren’t entitled to get notifications about what’s happening in your foreclosure case. The court may proceed with the foreclosure without your involvement or notifying you about the proceedings. You also will likely lose the right to assert any defenses you could have against the foreclosure. If you don’t include particular defenses or counterclaims in an answer, you might not be able to bring them up later on in the foreclosure. Of course, you shouldn’t file a frivolous answer, otherwise you might get stuck paying costs and expenses of the opposing parties, including their attorneys’ fees.
Free Consultation with Ascent Law – Foreclosure Lawyers
It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!
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