Do I Need an Attorney to Stop a Foreclosure?
A home is one of your biggest financial assets, but it can also turn into a debt that you can't afford to pay back. If your mortgage debt is overwhelming and you miss payments, your lender will eventually choose to foreclose in an attempt to take back the property and sell it to recover some of its money. You can avoid foreclosure, or at least delay it, in a number of ways, most of which don't require you to hire an attorney.
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Foreclosure Prevention Counseling
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One reason that you shouldn't need an attorney to stop a foreclosure is the existence of foreclosure prevention counselors. These professionals work for nonprofit agencies that are funded by the federal government's Department of Housing and Urban Development. They help homeowners avoid foreclosure with free advice and counseling that eliminates the need for an attorney and helps homeowners learn about their options and the best course going forward. Foreclosure prevention counseling agencies operate locally, and the Department of Housing and Urban Development offers a complete list of them on its website.
Options
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You can choose one of several routes to avoid foreclosure on your own or with the assistance of your foreclosure prevention counselor. One option is contacting your lender to discuss a mortgage modification that can result in a more affordable payment. Another option is refinancing, which will be very similar to shopping for your first mortgage in that you'll compare loan offers from different lenders or by using a broker and then use the new loan to pay off your existing one. You can also take advantage of government foreclosure avoidance programs, such as the Making Home Affordable Program's refinancing options, if you qualify based on the source of your loan and the likelihood of foreclosure.
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Fraud
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In some cases, seeking a lawyer to help you avoid foreclosure can harm your financial situation. This is the case if you fall victim to a refinancing or mortgage modification scam. Some lawyers advertise on television or online that they can offer a guarantee that you won't face foreclosure. Others offer wild claims about reducing your mortgage debt. In each case, the attorney is making an unrealistic promise to incite your emotions. High fees and a lack of any real action often accompany such claims, leaving you with the same likelihood of foreclosure but even less money to put toward your mortgage bills.
Chapter 13 Bankruptcy
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The one foreclosure avoidance technique that will most likely require an attorney is filing for Chapter 13 bankruptcy. When you file for Chapter 13 you force lenders, including a mortgage lender, to stop pursuing any form of legal action or collections against you. It will be up to the court to determine how you'll pay off your mortgage debt and keep your home, but the entire process relies on complicated financial forms and legal steps that a bankruptcy attorney can help you work through.
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