Facing foreclosure is a stressful life event, and during stressful times its easy to quickly reach out to the first offers of help. However, unscrupulous companies, and yes some law firms, take advantage of people who are desperate to save their homes.
In the past few years, I've been contact by numerous people who have state they were deceived by various companies/firms and paid them a significant amount of money, only to realize they barely helped them. Many of these offers of help are received by homeowners through mailed solicitation letters, or internet advertisements which, despite not knowing each particular each homeowners circumstances, promise to save their home(s). Any of these advertisements should be viewed with skepticism.
No one can promise to save your home, without having a lot of information about your particular case, such as:
1. the reason you haven't been paying your mortgage;
2. .your financial status, health, income;
3. whether you're eligible for a loan modification, short sale, deed in lieu or other type of resolution;
4. whether the mortgage company did anything illegal;
5. whether you're eligible to file bankruptcy, if necessary, and whether you're financially able to comply with a repayment plan through bankruptcy;
6. whether you're upside down in your mortgage (that your mortgage is more than your house is worth);
7. numerous other considerations.
The typical scam committed by these companies/firms is to have you pay a retainer to "save your house" - sometimes as much as $2,500.00 to $5,000.00 or more - without specifically saying what they're going to do on your behalf for that retainer. Then, they have you complete loan modification forms and send them back to them, which they then submit to your mortgage company on your behalf. These are the same forms that you can submit yourself, are usually provided by your mortgage company and which you are notified about in the foreclosure documents. They generally don't revise or modify the forms and simply send them, like you could do your own, without paying anyone a retainer.
They also, generally, do not file and Answer to the foreclosure Complaint to allege any defenses you may have against the mortgage company, and are they simply hoping the mortgage company will approve your loan modification. However, without an Answer filed, the foreclosure essentially continues and, if your mortgage company does not approve your loan modification, you may be too late to file an Answer, thereby allowing the mortgage company to apply for a default judgment and proceed with the foreclosure and eventual sheriff sale of your property. The next thing you know, you receive a notice that your modification, or attempt to refinance through another company, was not approved and a sheriff sale is scheduled. You panic and call the company that's supposedly helping you. Since no Answer and other legal measures were taken on your behalf, the company simply tells you to file for bankruptcy. But what if you're not eligible for bankruptcy, or are not financially fit enough to be approved for a repayment plan through bankruptcy? If you can't be approved for a bankruptcy, all filing does is delay the sale for a short period of time, similar to when they tell you to you can request two postponement of the sheriff's sale. Nether saves your house, or solves the problem, and you need to start packing your bags. In the meantime, you've paid a company a significant retainer and paid a bankruptcy attorney to simply delay. This is money which could have been put to better use, to either pay toward your mortgage if you can modify, refinance, or put in a bankruptcy plan, or towards rent for your new home.
So what do you do if you're facing foreclosure and need help? 1. do your research on anyone you're considering to hire;
2. get a detailed game plan from anyone you plan on hiring before you hire them, and get it in writing;
3. if all they're going to do is submit you're forms for a loan modification, consider getting some one else, since you can do that on your own;
4. there are numerous State and Federal statutes that apply to mortgages and foreclosures that can provide defenses to the foreclosure, or make the mortgage company concerned and more likely to settle and/or approve a modification. Ask anyone you're considering hiring to explain these laws to you, and how they may use them to your advantage. If they cant, move on to someone else.
5. If they don't ask you a lot of financial questions, more than those required for the loan modifications forms, then they aren't considering other options for you.
6. Options such as loan modification, refinance, bankruptcy, short sale, deed in lieu, or simply sale of the property should be considered, depending on your answers to various questions. Every option should be reviewed in the beginning, before a game plan is created, by considering whether ts likely you;l be approved for a loan modification or refinance, or if you should place your home on the market to sell it, or possibly be approved for a short sale or deed in lieu. Or do your circumstances indicate you shouldn't waste your time and money with the company and should just file bankruptcy.
These are some of the issues that should be discussed with whomever you may consider hiring to help you. If they aren't answering these questions, and others, and providing you with a clear game plan and backup plan, get someone else. Don;t be scammed!
All the Best!
RANDY C. REDDEN