A brief guide to mortgage attorneys
Often, people purchasing property such as a house or apartment do not have the finances to pay all at once. Some choose to enter into mortgage agreements to get the funds to complete the purchase. A mortgage attorney can help you review any paperwork before you sign and advise you if you encounter difficulty meeting your financial obligations. Before you commit to a mortgage, you here are some things to consider.
How mortgages work
If you are unable to pay all at once when buying property, you may qualify for a mortgage, which you can obtain from a broker. Often this mortgage broker will work for a bank. Essentially, what you purchase becomes your collateral: you pay off your mortgage while your property acts as a guarantee of payment. If you fail to repay your loan, your property may be confiscated.
Mortgage attorneys can help you either prevent or respond to lawsuits. Before signing any document, you need to make sure that you have the resources not to fall behind on your payments. A mortgage attorney can review paperwork to make sure you understand exactly what you’re committing to and make sure you can afford it. This kind of preventive litigation can help you avoid future problems.
When shopping for a mortgage, you have many rights as a consumer: for example, you can demand a good faith estimate of how much entering into this agreement will cost. There is a possibility that you have entered in an invalid agreement if you have been deceived or not informed about:
• The total cost of your mortgage, including potential interest rate changes
• Any fees your mortgage broker is receiving from the lender
• Explanations for any fee or procedure you don’t understand
By using mortgage attorneys to review all of your paperwork, you will make sure you are signing a document establishing honest charges you can afford to pay.
Foreclosure
There are many reasons you may be unable to keep up with your payments. You may lose your job, face unexpected expenses or see the interest rate of your loan rise to unaffordable levels. If you fall behind on your mortgage payments or are unable to complete them, you risk losing your property during the foreclosure process. When your lender attempts to reclaim their property, you may end up defending yourself in state court.
A mortgage attorney can help you avoid a court date. Some solutions they may propose include:
• If you have not fallen too far behind, a mortgage attorney may be able to negotiate a forbearance agreement. In this case, your lender will agree to wait a specified amount of time for you to find the funds to resume payment.
• Refinancing your debt. If you and your lender can agree on a new payment plan, you may be able to take more time to pay off your debt or pay at a lower interest rate.
• Selling your property to cover as much of your mortgage debt as possible. This “short sale” process will prevent your lender from pursuing you for further payment and helps avoid lengthy litigation. However, lenders may be reluctant to settle for less than what they’re owed if they think you are capable of paying.
• Filing for bankruptcy. While this prevents creditors from hounding you for money you don’t have, this is a complicated process with many variables to consider.
If your mortgage attorney is able to reach some agreement with your lender, you can avoid going to court. However, you may have to proceed to the trial stage.
Defaulting on a mortgage
Many homeowners incorrectly assume that if they cannot pay, they can simply stop payment, abandon their property and not face a lawsuit from their lender. Additionally, in most states aside from California, if your lender sells the reclaimed property for less money than you owe, you may be liable for the difference. Before recommending default, a mortgage lawyer should pursue every possible settlement option.
Trial options
In some cases, mortgage lawyers may be able to prove you were taken advantage of when signing any agreement. If your mortgage broker was dishonest about what you were buying by omission or commission, these procedural errors can help you in court.
Finding a mortgage attorney
Ideally, you will have legal counsel before entering into any business agreement you do not understand. However, not all people will be able to afford a mortgage attorney to advise them when they apply for this loan. Hiring a lawyer is an additional expense that can add up quickly. Before talking with any mortgage attorneys, review the state of your personal finances and figure out what you can afford.
If you decide to get private legal help, fear you may fall behind on your payments or find yourself facing foreclosure, act fast. Mortgage attorneys may be able to help you negotiate a settlement before the foreclosure process starts. However, you need to find a lawyer experienced in this field. The most trustworthy recommendations come from relatives and friends. A local or state bar association can provide a referral to a specialist for a minor fee. Online, examine the disciplinary records of any lawyer you have been referred to.
Before meeting with any mortgage attorneys for the first time, prepare any financial documentation you have that will be relevant to your case, such as tax returns, bank statements and paychecks. You must be honest about the state of your fiscal health before a lawyer can form a trustworthy opinion of your options.
Interview as many mortgage attorneys as you see fit until you find one whose answers are satisfactory. Some lawyers may use sensationalist language or make promises that seem impossible to keep. Do not be swayed by such hyperbole: trust your judgment. The more detailed the advice and cost estimates you receive, the better an idea you will have of what to expect.
