When Do You Need an Attorney?

By Andrew J Thompson

When a bank or your lender threaten you with foreclosure, it can get very uncomfortable in a hurry.  I’ve represented dozens of homeowners, borrowers and private lenders in mortgage protection and mortgage fraud cases, very few of whom have hired me in the early stages following a claimed default.  Usually, they don’t need to at this stage.  But that can change in a hurry and it can change with profound implications.

If you hire an attorney before you have the need for legal defense, you will expend badly needed financial resources trying to protect against claims that aren’t yet ripe.  But if you wait too long, the consequences can be dire.  In my experience, I have learned that I can help just about any homeowner if they come to me early enough.  But I have also had plenty of cases where it’s too late, or there just aren’t the resources at hand to defend the case in the way it needs defended. So how exactly does this play out, and what are the factors that dictate when an attorney can and should make a difference in your case?  Below is a summary of what is likely to happen at various stages of proceedings and how it is that an attorney should help, or alternatively may not or may not be able to help  under the circumstances.

DEFAULT/PRE-FORECLOSURE

Until the bank has indicated it intends to move ahead with foreclosure proceedings, you generally do not need an attorney working for you.  If you are considering a loan modification, or have applied for one, you know there is much paperwork involved, and hiring an attorney will usually do little for you except increase the cost of defending yourself.

There are exceptions, however.  If your claims against the lender are so clear that you have a suit to file against it (them), then you should hire an attorney sooner rather than later to pursue your rights, rather than sleeping on them until the bank establishes the upper hand against you.  Pre-emptive strikes can be very important in foreclosure litigation because the lender often takes advantage of the procedural tools (Trial Rules) at its disposal that enable it to move quickly and short circuit your rights of defense against foreclosure.  I have seen this happen to an unsuspecting homeowner many times over, so don’t let it happen to you.

NOTICE OF INTENT TO FORECLOSE

At this juncture, before a case is filed against you, but upon seeing a pre-foreclosure intent letter, it is wise at least to consult with an attorney to know your rights and help you decide on your own next steps, while wisely considering what to do more immediately.  Most typically I would say this is generally too early to hire counsel, and any earlier makes little sense except in the situation where you need to find an attorney to prosecute your own claims against the lender,

RECEIVING A SUMMONS

If things ever get to this point, it is time to hire counsel and to be as aggressive as you can defending your rights – whether as to ownership of the property, for a proper accounting of the loan, or otherwise.  The Summons means this is serious buisness.  You’ve been sued!  But chances are very high that if you use the special rules to your advantage.  You should not try to Answer a Complaint on your own, and you should not to begin staging a defense to the suit without the assistance  of counsel.

SETTLEMENT CONFERENCES/MEDIATION

In some ways the structure of a settlement conference lends itself to handling it without the aid of counsel, but the problem is the lender will take advantage of the rules if you don’t have someone on your side who knows what to look for.

POST-JUDGMENT PROCEEDINGS

Whether   it’s Default, Summary Judgment, or even a judgment at trial – in a foreclosure proceeding, the bank is going to want to  get the property sold and you out of the house – probably as soon as it can.  While it’s too late usually at this stage to make a difference, an effective attorney may still be able to employ a strategy that will buy considerable time in your favor.

All things considered, don’t delay.  There are so many good, viable defenses to a foreclosure action available to you, make use of them in the best way you can.  If you’d like the opinion of a seasoned experience mortgage defense attorney or may need actual representation, please call (317) 564-4976 to set an appointment speak with the author.

Protection from a Sheriff Sale

By Andrew J Thompson

The most important thing you can do to protect yourself from losing your home in a Sheriff Sale is to be pro-active in presenting your legal defense at every step of the foreclosure process.  If you have tried to work with your bank alone, however, without the help of an attorney, it’s likely you’ve fallen short of protecting yourself in the best way you can.

If you have an attorney, who defends your rights on every point of contention, it is unlikely a court will decide you have slept on your rights, or failed in your efforts to meet your obligations (if in fact you have tried to meet them), and allow a Sheriff Sale to proceed.  On the other hand, if you wait until a Sheriff Sale has occurred or is about to, before having an attorney do anything on your behalf, the court is very likely to conclude you have had plenty of opportunity, and never shown the court you truly would do what you could to keep your home.

If you have fallen behind on a mortgage, there are things an attorney can do for you at each stage of the process:

  1. BEFORE A FORECLOSURE ACTION IS FILED: It’s wise to engage an attorney as soon as you reach a point where you cannot deal with the bank and get a sound resolution to your problem.  This usually occurs the first time you have trouble applying for a loan modification.  The banks are not good at explaining why there is a hang up in the process, and you may have some options or defenses to their claims against you for an arrearage, that can only be adequately presented if you start when they arise.
  2. AFTER RECEIVING A SUMMONS: Within 20 days after receiving a Summons, you should consult with and engage a lawyer.  This is the point at which the attorney can typically do the most to help you.  Why?  It is the one opportunity you have to deny the bank’s allegations.  But more important even than that are two critical steps in the process you can only engage within 20-60 days of receiving the summons: 1) the opportunity to file a counterclaim against the bank for what it may have done wrong, and 2) scheduling a settlement conference to seek a foreclosure prevention agreement.
  3. UPON A MOTION FOR SUMMARY JUDGMENT BY THE BANK: If the bank seeks summary judgment, and it usually does at some point, it is trying to avoid the expense and risk of going to trial by getting the judge to rule in its favor on the paper filed with the court, rather than evidence that could be presented at trial.  A skilled attorney can help you avoid summary judgment by pointing out factual issues that need to be addressed before the bank’s claim warrants a judgment in its favor.  If you prevail at this juncture, there is a very good chance the bank will never take a judgment against you and you will have the opportunity to negotiate a settlement that will work for you. (You may have to tender payments to the court to show good faith on your part in the meantime, however.)
  4. AFTER FORECLOSURE OR DEFAULT JUDGMENT IS TAKEN: This is a point when fast action is critical.  If you get something done before a Sheriff Sale is scheduled, you may never face that prospect.  But your options have been narrowed considerably by now and you have to think much more tactically with your attorney’s help.
  5. ONCE A SHERIFF SALE IS SCHEDULED: Like the preceding step, but much more obviously, this is a point when you need to act.  Your attorney needs to leverage his ability to slow down or “stay” the process and get the bank to consider a settlement that doesn’t end up in it taking back a property it probably doesn’t want.
  6. POST SALE, BUT BEFORE AN EVICTION: Even at this late stage, we have seen homeowners keep their homes indefinitely by showing some good faith and using their attorney to plead their case before the court.  You can save your home at any point in the process, but it gets tougher with each marker the bank passes on the road to taking possession of your home.

Take advantage of the resources you have.  Your attorney can be the best help you find in the process of avoiding the loss of your home through foreclosure.

Andrew J Thompson is an attorney with 22 years experience in business, family and real estate law, practicing in Indianapolis, IN.  You may reach his firm, the Thompson Law Office, by calling (317) 564-4976 to schedule a free consultation.