Property owners who contact us because they are threatened by foreclosure often ask about the cost of our services. This is a perfectly reasonable question. The question that is almost never asked is what is the cost of not retaining attorney. Below is one of many examples of how being represented by an attorney can very substantially, both economically and emotionally, benefit someone against whom a foreclosure complaint has been filed.
We were recently consulted by a woman who was the trustee of the estate of her mother. She and her siblings had inherited her mother’s home in which she was living at the time a foreclosure complaint was filed by the lender who held the mortgage on the home. When she was served with the foreclosure complaint, she did not consult an attorney. Instead she relied on ‘advice’ from a local realtor and a series of employees of the mortgage lender. She contacted our office only after the ‘advice’ she received resulted in her being locked out of her mother’s home.
I am going to call her Ms. Smith – this is not her real name – for purposes of identification. Ms Smith was living with her mother at the time of her mother’s death and was unable to pay the mortgage on the property because Ms. Smith’s only had modest earnings. As a result, the lender who held the mortgage filed a foreclosure complaint. There then followed a number of discussions with the representatives of the mortgage servicer who persuaded Ms. Smith that she was required to promptly move out. Ms. Smith then consulted a realtor who advised her to do a short sale. Fearing that unless she moved out, she would become responsible for the delinquent mortgage payments of her mother, Ms. Smith rented an apartment and moved. Several weeks after moving, she went back to her mother’s home to retrieve some personal property and found the door padlocked.
Below is an example of the agreement signed by borrowers who obtain a loan to purchase a home and which gives the lender the right to protect their security interest in the home if the property owner fails to do so.
“ Protection of Lender’s Interest in the Property and Rights Under this Security Instrument. If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument … or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender’s interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value of the Property, and securing and/or repairing the Property. … Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace or board up doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off.”
The foreclosure proceeding against Ms. Smith’s mother which began over two years ago were substantially delayed because of problems the lender’s foreclosure attorneys experienced providing the necessary proofs to the Court, and it may be many more months before the foreclosure is completed. The home which Ms. Smith was persuaded to leave remains vacant. Ms. Smith who could have continued to reside in the home has been struggling to pay the rent of the apartment she rented.
Ms. Smith was understandably confused and anxious when the foreclosure proceeding against her mother’s home began and was lead to believe she was required to promptly leave the home. In her case the cost of not consulting an attorney was the thousands of dollars she had paid for the rental of an apartment and the anxiety she has experienced.