Foreclosure Litigation Guide

The Cost of Mortgage Foreclosure Litigation

Foreclosure litigation is a legal brier patch that can lead to the loss of your home, even if you prevail in court. Here’s the reason: the lawyer that you hire may end up being so expensive that you lose your home when paying your fees.

Here’s how it works. Lawyers bill hundreds of dollars per hour, and they break their activities down in quarter-hour billing increments. So a lawyer can actually call and leave several voice mails and even type an email or two in fifteen minutes, but each activity gets its own quarter-hour billing. This means that the lawyer can make more than an hour’s worth of fees in just a quarter of that time. If your lawyer charges $300 an hour, calling for a quick chat costs you $75. For him to call and talk to opposing counsel, even if he just leaves a message, is at least $75. This is how attorneys eat through retainers and end up asking you for more money, even if your case hasn’t made any movement.

Resolving Foreclosure Litigations Cases

Resolving foreclosure litigation cases is tricky and often takes months or even years to resolve. Even if you end up beating the bank’s lawyers, you are unlikely to have court costs or legal fees awarded to you, so you can end up with fees running in six figures. If you agree to take out a mortgage against your home in order to help pay the fees, and you default on that note to your lawyer, he can end up foreclosing, which is an ironic ending when you hired the attorney to help you save your house.

The Foreclosure Litigation Process

When discussing Foreclosure and Litigation, consider the case of Dale Fotsch. Her common law husband sued her over property, and she ended up winning. The court even ordered him to pay costs. However, after the case had been going for several years, Fotsch fell behind on her fees, and her lawyer insisted on her allowing him to take out a note on the house for $100,000 with interest at a whopping 18 percent. When she fell behind on this note, he sued to foreclose on the house. Her common-law husband had a $90,000 judgement against him on her case, but he filed for bankruptcy and declared himself unable to pay her. She was still stuck with her lawyer’s bills, and the loss of her home is imminent. Her debt is growing by $88 per day because of the outstanding interest and principal.

Is this a situation involving unethical lawyers? It’s true that they provide a valuable service. However, many lawyers will work to draw cases out longer in order to have more fees come in. Some foreclosure cases end up racking up more than $25,000 in fees over the course of a year.

Are you in trouble with your mortgage? Is foreclosure litigation on your horizon? If you have built up some positive equity, there is no reason to get dragged into court. Amansad Financial Services Inc. has relationships with lenders who are willing to provide short-term financing solutions that help you get yourself back up on your feet, so that you can get back on track with your mortgage.

Is all of this seeming too horrible to be true? There is no provision in the code of ethics for lawyers keeping them from lending money to a client. However, the purpose of that loan cannot involve giving the attorney a particular interest in the legal matter or alter the judgement of that lawyer. If you sign a mortgage agreement with your lawyer, you are likely to end up paying interest that is between six and ten times the rate you could receive from a traditional lender. While this might seem like the only option when matters are grim, if you take a more proactive approach with your loan (or other legal issues), you can save yourself this headache.

Amansad Financial Services Inc. has helped many people in a situation where legal costs, either for a foreclosure case or other legal action in which the fees end up threatening to take their home. We have a network of private lending sources who can take the heat off you for a short time while you get your financial situation back together. Give one of our professionals a call today to get help with your individual situation.

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