Hiring an attorney for a loan modification [a list of advantages]

Article by Hayley Harrison, Former Branch Manager and lending officer for a community bank

If you’re in danger of losing your home due to a foreclosure, you likely feel as if you’re at the mercy of your lender. Even if your lender offers you an alternative to foreclosure, such as a loan modification, it can be difficult to know how to proceed. An attorney can serve as a valuable partner during this confusing and frightening time by performing some beneficial roles.

Resource

Loan modification paperwork is complex and written in legal jargon, rather than friendly, easy-to-understand prose. If you sign a modification without fully understanding the terms, you put yourself at risk for paying high fees or agreeing to clauses that could cause you trouble down the road, such as when you are ready to sell your house. Attorneys understand this terminology, allowing them to interpret the complex concepts in the documentation into terms that you can understand.

Counselor

Attorneys vow to represent their clients’ best interests, meaning they provide unbiased views on legal matters. During the loan modification process, your attorney can advise you on whether or not a contract offered by a lender is fair. Unlike the loan officers at your lender, your attorney has nothing to gain from you agreeing to a modification, so you can trust their opinions on the matter.

Advocate

During the foreclosure process, your lender has the advantage of a team of attorneys to act on its behalf. Having your own attorney levels the playing field. Your attorney will understand your rights and has the knowledge of the law to argue more favorable modification terms for you.

Things to Consider

Although there are many advantages to hiring an attorney for a loan modification, you need to take a few important steps when selecting a lawyer. Keeping these simple guidelines in mind will help you through the process and ensure you hire a reputable individual.

· Check their credentials. Only hire an attorney that is a licensed member of the bar in your state. A “loan modification counselor” is not the same as an attorney. Some unscrupulous, for-profit firms offer loan modification counseling services that are ineffective and costly. These firms prey upon unsuspecting consumers who don’t understand the difference between a licensed attorney and an unlicensed counselor.

· Ask about experience. When talking to prospective attorneys, inquire about their previous experience with the loan modification process. Specifically, you should ask how many modifications they have assisted with, and if those cases ended in foreclosures regardless of their help. Some attorneys will even provide you with references, former clients who have agreed to vouch for them to prospective clients.

· Inquire about the cost. You’ll need to understand exactly how much the attorney’s services cost and when you will be expected to pay for them. Depending on your financial situation, you may qualify for pro bono or free legal services. Your state’s bar association’s official legal help line can help you determine your eligibility and locate attorneys who offer pro bono loan modification services in your area.