If your lawyer has enough time to do so, he or she may be able to work with your bank to avoid the foreclosure process. There are a few different ways your lawyer can accomplish that outside of the court room.
Loan modification: A loan modification is a written agreement between the lender and the borrower that changes some of the terms of the original loan. An attorney can help you with the loan modification process. In California, you will not owe any attorney fees until the modification is completed. A loan modification might lower the interest rate of the loan, or extend the amortization term. Your attorney will review the terms and conditions of any modification that the lender may offer to you, and they will analyze the documents to ensure there are no illegal charges worked into the final balance, and that the loan modification is in your best financial interest.
Educate you on your loss mitigation options: Some loans have special types of programs called “loss mitigation options.” These programs might allow you to bring your current loan balance in good standing and get you caught up on the payments. While your lender may choose not to share all of the options that are possibly available to you, your attorney will be sure to explore every option that is in your best interest.
Make sure that your lender is “playing fair:” While there are strict federal and state laws that lenders must abide by when dealing with the processing of loan modification applications, it is no doubt that these lenders do not always follow all of the rules. An experienced and knowledgeable attorney will be able to determine if your lender is violating any pertinent laws, and will advocate and fight for your rights if a violation has occurred.
Defend you during your foreclosure mediation: A foreclosure mediation is when a homeowner and a lender get together to attempt to work out some alternative solution in order to avoid foreclosure. Your attorney will attend this mediation with you and represent you during negotiation. He or she will ensure that you are being treated fairly by your bank or lender.
File a Chapter 13 Bankruptcy: If your lender will not work with you to file a loan modification or if you do not have the funds to pay an attorney through the loan modification process, filing a Chapter 13 bankruptcy may be a solution for you. If you qualify for a Chapter 13, you will be able to keep your home. Your attorney will work with you to determine if such action is a good solution for your situation, and then will help you file accordingly.