Image by james.thompson via FlickrThe intent of the law is good. We have seen or heard cases where lawyers promised that they will get a loan modification for clients. They receive hefty fees upfront, then nothing happens. Some lawyers simply vanished, others refused to take phone calls. It makes you wonder if the file was even worked. The end result is that the bank proceeded with the foreclosure and the homeowner had to move. Refunds in these instances were unheard of.
What the lawmakers didn't realize is that the good guys, those lawyers that would go the extra mile for a client were put in the same bag as the bad guys. The good lawyers can not take money and put it in a trust account. They like all lawyers have to wait until the modification is completed to get their fees. This could be as long as one year. If the bank doesn't negotiate, and the homeowner files for bankruptcy protection, the lawyer doesn't get paid for all his work.
Many experts say that the homeowners can do the loan modifications by themselves. Some can. But the majority of borrowers find the banks too powerful and the process is very time consuming. It requires constant telephone calls, hundreds of emails and letters, not to mention faxing and re-faxing documents that were lost by the lenders. If a homeowner is working full time, where does he get the time to do all this.
The system seems to be failing these homeowners. They do need legal representation. Considering all the debates about robosigning and the mortgage mess, what are homeowners to think? Are they getting a fair deal? To find the answer they need to hire a lawyer. The banks aren't going to tell them anything.
In many states foreclosure is handled by the courts. But in California it is generally between the bank and the homeowner. Without a lawyer the homeowner is at a disadvantage. This plays into the hands of the banks. Someone said "it's like taking candy from a baby".
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