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Understanding the legal fees and costs to hire an attorney helps you decide whether to enlist one to help fight your foreclosure.
Attorneys charge different fees for different types of services, using varying rates and pay structures. Beyond the attorney's hourly or flat rates, though, there are other costs to hiring a lawyer to represent you.
Why Foreclosure Attorney Rates Vary
Three main factors determine the full cost of hiring a foreclosure attorney. These are the attorney's fees, the costs of your case, and the type of foreclosure. Attorney's fees vary widely, depending on where you live and whether the lawyer you hire works in a large firm or a small practice. Larger urban areas and large law firms both tend to equal higher rates. In addition, the lender may include charges for its own attorneys as part of the foreclosure fees. This may be the entire amount or only a percentage of it.
Costs in a foreclosure case include your attorney's costs, as well as those related to the foreclosure itself. This includes property inspections, filing fees, administrative fees such as notice and certified mailings, and corporate advances.
The type of foreclosure plays a role, and includes how long ago the loan went into default, as well as whether the homeowner intends to surrender the property or fight the process.
Why Hire a Foreclosure Attorney?
When they choose to not hire an attorney, most people base that decision on the price of legal representation. There are, however, advantages in hiring a lawyer to fight your foreclosure.
The most obvious advantage is that the lender has a legal team. Without your own attorney, this makes for a one-sided battle. Beyond that, though, a foreclosure attorney provides a variety of services, depending on your needs. This may include:
- Arranging a repayment schedule
- Attending hearings with you to argue your side with the mediator and/or judge
- Delaying the process by filing motions, giving you more time
- Negotiating to bring the loan out of default
- Responding to the lender's filing
- Reworking loan terms or negotiating a second loan The Foreclosure Lawyer Fee Structure
Foreclosure attorneys use three main fee structures: hourly, flat rate, and monthly rate. In addition, you are responsible for the legal costs of working your case.
How Much is the Hourly Fee?
Hourly attorney rates vary by location and firm size, and range from around $100 per hour to $400 per hour in large urban areas or for large firms.
With an hourly rate, the attorney typically charges a retainer the equivalent of payment for X number of hours of his or her time. For example, 10 hours of work at $200 per hour requires a retainer of $2,000.
Most hourly attorneys bill in increments, but even this has no standard. It may be six-minute increments or up to 20-minute increments. The attorney tracks time spent working on your behalf and deducts payment from the retainer. Upon deletion of the funds, the attorney begins billing you for time worked. This may be another chunk of billable hours, or a monthly accounting of hours worked and payment due.
How Much is the Flat Fee?
Flat fees also vary depending on location and firm size, as well as by the complexity of your case. Expect to pay between $1,500 and $4,000.
Some attorneys who charge a flat fee request full payment up front, whereas others request a percentage and then charge you monthly installments. Unlike an hourly fee structure, with flat fees, you know exactly what the cost is.
How Much is the Monthly Fee?
This is similar to the flat fee, with the attorney charging an upfront retainer, and then a set monthly fee for each month that the foreclosure remains pending. They may also include a contingent fee in the event the court dismisses your case due to the attorney's actions.
How Much are Foreclosure Legal Costs?
Most attorneys bill their clients for legal costs, which are not included in their rates. This includes administrative costs, court costs, and travel expenses. During your initial consultation, ask the attorney what you can expect in legal costs.
When the housing market went bust, the foreclosure attorney market boomed. Unfortunately, some attorneys took advantage of this change in circumstances. Carefully review all of the fees and costs a foreclosure attorney charges before signing any agreements.