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Why Lawyers Say What They Say

Real Estate Agent with eXp Realty 7922

August 19, 2009 07:38 AM

For the past 3 years I have been working with a client base that, more than normal, consults with their lawyers regarding the issues surrounding their real estate transactions. I am speaking, of course, of distressed homeowners who are facing foreclosure. As a Certified Short Sale Specialist in King County my clients face a myriad of legal issues surrounding their real estate that most homeowners don't have to consider.

Issues such as the following:

How is foreclosure going to affect me legally?

Will I have to pay back any money that the lender is not able to recover from a short sale or foreclosure?

Should I declare bankruptcy?

What should I do if the lender files a lawsuit against me?

I recommend all of my clients seek legal advice from their attorney. The results from different attorneys are definitely mixed. Some attorneys support the clients efforts to sell the property prior to the lender foreclosing. Others tell their clients just to let the property go back to the bank, or to an investor, at the trustee's sale.

I find the variety of responses from my clients and prospective clients perplexing. Why such a wide range of responses? Considering the benefits of short selling and the lack of cost to the client why would you not short sell? Consider the benefits:

1. Short Sales will gain you 2-3 more months in the house payment free. This gives you time to save up for the eventual move.

2. Short sales are less damaging to your credit. Short Sale Credit Issues

3. You can recover from a short sale and be ready to buy a house again in 2 years, if you chose to.

4. It costs you nothing.

Still, about 50% of the time I get that answer form the client "my attorney said just let it go to foreclosure.". When discussing the subject with various individuals you get responses like "there's nothing in it for them so they just say let it go", or "there's no difference between a short sale and foreclosure so why bother". Personally I think they have good reason for their recommendations and would like to hear from some attorneys what their thought process is on the matter.

Ken Crotts, Certified Short Sale Specialist

Windermere Real Estate 206-999-7998

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Michael Kaminski

Ken,

Let me posit that if attorneys could earn real estate commissions and thought they could sell the property the response would be quite a bit different. There are a lot of different legal specialists whose area of expertise definitely clouds their context. The short sale arena is quite complicated and unless a lawyer is involved either prosecuting or defending foreclosures I doubt they would be up to speed. Interestingly enough, there are at least 350 lawyers who have volunteered to assist homeowners in defending foreclosures to the Washington State Bar Association (www.wsba.org) definitely advocates a pro active position. We at CSSS are in the process of converting our current class into a module for Washington Continuing legal Education (CLE) credit in an effort to acquaint attorneys with the myriad of legal ramifications resulting from recent legislation both state and federal.

Michael S. Kaminski, Attorney at Law

Aug 19, 2009 12:24 PM

Ken Crotts

eXp Realty - Maple Valley, WA

Combining Experience and Innovation

This comment gives the answer:

There are a lot of different legal specialists whose area of expertise definitely clouds their context. The short sale arena is quite complicated and unless a lawyer is involved either prosecuting or defending foreclosures I doubt they would be up to speed.

The law is very specialized these days. If you came to me and asked what provision I should include in a trust document, or a complex will, I would probably give you a blank stare. There are enough cases, statutes, regulations, civl rules and evidentiary rules that apply just to the vary narrow sliver of law that I practice to keep me plenty busy. I, for one, don't get around to learning the nuances of other areas. Its the same for other lawyers as well. I think the days of the generalist who really knows his stuff for pretty much whatever walks in his door are over. There was a time, a century ago, when all of the law books fit on a book shelf. When I graduated, my school's law library had over 500,000 volumes related to law.

So i think thats why you get differing opinions.

By the way, good post.

Timothy A. Bearb

Attorney

Law Offices of Michael T. Watkins

1100 Dexter Avenue N.

Seattle, WA 98109

206.400.6640

206.971.5080 fax

This comment was pasted from an email response to the question

Aug 20, 2009 04:55 AM

John M. Casey

Ken, I have been practicing real estate law for almost 15 years and have never told a client to "just let it go" to foreclosure or "there is no difference to you between a short sale and a foreclosure." I have always advised to try all avenues, especially listing the property for sale and attempting a short sale, before foreclosure. I suppose there may be a few fact scenarios where just "letting it go to foreclosure" makes sense, but I cannot think of any of them offhand.

John Casey

Attorney at Law

Kent, WA

Aug 20, 2009 05:34 AM

Why Lawyers Say What They Say

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