When a lender seeks to foreclose a number of fees can arise. There will be, for example, a foreclosure fee paid to an attorney. If the property is auctioned off then the local sheriff or court will want a fee. There are typically an assortment of fees to be paid just to get the matter into court, something required when judicial foreclosures are necessary.
In each step there are fees and more fees, and the fees can be steep. In some cases there are state guidelines outlining the maximum legal fee. While an attorney might take less, what’s the incentive to do so?
Also, notice that the same legal fee to fill out the same form may apply regardless of the amount owed. In effect, fees can be seen as regressive costs that hurt small borrowers more than those who have big loans.
What kind of fees might you see? The answer depends on the jurisdiction where you live and the type of foreclosure — judicial or non-judicial — that you face. Examples include overnight delivery fees well above what a delivery service might charge, monthly inspection fees to check the property, processing fees, valuation fees to check the market price of the home, legal fees above actual lender costs, court costs, and payoff statement fees (demand fees). In total, the fees can amount to thousands of dollars,
Can you get rid of the lender’s foreclosure fees?
In some cases, if you have an attorney or legal clinic, it may be possible to have them reduced or eliminated as part of an overall settlement with the lender.
Alternatively, if you can engage in a deed in lieu of foreclosure then there’s no foreclosure, thus there are no foreclosure fees in the usual sense. It’s not a great option, but then the alternative is a foreclosure and that’s not a happy event in the first place.
For specifics in your area, please contact an attorney, legal clinic or community housing organization.