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My mother was advised by her bankruptcy lawyer to stop paying her mortgage in order to lower her interest rate..

West Nyack, NY |

Although she was up to date... Now her mortgage went up significantly (interest, escrow, etc). She is on the edge of losing her house if bank doesn't modify or lower her payments..
Can she sue him for wrong advise?

Attorney Answers 3


You can try. But it is a hard case to prove and win.

Side note: unless your mother was in an adjustable rate mortgage, mortgage interest rates don't normally go up when a person defaults on payments.

No bankruptcy attorney (except maybe really bad ones) will, out of the blue, tell a debtor to stop making mortgage payments. More likely, the comment was made in response to some question your mother asked. I am only saying this so you can get a sense of what you might be up against.

Mom: Gosh, my mortgage interest rate is so high, is there anything I can do?
Attorney: Have you tried to refinance?
Mom: Yeah, they turned me down because of poor credit and not enough income.
Attorney: You could try for a loan modification.
Mom: How do I do that?
Attorney: You would need to contact the bank and ask; however, most banks will not discuss a modification with you until you stop making payments. (which is true, even most bank reps will tell you that they won't entertain a modification until the debtor is behind on payments).

As I said, you can try to sue. But I have a sense that the conversation took place within a certain context and that within the confines of that context, the comment may have been accurate information or at least not rising to the level of malpractice.

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Even though the advice was nonsense, I think it would be impossible to sue and win. The earlier response gives an excellent rationale for the reason why.

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My guess is that you have only got part of the story. Obtaining a loan modification is not something anyone can guarantee that someone will obtain. The old strategy thought to improve someone's chances for a modification was to stop making payments but to set the money aside just in case. The strategy today to get a loan modification is to calculate in a couple of ways whether the homeowner will qualify for government loan modification programs offered by the mortgage company holding your Mom's note. I can't say whether suing the attorney is an appropriate option, but if it is, it is not your option, it is Mom's option. Don't expect a compensation check to arrive anytime soon either. You should look for more immediate options. Hope this perspective helps!

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