As foreclosure rates rise nationwide, and compliance laws become more strict, a foreclosure attorney is becoming increasingly necessary for lenders who are considering beginning the process of enacting a nonjudicial foreclosure. It is equally important for lenders to choose a substitute trustee to partner with them in completing a foreclosure. At Total Lender Solutions, many clients come to us wondering whether they can have one party play both roles. We tell our clients about the importance of having separate parties that can work together.
As substitute trustees for several states, the team at Total Lenders Solutions has worked with many foreclosure attorneys to bring a foreclosure to a conclusion with as few delays and complications as possible. If you are a lender needing to foreclose your property and protect your assets, a combination of a foreclosure attorney and a substitute trustee is your best option.
Read below to learn more about the relationship between a foreclosure attorney and a substitute trustee.
What is the Relationship Between a Foreclosure Attorney and a Substitute Trustee?
A foreclosure attorney and a substitute trustee likely have similar responsibilities and knowledge, both focused on the requirements needed to complete a foreclosure in a timely and effective manner. This difference between a foreclosure attorney and a trustee is the role they play in a foreclosure – an attorney represents the lender and the trustee remains neutral.
Years ago, the role of a trustee and a foreclosure attorney may have been done by a single party. Then, a 2017 law passed by the General Assembly amended foreclosure statutes to prohibit attorneys who serve as substitute trustees for lenders from simultaneously serving as counsel for the lender. This is due to the potential conflict of interests between the role of an attorney, who represents the lender’s best interest, and the substitute trustee, whose focus is on foreclosing the property within full compliance with state and local laws.
When this structure is not followed when enacting a foreclosure, it can result in costly penalties. If the trustee cannot disclose themselves to the borrower as a neutral party, due to the lawyer relationship they have with the lender, the court may order the lender to begin the foreclosure process all over again, which can be complex and financially depleting, especially if the property has already been sold.
Since the substitute trustee handles the best interest of all parties, trustees and attorneys must often work together to complete the foreclosure process. Trustees are tasked with knowing the procedure inside and out and filing the needed documents. The attorney is tasked with providing the necessary information and documents to the trustee.
Related Article: Nonjudicial Foreclosure Process: What Commercial Real Estate Attorneys Do
Choosing the Best Substitute Trustee to Work with Your Foreclosure Attorney?
The responsibility for retaining both a foreclosure attorney and a third-party trustee falls on the lender. Engaging a dependable trustee partner is the most effective strategy for safeguarding your lending business and promptly recovering your assets. A reputable foreclosure partner like Total Lender Solutions ensures the seamless progression of the foreclosure process from start to finish.
In instances where cases become complex, Total Lender Solutions has a history of working alongside top-tier real estate attorneys who address needs when they pop up. Our meticulous approach means that you can ensure that you are protected from delays and mistakes.
Take the first step toward success – get in touch with us today.
