Legal Question in Legal Malpractice in Maryland
Foreclosure in Estate Case
I am representing a PR probating her late mother's estate. Before the mother's death, clients and mother took out a reverse mortgage on the property. After mother died, client did not opt to pay on the reverse mortgage. Immediately after opening the estate and receiving letters of administration, I contacted the lender and faxed over the letters, thereby staving off foreclosure for 6 months. Before the end of the posting period (creditors and interested persons), siblings of my client filed a petition to caveat. We could not list the home for sale until the matter was resolved. This took us past the 6 month foreclosure stall. Clients did not request an extension, nor ask me to request one. It would not have mattered anyway: HUD does not allow extensions for homes that are not listed, which we could not have done until the end of the caveat proceedings. Home is currently in foreclosure proceedings. My suggestion to clients was to speak with another lender about a re-fi to payoff the reverse mortgage, save the home, and allow them to sell on their own conditions. Regarding any liability on my part, my gut feeling is that the clients are responsible for dealing with debts and creditors. Any thoughts? Thanks!
2 Answers from Attorneys
Re: Foreclosure in Estate Case
My first question is whether your scope of representation as defined by your engagement letter (or representation agreement) is consistent with what you did or did not do with respect to debts and creditors. Did you communicate and document in writing what or how you told the clients to proceed? If the answers are yes, you are likely not going to have any problems.
Heather Bupp-Habuda, Esq.,
Ethics Advisor and Educator,
Adjunct Law School Faculty of Legal Ethics
Re: Foreclosure in Estate Case
As long as you gave them appropriate advice and kept them informed of their options in a timely manner, any decisions they make thereafter should not expose you to any claims.
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