In this article, you can learn about:
- How pursuing foreclosure defense can benefit even the most complicated situations.
- The timeline for foreclosure proceedings in New York.
- What you need to know about loan modification, judgment reversals, and more.
What Is Foreclosure Defense In New York?
Foreclosure is stressful — but you’re not alone. Countless Americans face foreclosure every year, and an attorney from our firm can help. Often, one of the most anxiety-inducing aspects of foreclosure is the lack of control it can cause you to feel. Luckily, there are options available to those who are looking to avoid these proceedings.
The process of foreclosure usually begins when an individual has received numerous notices from their bank regarding delinquent payments.
If at all possible, it’s a good idea to try and modify a mortgage at this point – before the foreclosure begins. But most people seek legal assistance only after they’ve received a Summons and Complaint.
Once you receive the Summons and Complaint, the “foreclosure clock” has started. How long do you have to respond to a foreclosure summons? If you receive these documents from a process server, you have 20 days to file an answer. If the documents are left at your door in the mail, you have 30 days to file an answer.
It’s very important to file your answers. This allows you to preserve your defenses and your rights in the state court.
Once My Lender Begins The Proceedings On A Foreclosure, Do I Have Any Chance Of Saving My Home?
Once your lender has begun foreclosure proceedings, there are certain protections and options available to you as a debtor. One example of this is that New York State Courts have a mandatory foreclosure settlement conference program.
In this program, you can apply for modification with court oversight and review foreclosure’s alternative sections such as short sale, short payoff, and other options. Additionally, if you can’t come to a settlement with the bank, a foreclosure defense law firm could force the bank to prove its case. In some situations, if the bank is missing documents, it can be very hard for them to succeed.
Consider the following situation, for example:
I currently represent a homeowner in Suffolk County who has been in foreclosure since 2015. In 2019, the bank was granted a summary judgment, so we filed an appeal. My firm won this appeal and the reversal was granted in April of 2021. The reversal of the summary judgment order forced the bank to redo its papers and correct its address.
It’s been over a year since that reversal was granted – and the bank still hasn’t filed a new motion. Because of all this, my client is hoping to gain a favorable settlement with the bank, given the status of the litigation.
This situation illustrates how crucial it is to defend against foreclosure actions. Of course, in some situations, you won’t win the overall case. However, defensive moves can work to delay foreclosure action. In this way, even if your house is sold in foreclosure, you can always file for bankruptcy and get rid of any liability that might be leftover.
What Would Happen In My New York Foreclosure If I Did Nothing To Stop It?
When you receive notice of your foreclosure, you would typically file an answer and appear at the mandatory foreclosure settlement conference. If you neglect to take these actions (or any action at all), it could take anywhere from one year to 18 months for the bank to get to a sale.
On the other hand, if you have a foreclosure defense attorney on your side, it can take anywhere from 3 to 5 years for the bank to get to a sale date. How can an attorney delay a foreclosure sale for so long? Even if an attorney is unsuccessful in all of their attempts to modify or reverse the foreclosure, the legal process can buy you the time you need to take action that will help you in the long term.
The delay in and of itself can be a benefit. Why? Because during this time, you will not be making mortgage payments. However, it’s important to consider the value of the house.
At the beginning of your case, you and your attorney will go over the specifics of your situation. If you have a house with significant equity and you’re in foreclosure, you should look to either modify very quickly or sell the property and get whatever equity you have in the house. This will help to maximize the property because, if the house is sold in foreclosure, you will lose out on that valuable equity.
If I Can’t Keep My Home In A New York Foreclosure, What Are My Options?
What you will choose to do in foreclosure will depend largely on what your needs are.
If you’re working to delay the action and stay in the property as long as possible, there are strategies that can be used to that end. You may try defending the action, filing the bankruptcy and applying for modifications, and so forth.
If you’re looking to leave the property with no further obligation, you can negotiate with the bank to a deed in lieu of foreclosure or a short sale to get rid of your obligations.
In any situation, the best way to get a clear picture of your options moving forward is to speak with an attorney. A skilled foreclosure attorney will be able to provide you with the information you need to make an informed decision with confidence.
Can I Avoid Foreclosure By Negotiating A Lower Rate Or By Obtaining A Lower Modification From My Bank?
There are a few different negotiation strategies that can be used to avoid foreclosure.
Depending on your current situation, you may qualify for a loan modification. To do this, a borrower will usually need to show their ability to make regular payments upon the new, modified loan terms.
A bank will typically determine this by looking at a borrower’s gross household income and then multiplying that by 0.31. This is the “magic number” that the banks use when deciding whether a borrower can afford the modified payment.
Once a bank determines what your “0.31 number” is, they will look at whether they can forebear on part of the balance. Then, a bank can put a balloon payment at the end without interest, forgive a portion of the debt, lower the interest rate or the maturity rate, and any number of options to make the modification work.
How Is This Done?
- Once you get into a foreclosure settlement conference or the loss mitigation program, your attorney will meet with the bank’s counsel.
- The court will set up a schedule, at which point you will have to provide an application for modification and a number of other documents.
- The bank will then have a set period of time to review those documents and advise as to whether they require any further information.
- There will be a date set to provide those further documents.
- The court will set a date for the bank to provide a decision.
If the bank denies the application for modification, then they are required to provide the reasoning behind the denial. Even this creates an opportunity to go to the court and file an appeal if it seems they were not bargaining in good faith. At which point, the matter would be left to the court.