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Foreclosure

Foreclosure Defense

Preventing Foreclosure

Loan Modifications

 

Take a look in the public Ecourt system and you'll see that our law firm has

successfully handled countless foreclosure defense cases.

Click Here for a video discussing foreclosure and foreclosure alternatives.

Why you should contact a foreclosure defense attorney immediately!

When a lender files suit against you in a foreclosure case, you have 20 to 30 days to create a response to the complaint made by the lender, depending on how the papers were served. Throughout this time you must:

  • Formulate a defense and a reason for why you missed payments;
  • Decide what alternatives are viable and the best for you and your situation and;
  • Review your mortgage contract.

This process tends to be overwhelming for many people. As we have helped thousands of clients successfully defend themselves and their properties against foreclosure, we can help you.

 How we have helped thousands of people

The lender is not permitted to file a lawsuit against the borrower without any warning. Once the suit is filed, the homeowner is asked to appear in court and answer to the notice of foreclosure that was served upon them. While anyone can appear in court without a lawyer, the homeowner would benefit from representation by an experienced foreclosure attorney. With our assistance, a homeowner can prove that their property should not be foreclosed upon. Additionally, we can help the borrower negotiate terms with the lender and possibly avoid court altogether.

Myths about foreclosure

MYTH: My mortgage company would rather foreclose on my home than keep me in it.
The mortgage company sustains an average loss of about $58,000 when foreclosure occurs. The mortgage company is in the business of providing mortgages – not owning or selling homes. They would always prefer to keep you in your home.

MYTH: Foreclosure is an uncommon problem- I'm all alone in this.
Foreclosure is a challenge faced by millions of Americans every year from all walks of life. Rich, poor, young, old – the list is as diverse as society itself.

MYTH: I've only missed one payment - I can likely catch up.
The most important thing to remember when playing catch-up with your mortgage is you owe any delinquent payments plus the current month's payment. So, if you're a month behind, you actually owe two payments – last month's and this month's.

MYTH: I've missed too many payments to get help.
There's always time to get help. The Homeownership Preservation Foundation can't work miracles, but they can always give expert advice for any situation. That being said, that help they are able to over in far more constrained if you're eight payments behind than if you're one or two behind. The sooner they can get involved, the better chances you have of avoid foreclosure.

MYTH: I'm getting many offers or "help" from a variety of different people. Are they are scams?
Because of the public nature of foreclosures, anyone is able to access foreclosure listings on a daily basis. The public record includes the owner's name and address at the very least, and in some states, they could include other sensitive information. Armed with this data, scammers can take advantage of a desperate owner. Here's what to look for to avoid foreclosure scams:

1.     Your home's ownership changes hands. A common scam is a party buys your home, and then lets you rent it back. It sounds good at first, but you're losing your property, and your new landlord can now legally kick you out of your home with little to no notice.

2.     You're asked to pay something up-front to stop making mortgage payments. Usually, these scams involve paying large sums of money to some sort of "foreclosure prevention service." These services offer to do what our counselors do: counseling, a budget, and approaching the mortgage company to consider a payment plan. But the services do not always do this work thoroughly, or follow through at all. The most important thing to remember when it comes to any foreclosure service is this: Foreclosure advice and direction should always be free.

3.     You're under pressure to act immediately. Some will prey on the stress and anxiety surrounding the foreclosure process by convincing owners to sign things they don't understand. Don't sign anything without either first talking to an attorney, your mortgage company or a nonprofit foreclosure prevention organization like the Homeownership Preservation Foundation

MYTH: It's impossible to stay in my house after foreclosure proceedings begin.
Contrary to what you might think, there are still options available to you after the foreclosure process has started. The sooner you call Homeownership Preservation Foundation, the more tools they'll have to help you fix your situation.

Foreclosure overview

A foreclosure is what occurs when the mortgager is unable to keep their promise to the bank or lender that has a lien on their home to pay their mortgage payments on time. The lender then takes legal action to gain ownership of the property, in an attempt to sell the property as a means of satisfying the debt. Once this process is complete the homeowner loses all rights to the property and, if necessary, will be evicted. This unfortunate series of events can be avoided with the right preventative steps. Often a lender initiates the law suit improperly which might get the foreclosure dismissed with a proper defense. Often the original mortgage firm sold the debt so the original required papers cannot be procured and there is no right to foreclose. Lenders cannot make up fees just because you're in foreclosure so you are entitled to push back. Lenders must adhere to consumer protection laws under RESPA and Truth in Lending Act rules. If your loan is considered a predatory loan, that is a defense. If you're offered a loan modification and then it is later denied, that can serve as a defense.

These are your rights

Defending a foreclosure without a lawyer is often a losing battle. Our firm believes that you should not attempt to defend a foreclosure lawsuit pro se unless you have experience in real estate and foreclosure matters. The law governing the foreclosure process is complicated and complex. You have a legal right to retain the help of an attorney to counsel you in this time of need. Our firm is adept with the law governing the foreclosure process. There are many different aspects of a particular case, including the type of foreclosure, the various deadlines and timeframes, and the impact the foreclosure will have on you. During a free consultation, we will analyze your situation and determine what actions are necessary and appropriate to help you reach the best possible outcome.

 

Pre-foreclosure notice

A pre-foreclosure warning is a notice sent out to at-risk borrowers by lenders and servicers 90 days prior to initiating foreclosure. Throughout the entire state, Suffolk County, followed by Queens, and then Nassau, has the highest number of notices sent out since the law mandating these warnings was initiated. These notices provide the homeowner with a formal warning about a potential foreclosure, giving you time to get help before you fall too far behind to recover. This is where our team of experienced attorneys can help. We can provide you with the advice and expertise you need in order to avoid the hefty fees and devastation that entails foreclosure. If you have received a pre-foreclosure notice the time to act is now, don’t hesitate to obtain the proper legal advice that will ultimately save your money and your home.

Bankruptcy as an alternative

If you are served with a notice of foreclosure, the feeling can be overwhelming. The threat of losing your home is like a cloud hanging over your head, and is difficult to escape without the right help. Our team can help you during this troubling time. Bankruptcy can be an option for those that are dealing with foreclosure. We will determine if bankruptcy is the best option for you.

Once a bankruptcy is filed, the lender can no longer legally contact the borrower for payment, often opening the door to negotiations and may provide for an alternative to losing your house in a foreclosure.

What if I don’t want to file bankruptcy?

Bankruptcy is an ugly word for many people. It is also not for everyone; for many people, other methods work better for their specific situation. Fortunately, for those faced with foreclosure, there are other options if you do not wish to file bankruptcy. Legal and real estate procedures such as short sales, deeds in lieu of foreclosures, and loan modifications are all viable alternatives to both bankruptcy and foreclosure.

Short sale

In a short sale, the homeowner is allowed (by the lender) to sell their property for a price less than the mortgage. While the sale price is typically lower than the balance on the mortgage, the lender will usually agree to a short sale because it is typically better for the lender than a foreclosure.

Short sales are utilized by homeowners to avoid foreclosure and bankruptcy. Engaging in a short sale halts the foreclosure process, and typically immunizes the borrower from any further lawsuits from the lender. For those that do not qualify for a loan modification, the short sale is an option; it is a way to cut financial exposure after the short sale.

 Deed in lieu of foreclosure

A deed in lieu of foreclosure is when the homeowner gives a property back to the lender. This is not common in New York for a primary residence. This usually occurs when the homeowner cannot afford the mortgage anymore, and cannot make payments to become current on the mortgage. The lender then sells the property for whatever it can get. The homeowner walks away from the problem. In a free and confidential consultation, our firm can discuss your particular case and situation, and determine if this is the correct course of action for you and your property.

Loan modification

Loan modifications are often available for individuals who have fallen behind on their mortgage payments and are now facing late fees, interest, and other penalties on top of what they have already failed to pay on their original balance. We can negotiate with your lender to work out a new payment plan. This process is often successful in producing situations where, over time you become current with your mortgage and are able to keep your home.

The foreclosure process

Foreclosures can be traced back to missed mortgage payments. This may have occurred as a result of a job loss, increased interest rates, or the addition of a second mortgage. After the homeowner misses a few monthly payments, the lender will file a foreclosure lawsuit. Once served notice, you are required to respond within 20 or 30 days. This time is critical since a good defense can buy you the time needed to review alternatives and options.

While you can file a response yourself, it is highly recommended that you consult a lawyer before responding. Not responding, or responding with an inadequate response, could eliminate any chance you have to effectively defend against the foreclosure. On behalf of our clients, our firm has successfully responded to hundreds of foreclosure notices, and we hope we can do the same for you.

Difficulties with foreclosure

There are “wolves in sheep’s clothing” out there that ensnare Americans every day. Traps in the form of scams, predatory lending, and subprime loans may seem like beneficial options for homeowners facing foreclosure. However, these traps eventually will destroy your credit and even steal your money.

Scams

Given the current state of the economy, there are an increased number of people who prey upon those in dire straits when it comes to their mortgage and impending foreclosure. Some policies and contracts you are presented with may in fact be detrimental to your situation. You may end up losing money or your property.

There are two common types of scams. One involves the homeowner signing a legal contract turning over ownership of their home. Of course, the homeowner is not doing this willingly. In these instances, the signer does not read or understand the contract, or the scammer leaves out certain parts of the contract and adds them post signature. Another scam involves a fake debt relief company persuading a homeowner to pay them to “work with them” toward the defense of a foreclosure. In most of these scenarios, the work that the company does can be done by the homeowner themselves and does not even lead to a better outcome to the foreclosure case; the homeowner is essentially throwing money away.

It is important to review any contract that will “help” you with your foreclosure situation with an experienced attorney before you sign it.

Predatory lending

Some lenders are unethical, unfair, and deceptive. They will deceive you into entering into a contract on a loan with detrimental terms. These lenders fall into the category of predatory lenders. In some cases, lenders or brokers have not only misled borrowers but have also altered documents after they had been signed. Consequently, many homeowners who fall victim to predatory lending end up facing non-negotiable high interest rates and default on their mortgage, leading to foreclosure.

Predatory lending is illegal, and the law is on your side.

Subprime loans

Many people that do not have good credit are faced with few options when it comes to obtaining loans and taking out mortgages. Often, they end up with a loan bearing a high interest rate because their credit rating does not qualify them to receive the current premium rate. Over the term of the mortgage, the high interest rate accrues into exorbitant amounts, sometimes climbing higher than the actual principle of the original balance of the mortgage itself. Fortunately, subprime loan borrowers have options. Bankruptcy can wipe your debt slate clean, and will erase the months or years of high interest payments that you may have missed. There are alternatives to a foreclosure due to subprime loans. Contact our firm so we can help you determine the best solution to your loan situation.

Is your lender threatening you with a foreclosure?
If so, it's HIGHLY SUGGESTED that you act quickly to resolve the situation. A foreclosure can damage your credit and make it almost impossible to purchase another home in the future. How this situation is handled is extremely important, and our experienced legal professionals can help. There are opportunities to successfully resolve a foreclosure, and we have extensive experience in helping individuals and families get this problem under control.

The firm can assist in any all types of foreclosure defense, and manage the foreclosure process, protecting your rights and interests throughout the process. It is important to understand the ramifications of foreclosure, whether a second mortgage foreclosure or other legal action regarding your property and your lender. In some cases, the best opportunity is in a short sale, arranging a cash for keys, or negotiating mortgage modifications. We have extensive experience in dealing with lenders and negotiating solutions for our clients.

If you need information about whether foreclosure vs. short sale, a deed in lieu, or how the firm can help you with a short sale negotiation, you are urged to contact the firm as early as possible in the process. The earlier we get involved, the more opportunities could be found to help you get the matter resolved favorably. In any short sale, it is crucial that a waiver of deficiency is part of the process, or you could still owe a lender tens of thousands of dollars, or more, based upon the final selling price of the property.

Understanding about a strategic default and why this may be necessary can be fully explained when you meet with our firm to discuss your individual mortgage problem. There are countless individuals and families in the Long Island area that are in an underwater mortgage and there are options and opportunities that should be reviewed to determine how to best manage the situation. The tax implications should be understood and what to expect with regard to the IRS and a 1099-A/1099-C.

 Some properties that were purchased during the sub-prime mortgage boom have plummeted in value, and owning the property no longer makes good financial sense. If you need information about a walk away mortgage, how to avoid a deficiency judgment, asset protection, or need quality legal representation in debt negotiation or debt relief, we have the experience, qualifications and credentials you need.

 

Until recently, successful defenses against foreclosure were relatively rare. But that is changing rapidly -- more homeowners are successfully challenging foreclosure actions. 

This change is due, in large part, to the unearthing of more and more evidence that the real estate industry has been filled with fraudulent and predatory lending practices. Because of this evidence, courts that once rubber-stamped foreclosure actions are now beginning to shift their sympathies towards homeowners. 

Homeowners and their attorneys are taking advantage of this change in judicial attitude, and challenging foreclosure actions in many different ways. Here's a review of some of the most common defenses to foreclosure, and how to raise them in court. 

How to Raise a Defense to Foreclosure?

In order to raise a defense to the foreclosure action, you must bring the issue before a judge. This is automatic in about half the states, where foreclosures are typically accomplished through civil lawsuits and judicial foreclosure orders. 

Common Foreclosure Defenses. As courts are increasingly sympathetic to challenges to foreclosure actions, attorneys across the country are raising many different types of defenses.

Below is a description of the most common of these:

 

The Terms of the Mortgage Are Unconscionable - Over the years, attorneys have used a branch of law called "equity" to come up with a panoply of approaches to defending against foreclosure. The equity branch of law focuses on fairness in situations where a legal statute doesn't provide adequate relief. It usually isn't enough to simply claim that the foreclosure is unfair; rather, you have to come up with a specific justification for your position that has previously been recognized by the courts. 

One such justification is a principle known as unconscionability -- that is, the terms of your mortgage, or the circumstances surrounding it, are so unfair that they "shock the conscience of the judge." In one case where this defense was successful the borrower spoke very little English, was pressured to agree to a loan that he obviously couldn't repay, was not represented by an attorney, and was unaware of the harsh terms attached to the loan (such as an unaffordable balloon payment ). 

You Are a Service member on Active Duty - If you're on active military duty, the Service members Civil Relief Act (SCRA) provides you with special protections. Most importantly, if you took out your mortgage before you were on active duty, your foreclosure must take place in court even if foreclosures in your state customarily occur outside of court. If a foreclosure is initiated while you're on active duty, you can receive a postponement of the proceeding by requesting it from the court in writing. 

The Foreclosing Party Didn't Follow State Procedures - In some cases, the foreclosing party doesn't follow state procedural requirements for bringing a foreclosure action (for example, it fails to properly serve on you a notice of default required by state law). If this happens, you may be able to challenge the foreclosure. If your challenge is successful, the court will issue an order requiring the foreclosing party to start over.  

Virtually all judges will overlook errors that are inconsequential, such as the misspelling of a name. Similarly, if the foreclosing party's error doesn't actually cause you any harm, it may not be worth fighting over. More serious violations will get a more serious response from the court. 

The Foreclosing Party Can't Prove It Owns the Mortgage - Lenders often fail to assign a mortgage properly which messes up their records on who owns the note. 

 The Mortgage Servicer Made a Serious Mistake - mortgage servicers (entities who contract with banks and other lenders to receive and disburse mortgage payments and enforce the terms of the mortgage) make mistakes all the time when they're dealing with borrowers.

You may be able to challenge the foreclosure based on mistakes such as:

•crediting your payments to the wrong party (so you weren't, in fact, delinquent to the extent asserted by the foreclosing party)

•imposing excessive fees or fees not authorized by the lender or owner, or

•substantially overstating the amount you must pay to reinstate your mortgage. 

Mistakes on the amount you must pay to reinstate your mortgage are especially serious. This is because an overstated amount may deprive you of the main remedy available to keep your home.  

The Original Lender Engaged in Unfair Lending Practices - You may be able to fight your foreclosure by proving that your lender violated a federal or state law designed to protect borrowers from illegal lending practices. Two federal laws protect against unfair lending practices associated with residential mortgages and loans: the Truth in Lending Act (TILA) and an amendment to TILA commonly termed the Home Ownership and Equity Protection Act (HOEPA). TILA applies to all loans. HOEPA only applies to "high cost" loans -- certain loans that have an unusually high interest rate or that come with unusually high up-front processing fees. 

 

Lenders violate TILA when they don't make certain disclosures in the mortgage documents, including the annual percentage rate, the finance charge, the amount financed, the total payments, the payment schedule, and more. 

In the case of loans covered by HOEPA, lenders must comply with various notice provisions and are prohibited from using certain mortgage terms, such as balloon payments in loans with terms of less than five years. 

The right to rescind the loan. TILA and HOEPA provide a number of remedies for the borrower if these laws are violated. However, the key remedy in foreclosure actions is the borrower's ability to retroactively cancel or rescind the loan. This is referred to as the right to an "extended rescission." Unfortunately, the right to an extended rescission under these federal laws applies only if the loan is a second or third mortgage that you used for purposes other than buying or building your home (for instance you used it to pay off your unsecured credit card debt). Also, the violation must be considered "material" (that is, significant or substantial).

State-law remedies for "high-cost" loans. A few states have special protections for people facing foreclosure on "high-cost" mortgages. If your state is one of these, and the lender has violated any of its provisions, you might be able to raise that violation as a defense in your foreclosure case.

If your home is being foreclosed upon, it may be possible to stop that foreclosure from happening. If your home has already been foreclosed and even sold, it may still be possible to unwind that sale and restore you to your home. As a comprehensive debt relief law firm, our firm utilizes all the tools available to stop a wrongful foreclosure and help people in New York stay in their homes.

New York is crowded with homeowners who were talked into buying more property than they could afford through a variety of banking tricks. There were adjustable rate mortgages with attractive teaser rates that quickly reset to a much higher rate. Even worse are the mortgages that continue to reset periodically through the life of the mortgage, always higher and never lower. Then there are the mortgages with hidden balloon payments that require the borrower to come up with enormous sums of money on the happening of some condition written into the contract's fine print. If you were roped into one of these mortgages and now the bank is trying to foreclose because you can't meet the payments, you may have options:

Suit to Quiet Title - where the bank must prove it has title and the right to foreclose on the property

Securitization - requiring the lender to produce the note may be a challenge for the bank where the mortgage has been securitized, i.e. pooled together with other notes and turned into an investment instrument which has been sold many times over to giant investment structures like hedge funds or pensions funds Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA), Regulation Z - these federal laws require the lender to make certain disclosures regarding the true cost of credit when the loan is being made, and failure to comply with these laws may present a strong defense against an attempt to foreclose State laws against fraud and predatory lending - Often state laws provide better protection for the consumer and are easier to litigate. Where appropriate, we file the appropriate complaint in state court and resist attempts by the lender to remove the case to federal court Ways to Avoid Foreclosure in the First Place If you have missed mortgage payments in the past or feel yourself sliding into foreclosure, there may be steps you can take prior to receiving the notice of default from your loan servicer. For instance, it may be possible to negotiate a loan modification or workout from your lender. Since the sub-prime mortgage crisis of a couple of years ago, the federal government has created a number of programs designed to encourage lenders to agree to a variety of such modifications.

Through the federal government's Making Home Affordable programs, you may be able to obtain a loan modification, interest rate reduction, refinancing, a deferred payment, or financial assistance to transition out of your home while avoiding foreclosure. Some of the major programs under this initiative include: Home Affordable Modification Program (HAMP) - If you are struggling to make your mortgage payments but are currently employed, you may be able through HAMP to lower your monthly mortgage payment down to 31% of your monthly income, saving perhaps hundreds of dollars per month on your mortgage.

Home Affordable Refinance Program (HARP)

If you are current on your payments but cannot get refinancing due to a decline in your home's value, you may be eligible to refinance through HARP into a more affordable and more stable mortgage. FHA Short Refi - if you are not behind on your mortgage but owe more than your home is worth, you may be able to refinance into a more affordable FHA loan, reducing the amount you owe on your first mortgage to at the most 97.75% of your home's current value. Home Affordable Foreclosure Alternatives - $3,000 to help you relocate if you rid yourself of your mortgage by conducting a short sale or deed-in-lieu, effectively walking away from your home while avoiding foreclosure.

Save Your Home With a Chapter 13 Bankruptcy

Although the government has initiated many valuable programs, none of these government programs actually require the lender to agree to any sort of loan modification, even if the bank took millions in bailout money following the sub-prime mortgage meltdown. One sure way to stop a foreclosure in its tracks is with a Chapter 13 bankruptcy. Chapter 13 allows you to catch up on missed payments comfortably by rolling them into a 3 or 5-year debt repayment plan, while pulling you out of default and the threat of foreclosure. Lender's lawyers sometimes foreclose by mistake or in violation of the law; you may think you have a workout negotiated, not realizing that you are dealing with a gigantic institution, and the foreclosure department may have no idea what the loan modification department has agreed to. If you receive a notice of default or foreclosure, you must ask quickly. Contact an experienced foreclosure defense attorney to stop the foreclosure before the sale if possible.

Note that the word foreclosure is often spelled incorrectly as forclosure.