Diaz & Associates P. A.
New York Foreclosure Defense Attorney
The Nation's housing market has undergone some pretty significant changes over the last several years. New York was hit as hard as most by this recession. Homes have lost value while people have lost jobs. New York's unemployment rate almost doubled between 2007 and 2010.Those that did manage to find new positions were often under-employed, forced to accept jobs below their training and education. Some, who managed to keep their jobs, had to take cuts in pay or forced to work reduced hours.All of this has put a strain on many peoples' budgets and made foreclosure of their homes a real possibility. A New York Foreclosure Defense Attorney may be able to help.
Prior to the recession housing boom, many loan companies were anxious to cash in, and criminally took advantage of prospective home owners in numerous ways.Lenders fraudulently altered financial data, forged signatures and did not adequately check on the buyer's ability to meet the terms of the mortgage. These selfish acts were done to make sure that almost everyone qualified for a mortgage, thereby increasing their revenues and profits.They planned to resell your mortgage anyway, so what did they care if you weren't going to be able to pay.
Before you decide what defense you should undertake, it's important to understand a little bit aboutNew York Foreclosure Laws.
New York Mortgage Foreclosure Law
- New York, as with most states, is governed by "Lien Theory". The "Mortgage" is considered the lien on the home, which is held as the security for the loan.
- New York employs"Judicial Foreclosure". The definition simply means that all foreclosures are processed through the courts (the judicial system).
- Pre-Foreclosure Steps are required by the lender. They must send an Acceleration Letter to the borrower which states that lender will accelerate the entire amount of the mortgage if the arrears (the total amount overdue) are not paid by a specified date. A homeowner is usually considered in default after one payment is missed, however most Acceleration Letters are not sent out until two or three monthly payments are missed.
- Under New York State Law, the lender must send the borrower a special filing notice at least 90 days before filing a foreclosure summons and complaint. The notice must contain specific language and must contain a list of at least 5 nonprofit housing counseling agencies located near the borrower
NY Foreclosure Process Explained
Step 1: Lender Files Documents with Court
- Lis Pendens (a pending lawsuit) – warns all people that title to the property is in litigation.
- A Summons and Complaint – the lender "serves" the Summons and Complaint on the borrower(s).
Step 2: Affidavit of Service, Request for Judicial Intervention, and Attorney Affirmation
- Affidavit of Service – sets the date and how it served the borrower.
- Request for Judicial Intervention – notifies the court that it must schedule a mandatory settlement conference.
- Attorney Affirmation – that the attorney representing the lender is an attorney admitted to practice law before the courts of the State of New York and that the claims made are true under penalty of perjury.
Step 3: The Borrower Files an Answer
- The borrower must Answer the summons and complaint within 20 days if served in person or within 30 days if delivered in a different manner. Copies must be sent to both the court and the lender's attorney.
- This Answer gives you an opportunity to explain why you feel there were errors regarding your mortgage origination and/or servicing.
- If you do not want to file an Answer but want to be notified of future court actions, file a Notice of Appearance with the Supreme Court in your county. No need to do this if you file an Answer.
- If the borrower fails to File an Answer, the borrower automatically defaults. If the Borrower defaults then:
- The lender files an Order of Reference motion asking the judge to appoint a referee who will sum up the total amount owed, including principal, interest, late charges, and foreclosure fees and costs.
- Once the referee completes his/her work the lender files a motion requesting the court to enter a default Judgment of Foreclosure and Sale.
- After the judge signs the Judgment of Foreclosure and Sale, the lender must (only if the borrower did not file either an Answer or a Notice of Appearance) publish at least 30 days before the auction date, a foreclosure notice in a local paper.
. Step 4: Mandatory Settlement Conference
- Within 60 days of the filing of the Affidavit of Service (See Step 2), the court must hold a mandatory settlement conference to see if a mutually agreement can be reached. The court sends out a notice as well as instructions on what to bring for this meeting.
- If an agreement cannot be reach at this step, the process continues to Step 5.
Step 5: Litigation and Discovery Phase
- Discovery is process in which opposing parties in a lawsuit request relevant documents from each other. The borrower can and should send a request for discovery to the lender who in turn may receive one from the lender.
- If the lender believes the borrower's defense lacks merit (the evidence is weak or doesn't prove wrongdoing) they will file a Motion for Summary.
- To continue fighting the foreclosure the borrower must file an Answer to the Motion for Summary Judgment which includes all the documentation to support the borrower's defense.
- If the judge grants the lender's motion for Summary Judgment, the lender will move for an Order of Reference, as described in Step 3.
Step 6: Trial
- If the case is not resolved by settlement or by motion, the law proceeds to trial.
- The amount of time that is needed to complete a New York foreclosure depends upon the court's schedule and if you go through to step 6. The New York Department of Financial Services reports that it takes an average of 445 days (15 months) from the first missed payment until a foreclosed house is actually sold.
- New York does not have a "Right of Redemption" statue which permits a foreclosed home owner to reclaim the property.
- Unfortunately for the home owner, New York has a "Deficiency Judgment" provision which can be enforced if the property's sale proceeds do not meet the mortgage balance. If this is happens, the homeowner will be responsible for any deficit.
Some Helpful New York Mortgage Background
In times gone by, banks used to keep your mortgage in house. Situations often could be handled by a simple call or visit to your local office of your bank. Banks wanted to keep you as a customer.
Things have changed drastically in the mortgage industry over the last 10+ years. Mortgages are seldom kept by the originator, but are often bundled and sold to investors. These investors employ "servicers" who handle the day to day dealings with the borrower. Many eagerly receive extra compensation for foreclosure on homes!
Defense Strategies for Saving Your Mortgage
Foreclosure Defense involves strategies in your fights with your lender, who is attempting to foreclose on your property. The objective of Foreclosure Defense is to either delay or to completely avoid foreclosure. Fighting against the giant foreclosure machine might seem intimidating but there are methods we can utilize in our fight.
When lots of mortgages were combined with others and sold, the lending institutes didn't always comply with the law. Often crucial paperwork has been misplaced, lost, or in some cases never completed. Endorsements were not always appropriate or in compliance with the law. Many of these less than scrupulous mortgage companies were in fact "mortgage mills". They rushed the loans through and hastily transferred bundled loans. In their haste, many errors were committed. Your lawyer can exploit this gross behavior.
Your attorney can question if your lender can prove and document that they indeed own the mortgage, and that they have the legal standing to file for foreclosure. Foreclosure defense strategies can focus on shoddy record-keeping and sometimes unlawful actions by lenders.
Even if your lender isn't guilty of any of these atrocities, you still can take advantage of the skill of your New York Lawyer. He can use court processes to delay a sale, giving you and your attorney the time to advance a better solution to your financial problems.
The mortgage industry has been plagued with widespread errors committed by lenders. It may well be prudent for you to contact Diaz & Associates, your New York Foreclosure Defense Lawyers.