The threat of foreclosure is one of the most stressful situations that homeowners can experience. You’ve worked hard year after year to purchase your dream house. Don’t submit to lenders because you’ve missed several mortgage payments. By fighting the process, you’re giving yourself a chance to keep your hard-earned investment.
On Long Island, banks own one out of every 660 homes. The courts are congested with foreclosure cases. The court-mandated mediation conferences assist homeowners navigate this process and increase the likelihood of saving your house.
Important Facts about the Foreclosure Process in New York
New York uses a judicial foreclosure process that requires lenders to sue homeowners for the right to auction their homes. This means that you have time to develop a plan for defending the foreclosure action and for keeping your home. In some states, homeowners have just 30 days to pay arrears if they have missed three mortgage payments. In New York, the actual foreclosure process can take years.
Pre-Foreclosure and the Acceleration Letter
If you’ve had one or two late payments, there shouldn’t be a problem. However, if you’re more than 90 days behind, the lender may send an acceleration letter. This document says that the entire mortgage balance will become due if you don’t make up for the late payments. Additionally, lenders must file a pre-foreclosure notice at least 90 days before filing a lawsuit. There are strict legal requirements for this document. For example, lenders must include contact information for at least five non-profit housing counselors in your area.
What to Do If Your House Is In Foreclosure
Mortgage companies can’t sell your home until they have received the court’s permission. Don’t abandon your house during the foreclosure. This is the best thing that you can do because it can help you qualify for modified loan terms and financial assistance programs for your primary residence. Time is on your side, but you shouldn’t delay. Contact an attorney as soon as you receive a 90-day notice or pre-foreclosure letter so that you can develop a defense before the case moves into the advanced stages of foreclosure.
The Summons and Court Complaint
Next, your lender will issue a summons and complaint and notify all property owners and lienholders that there is a pending lawsuit. Foreclosures are handled in the court where the property is located, such as Nassau County or Suffolk County. You have a certain amount of time to respond to these documents. This is when you present your defenses. There are many ways to challenge a foreclosure case. Your attorney can determine if any of these scenarios apply.
Produce the Note and Current State Foreclosure Laws
“Produce the note” is one widely known foreclosure defense that’s been used for more than a century. This method requires the lender to produce the original promissory note and terms of the mortgage. If the lender doesn’t have the documents, the court might say that the homeowner can’t be sued. Because mortgages are resold to faraway companies, there’s a chance that the documents no longer exist. In 2013, New York’s foreclosure laws changed. Now, lenders must produce these documents and meet certain requirements before they can file a lawsuit. Here are several other defenses that are valuable in foreclosure cases.
- To be valid, court documents must be delivered in the proper manner. If your lender didn’t follow the rules, that could be your defense.
- Illegal or discriminatory practices during the sales and closing process could hurt the lender’s case.
- Make sure that the information in the court documents is correct. If you have paid all or part of the arrears, your attorney may base your defense around this fact.
- Did you have a chance to pay the past-due balance? Banks must give homeowners enough time to correct debts before initiating the foreclosure action.
- Active service members qualify for stays that prevent the foreclosure process from advancing.
- If the owner was mentally incompetent when the mortgage was signed, the document might be invalid.
If you don’t qualify for one of these defenses, there are alternatives that let you make up for the past-due payments and keep your home. With Chapter 13 bankruptcy, you can catch up on your payments over the course of three to five years. An attorney can negotiate with your creditors and help you qualify for a loan-modification plan. For lenders, foreclosures are expensive and time consuming, so your creditor may accept a solution that’s convenient for you. Your attorney can advise you on ways that you can keep your home and your equity while avoiding foreclosure.
Blutter & Blutter are foreclosure defense attorneys located here on Long Island with significant experience in home foreclosures in Nassau County, New York as well as home foreclosures in Suffolk County, New York.
