New York Foreclosure Defense Lawyers
Housing prices are dropping at a rapid rate and foreclosure rates are at their all time high in over 50 years. As our unstable economy struggles to regain a secure position all we can do is wait and hope that we do not become a victim. If you do find yourself a victim of the recent home foreclosure storm, you may have options.
Many think that since they defaulted on their loan and have entered foreclosure, they are at the end of the road. Many will simply accept these terms and begin packing boxes to move out of their precious homes. If we have found any trend in the current housing crisis, it is this: many of those who are in foreclosure have been put there from a sub-prime mortgage loan or a predatory lending scheme.
Many people are struggling with their mortgage payments and some will fall in to foreclosure. I have compiled a to-do list:
1. Don’t panic, but take this seriously. If you do nothing or wait until it is too late you will lose your home. Foreclosure process in New York State takes several months to complete.
2. Respond to the Summons. True, you do not have a defense, you owe the money and you are behind, BUT it is still a good idea to file a response requesting that notice be sent to your home. Send the original to the Clerk of Court and a copy to the foreclosure attorney. Do this because then they have to send notice and you will know when the sale date is. You can’t always depend on a Foreclosure Vulture” to tell you they are buying your house on Tuesday, well not if the market is bad. The larger foreclosure firms are good about sending notices even if no response and a default judgment is entered, but this is only a courtesy, not a right.
3. Be careful about the short sale. Hungry realtors will try to talk you in short sale where the mortgage company allows you to sell the house for less than is owed.
Yes, it will stop the foreclosure but you risk having to pay taxes on the windfall you received on the debt the mortgage company wrote off. If you file bankruptcy later, the taxes owed for the short sale would be a priority debt and nondischargeable.
4. The magic refinance that will save you. Fine, try it, but, there are things to consider: What is the new rate? Is it adjustable? Is there a balloon payment? Will there be an escrow to handle the taxes and insurance? How much is the mortgage broker charging you? The other issue is timing. Will it close and fund before the sale? I have seen cases where people lost houses waiting for the refinance that never came. Note: when you file a Chapter 13, you get to keep your existing mortgage and terms, you get a chance to catch up.
5. Selling the house. If you can, great, but in a bad market you may wish to file the Chapter 13 and sell the house at a better price when the market is better or when your house is no longer a “bargain/steal” because of an impending foreclosure. Note: for best results it is wise to spend 36 months or more in the Chapter 13 plan as you can pay the unsecured creditors the percentage assigned at Confirmation. Selling the house to pay off the plan before then will require paying the entire amount of unsecured claims.
6. Quit Claiming to investors. I wouldn’t do it. If you chose this option make sure you know the investor and can trust him or her.
7. “I am working with the mortgage company”. That is all well and good, but unless you have the money to reinstate or have received an order from the court stopping the sale, it is not stopped no matter how many packets you fill out or how many voicemails you leave your mortgage case worker. If the sale is two weeks away and nothing is changing you need to consult with a bankruptcy attorney. I have seen surprised people lose there home to foreclosure trying work with the mortgage company.
8. Save money to pay the bankruptcy attorney. You have not paid the mortgage for X number of months, surely you can stash $1,000 or more the get the Chapter 13 started to stop the foreclosure. I can not speak for all attorneys, but I will not take a Chapter 13 case without at least $1000 down.
9. Contact the bankruptcy attorney at least two weeks prior to the sale date, it will make things smoother for the attorney, you, the mortgage company and the courts. It is customary to charge extra for emergency filings. Make sure you gather all the documents required and complete the Credit Counseling Certificate. If you pay by check (I prefer cash or money order), I will take it to your bank and it if it is not good, I will not file and if you don’t fix it I will not retain you and will bill you, have your new attorney (if you can find one) notice me of your bankruptcy filing.
10. Face reality. If you cannot afford the mortgage even if you were caught up, you will need to downsize your housing cost. In a Chapter 13 you will have to make the regular mortgage payment according the terms of the mortgage, pay the arrears and foreclosure costs. The Chapter 13 payment will be higher. If you can’t pay the regular mortgage, how can you pay more in a 13 plan?
11. Consider surrendering the home in a Chapter 7. When you file a Chapter 7, the automatic stay goes in to effect and the sale is stopped and can not be rescheduled until relief of stay is sought in Bankruptcy Court. The process usually takes about two months and gives you time to get a rental deposit together and move so you can rent and relax.
12. If you don’t file and the sale has occurred you have 10 days to vacate before the eviction.
Subprime loans are loans usually given to those with poor credit histories. A homeowner’s faulty credit history, the loan?s high interest rate, hidden fees and other deceptive terms, make for a likely outcome: default leading to foreclosure. Subprime loans, although controversial, were very popular when the housing market hit its peak between the years 2004-2007. Banks and lenders took advantage of the housing rush and gave loans to everyone and anyone, the fact that they were “bad” loans is of no concern to them. Unfortunately, subprime loans are not illegal and may be considered completely legitimate loans. But, a recent study found that about 60% of homeowner’s who applied for mortgages were given a subprime loan, even though they qualified for a standard prime loan.
Predatory lending occurs when a lender deceptively convinces a borrower to agree to a loan with unfair terms. Predatory lenders also have the borrower sign paperwork for a loan, then turn around and give them another loan, leaving the borrower in the dark about the switch. Predatory loans can be given to qualified and un-qualified borrowers, but the terms are almost always impossible to meet, leaving the homeowner in default and foreclosure.
Luckily there is something a homeowner can do, but do not always realize. By hiring a foreclosure defense lawyer you may have a chance of reversing your foreclosure mess. Homeowners do not usually think that a lawyer can help them, but if you are the victim of a subprime or predatory loan, you do have the right to challenge the financial institution and regain some, if not all, of your financial freedom.
You need a strong legal team to sift through the tedious paperwork of your original loan, along with any other information received from your lender and bank. Several laws are in place to protect borrowers from predatory lenders.
These laws are your defense when it comes to holding your lender or bank responsible for your mortgage foreclosure:
Truth in Lending Act (TILA) Requires the lender to disclose everything about the loan in clear and understandable terms.
Real Estate Settlement Procedures Act (RESPA) Laws governing the closing costs and closing of the deal surrounding a loan for real estate.
Home Ownership and Equity Protection Act (HOEPA) an amendment to the TILA, it governs the dealings surrounding mortgage refinance loans and home equity loans.
Many state laws and regulations may also be in effect that can help you defend yourself against a predatory lender. By holding them responsible for their wrongdoings, you are not only forcing them to become liable for their predatory lending practices, but you are also giving yourself the opportunity to avoid foreclosure, the loss of your home and bankruptcy.
Other steps you can take to avoid foreclosure:
1. You can reinstate your home loan by paying off the default amount during a grace period known as pre-foreclosure. Most lenders will require this payment in full, although it is possible to negotiate a payment plan.
2. You can sell your property to a third party during the pre-foreclosure period. This will allow you to pay off your loan and avoid having a foreclosure on your credit history. The property is usually sold below market value.
3. A third party may purchase the property at public auction at the end of the pre-foreclosure period.
4. The lender may take ownership of the property (“repossession”), usually with the intent to resell it on the open market. The lender may take ownership of the property through an agreement made with the homeowner during pre-foreclosure or by buying it back through the public auction.
The foreclosure defense lawyers at Robert Aronov & Assciates, P.C. we understand that foreclosure is difficult and confusing. The processes of avoiding foreclosure are complicated and are usually best handled with the help of an experienced New York foreclosure defense lawyer. With a strong legal team on your side, you may have a better chance at avoiding foreclosure and saving your home.
WHEN FORECLOSURE IS YOUR ONLY OPTION:
Pre-Foreclosure: It is critical to remember that once you receive a complaint or demand for payment from your lender, you have very little time to respond before the lender may ask for a default judgment.
Foreclosure can be intimidating and confusing for most homeowners. By hiring the Roberts Law Partners we can assist in making the process easier for you. We may be able to negotiate terms with your lender, assist in the selling of your home and negotiate a short sale of your home. We understand that foreclosure is the last thing you ever intended when you were handed the keys to your home. By allowing us to work on your behalf, you will have more time to take care of you and your family.
THE FORECLOSURE PROCESS:
1. The homeowner has defaulted on the loan and the pre-foreclosure period has expired.
2. Foreclosure begins when the lender files a lawsuit against the homeowner suing for control of the property due to default on the mortgage. A copy of the lawsuit and a notice to appear in court are sent to the homeowner.
3. The homeowner must appear in court to explain why the mortgage has entered into default. In some cases, the foreclosure process can be stopped if terms are negotiated with the lender. If the homeowner does not make the court appearance, a judgment may be issued in favor of the lender, giving the homeowner no recourse to stop the foreclosure process. Regardless of whether the homeowner is present at the time of the court hearing, the homeowner must adhere to the rulings by the court.
4. At any point during the foreclosure period, up until the date of foreclosure sale, the homeowner has the opportunity to stop the foreclosure process by repaying the entire amount owed on the mortgage loan. The date of the foreclosure sale are outlined in the judgment issued by the court.
Contact the New York foreclosure defense lawyers at Robert Aronov & Assciates, P.C. for your free and confidential consultation on how we may be able to help you avoid foreclosure. If foreclosure is un-avoidable, contact us to find out how we can assist in making it easier for you. Foreclosures should not be handled without the aid of a strong legal team, so please call us today.