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Foreclosure is the procedure that a bank or other lender must follow in order to sell real property to satisfy a mortgage that is in default. In order to foreclose on real property in New York State, a lender must commence a foreclosure action in the Supreme Court in the county where the property is located. Banks generally will not commence a foreclosure action until the borrower is at least three months in default on a mortgage. However, many lenders will not start foreclosure proceedings until a considerably longer period of time has passed.
Contact the law firm of Andrew M. Doktofsky, P.C. at (631) 673-9600 if you have defaulted on your mortgage or if a foreclosure action has been commenced against you. Call Andrew M. Doktofsky, P.C. today to determine what your options are for defending against home foreclosure throughout the areas of Suffolk County and Nassau County, New York. This includes the Long Island communities of Deer Park, Babylon, West Islip, Bay Shore, Brentwood, Hauppauge, Huntington, Lindenhurst, and Hempstead .
If you are served with a summons and complaint in a foreclosure action, do not ignore it. This is the most common mistake that homeowners make. If you are served personally, i.e. the summons is handed to you, then it must be answered within 20 days of service. If served by alternate means, e.g. left on your door, or served on someone else in your household, then you will have at least 40 days in which to answer.
It is critical that the answer be prepared properly. All potential defenses and counterclaims must be asserted in the answer. Failure to do so may result in a waiver of those defenses and counterclaims. In order to protect your legal rights, you should retain an attorney experienced in foreclosure defense to answer the complaint.
One of the most important defenses to assert in a foreclosure action is known as “lack of standing”. This defense should always be asserted when a trust, loan servicer, or a bank other than the original lender, is named as the plaintiff in the foreclosure action. Mortgages and the accompanying promissory notes are routinely transferred between various entities, often without following the proper procedures. The plaintiff in a foreclosure action must prove that it was the owner of the promissory note and mortgage at the time that the foreclosure action was commenced. If it was not the proper owner, then it cannot maintain the foreclosure action. This defense is waived if not asserted in the answer to the complaint.
It is important to review the original loan documents and closing statement to determine if there are any violations of law that may be asserted in defense of the foreclosure action. This is especially important with subprime loans and refinancing loans. Possible defenses include violations of the federal Truth in Lending Act; federal Real Estate Settlement and Procedures Act; New York Real Property Actions and Proceedings Law; and the New York Banking Law.
Failure to answer the foreclosure complaint will most likely result in a default judgment granting the bank the right to sell your home. Although the foreclosure process is lengthy, the bank will eventually be able to sell your house at a foreclosure sale.
In all foreclosure actions in New York involving a one to four family residential property in which the defendant resides at the property, a settlement conference must be held. The court schedules the conference, which is to be held within 60 days of the date of filing of the Request for Judicial Intervention by the plaintiff.
The purpose of the settlement conference is to attempt to resolve the foreclosure action by means of a mortgage modification. It usually takes several conferences before a mortgage modification is offered to the homeowner, assuming the homeowner qualifies for one.
If the homeowner does not qualify for a modification, the foreclosure process will continue. The next step in the process is for the bank to ask the court for a judgment entitling it to proceed with the foreclosure, and for the appointment of a referee to determine the amount due. If the homeowner had answered the complaint (see above), the bank must move for summary judgment. The homeowner will then have an opportunity to respond to the proof that the bank has set forth in its request for a judgment.
If a judgment is granted, a referee is appointed to determine the amount owed. Once this amount is determined, the bank must bring a second motion asking the court to have the referee’s report confirmed and for permission to sell the property.
Once the court approves the sale of the property, the bank must advertise the sale in a newspaper designated by the court, at least once per week for four consecutive weeks, or twice per week for three consecutive weeks. The foreclosure sale is usually held at the town hall or county courthouse where the property is located.
The entire foreclosure process from start to finish takes a minimum of several months and usually much longer. Due to the high rate of foreclosures in New York State, the process has slowed down even further. Therefore, you should not be concerned about being forced out of your home shortly after receiving a summons. However, as detailed above, you must not ignore the summons.
The purpose of a mortgage modification is to allow a homeowner to remain in their home by modifying the terms of the mortgage. This may involve a combination of reducing the interest rate, extending the term of the loan, and capitalizing any arrears (i.e. adding the arrears to the remaining principal balance).
My office can assist you in the mortgage modification process. However, in reality, there is very little actual legal work involved in obtaining a mortgage modification. It is generally a matter of submitting certain financial documents to the lender. You must be persistent and patient.
If you qualify for a HAMP (Making Homes Affordable Program) modification, the goal is to reduce your monthly payment (principal, interest, taxes and insurance) to 31% of your gross monthly income. Your income includes your spouse’s income. You must be able to show that you have sufficient income to make the modified mortgage payment.
Be wary of companies that charge thousands of dollars to obtain a mortgage modification for you. They rarely can do anything for you that you cannot do on your own. In New York State, individuals and companies offering such services are prohibited from accepting payment before full completion of the services (NY Real Property Law sec. 265-b).
If you are in default on your mortgage, or are in danger of defaulting, it is imperative that you contact the mortgage lender or servicer to determine if you are eligible for a loan modification. The longer that you are in default, the more difficult it will become to modify your mortgage, as the balance to be repaid will grow larger every month.
For homeowners who have defaulted on their mortgage, a Chapter 13 bankruptcy can be one of the most powerful options available. A Chapter 13 bankruptcy allows homeowners to repay their mortgage arrears over a three to five year period. However, the homeowner must have sufficient household income to repay the mortgage arrears and the current mortgage payments. Consequently, filing a Chapter 13 bankruptcy to repay mortgage arrears is most suitable for people who fell behind on their mortgage due to a temporary loss of income.
A Chapter 13 bankruptcy also makes sense for homeowners that have other debts that can be discharged in the bankruptcy proceeding. Read more about Chapter 13 bankruptcy.
U.S. Department of Housing and Urban Development – The Department of Housing and Urban Development (HUD) is a federal agency that creates affordable housing and helps consumers understand housing and foreclosure laws. HUD's website provides general information for consumers concerning foreclosure, and resources for contacting foreclosure counselors.
Making Home Affordable – This site provides information, guidelines and forms for various government programs to assist homeowners facing foreclosure.
Contact the law firm of Andrew M. Doktofsky, P.C. today for a free consultation about defending a foreclosure action in Suffolk County and Nassau County, New York. He represents clients throughout North Bay Shore, North Babylon, Lindenhurst, Commack, Central Islip, Freeport, Long Beach, Amityville and surrounding areas. Andrew M. Doktofsky will help you determine what options may be available to you to prevent you from losing your home in foreclosure. Call (631) 673-9600 for a consultation about foreclosure defense in New York.
Contributor: Andrew M. Doktofsky