Foreclosure Defense
Mortgage Foreclosure Defense Information
BRIAN PONDER LLP represents clients facing foreclosure proceedings. In many cases, it is possible to stop the foreclosure, work out new financing arrangements, and otherwise manage a foreclosure in a manner most advantageous to the homeowner without litigation.
A foreclosure may be worth defending even if you have no equity in your home. In some instances, the principal balance of outstanding loans may be reduced or eliminated.
If your lender or loan servicer has not received monthly payments when due, you may be alleged to have defaulted on the mortgage and note (loan).
A default on a mortgage note may give the lender or assignee a right to seek a foreclosure, or sale of your home to satisfy the amount alleged due on the loan.
New York’s foreclosure laws protect you and your home when you face a foreclosure lawsuit. "Non-Lawyer assistance" programs and companies cannot represent you and protect you in a court of law against a foreclosure lawsuit or proceeding. You need a lawyer experienced in defending New York real estate foreclosure proceedings.
You must act quickly to avoid foreclosure on your home. You typically have 20 days to answer a New York foreclosure lawsuit. If you do not, you may be lose the case by default.
Foreclosure defenses that may be raised even if you have fallen behind on your mortgage payments may include the following:
1. Due Process:
Pursuant to procedural due process, you are entitled to full discovery and may demand the production by your lender of all documents and information in their possession and control which may affect your rights.
2. Rescission:
You may have legal rights pursuant to the Real Estate Settlement and Procedures Act. If you refinanced your home and your current mortgage was executed less than three years ago, you may still have the right to rescind the loan and cancel finance charges if your lender failed to provide your with timely disclosures.
3. Lost Notes:
Some foreclosure complaints may allege that the lender lost the note. Often the lender’s attorney fails to attach a copy of the mortgage note that you signed. The proper assertion of this defense may stop the foreclosure until the lender can supply a copy of your mortgage note.
4. Mortgage Electronic Registration Systems Inc.:
Often the foreclosure against you is brought in the name of MERS. Generally you have never heard of MERS, had contact with them and although MERS is seeking to foreclose your mortgage and alleges it is the owner of the note and mortgage, MERS in fact generally holds the mortgage as a nominee (whatever that is) for the true Lender who in fact holds and owns the Mortgage Note which you signed. The relationship of these entities may materially affect your rights and may be asserted by a foreclosure defense attorney.
5. Force-placed Insurance:
Where lenders purchase insurance in the mistaken belief that the homeowners have let their policy lapse. If the homeowners have their own homeowner’s insurance policy, they should not be paying for the lenders insurance.
6. Lost Payments:
Sometimes payments are not correctly applied to a buyer’s account.
7. Failure to Accelerate the Note:
The loan cannot be foreclosed until the loan is accelerated, if required, and notice must be sent to the buyer.
8. FHA-Insured Loans:
FHA loans have special servicing requirements, including a counseling notice mailed to the mortgagor within 45 days of default, a face-to-face meeting with the borrower within 90 days of default, and a notice of available counseling. Failure to comply with these rules is an affirmative defense.
9. Accepting Payments After Foreclosure:
There may be a defense to the foreclosure if the lender accepts payments after filing foreclosure, and the mortgagor is not in bankruptcy.
10. Truth-in-Lending and HOEPA Violations:
Truth-in-Lending and HOEPA violations may be raised as a defense. However, the most powerful remedy available -- i.e. voiding the mortgage is only available within three years of execution of the mortgage (if its non-purchase mortgage and required disclosures were not delivered to you). An attorney must review the original disclosure documents to determine if there was a violation, but failure to disclose material terms in writing, or high interest rates on a non-purchase mortgage, almost always warrant careful investigation.
11. Fraud, Abuse, Collusion:
Where the loan displays fraud, abuse or collusion, these may be possible defenses to foreclosure.
12. Fair Debt Collection Practices Act:
Attorneys who file foreclosure papers are debt collectors and must comply with the FDCPA. While not a defense per se to the foreclosure action, it does give rise to a statutory and actual damages claim.
13. Failure to Attach Note and Mortgage to Complaint:
The complaint is subject to a motion to dismiss if the note and mortgage are not attached to the complaint.
14. Incorrect Notice or Service:
Service by publication is only valid after an attempt at personal service. In order to be legally valid all information in the notice must be accurate.
Options We Explore for You:
1. Recision of the loan or loan modification
2. Counterclaims against the lender for violations of law
3. Quiet Title Actions
If you are facing foreclosure, don't resign yourself to having your credit ruined or having a Deficiency Judgment entered against you. I understand that sometimes life brings unexpected, unwanted surprises. Illness, lay-offs, divorce, loss in a law-suit or even just a cut-back in hours can suddenly make owning a home unfeasible. The most natural instinct is to hide from the bank and hope it will all just sort of work itself out.. but that approach is not the best one to take.
What you need: someone on your side accustomed to speaking with loan institutions to work out a win-win situation that lets you get a clean start while keeping your credit history intact for when you're finances improve.
Short Sale
Lenders can sue homeowners even after the house is foreclosed on or sold, to recover for any remaining deficiency. A deficiency occurs when the amount you owe on the home loan is more than the proceeds from the sale (or auction) -- the difference between these two amounts is the amount of the deficiency.
What if you have more than one loan? If you have a second or third mortgage (or home equity loan or line of credit), those lenders must also agree to the short sale. Unfortunately, this is often impossible since those lenders won't stand to gain anything from the short sale.
For a Free consultation, and legal assistance, call 646.450.9461 today.
