Consumer Foreclosure Defense

Long Island & New York City Consumer Foreclosure Defense Attorneys

Foreclosure is an event no one wants to experience since for many it is the ultimate threat to financial security and personal stability. The highly capable attorneys at Roman & Piccinnini know many ways to challenge foreclosure proceedings and protect you and your family from the substantial difficulties a foreclosure can cause. Aware that no two foreclosure cases are identical, we have developed a number of strategies to use in your defense and will carefully choose the one best suited to your individual case.

Viable Types of Foreclosure Defense

New York, like about half of the states in the U.S., is a judicial foreclosure state, meaning that lenders have to sue borrowers in order to enforce their rights concerning the mortgage. The foreclosure begins when the lawsuit is filed and the homeowner is “in foreclosure” until the court issues a judgment.

In the past, it was rare to mount a successful defense against foreclosure, but this is no longer true. The reason foreclosure defenses have become more viable is that there is increasing evidence of fraudulent real estate practices and predatory lending. This has made courts much more likely to side with the homeowner than the lender.

There are now many ways for our lawyers to help you fight foreclosure, including asserting that:

  • The mortgage terms are unconscionable, meaning shockingly one-sided and unfair
  • You (the debtor) are an active member of the military
  • The lender did not follow proper state foreclosure procedures
  • There is a serious error in the original mortgage document itself
  • The wrong party has been credited with your payments
  • The mortgage company has imposed excessive fees
  • The lender has made a major mistake in calculating the amount owed
  • The original lender engaged in unfair lending practices regarding state or federal law
  • There is no appropriate documentation of who owns the loan

The last item on this list is a common problem because loan are frequently bought and sold sequentially, involving a number of different banks, lenders, and investors. This can make it difficult for the lender to prove exactly who is now holding the loan and only the loan holder is permitted to bring legal action.

It is also possible that the court may decide that the mortgage the lender is trying to foreclose was based on predatory lending practices. This may occur if credit was extended without regard to the borrower’s ability to repay (through assessment of current and expected income and other financial obligations) or if the borrower’s income was never verified.

In New York State, there are special protections for those facing foreclosure on “high cost” mortgages. Roman & Piccinnini, therefore, may have the option of challenging the attempted foreclosure by raising the possibility that the lender has violated one or more provisions of state law.

Beware of Scams

It is essential that you get in touch with a reputable attorney and avoid scam. In New York State, some scammers will go as far as telling you that you need to transfer the deed to them in order to refinance your loan. Any money you pay to anyone other than your mortgage company will be money thrown away.

Loan Modifications

Once we understand your situation in depth, we may be able to work out a loan modification with your lender to save you from foreclosure. Bear in mind that the vast majority of lenders would rather get some regular payments from you than go to the trouble and expense of engaging in a foreclosure proceeding so they will typically be amenable to a reasonable compromise. It is important that you contact us as soon as you are aware you are in trouble because the earlier in the process you get in touch with us, the more options we will be able to present you with. The more time that elapses with you in default, the more likely litigation will occur.

Short Sales

Short sales became all too familiar during the Great Recession when many people were unemployed or had decreased incomes, and the housing market was tanking. Short sales can work well if you can’t pay manage your mortgage payments and/or are facing foreclosure. In a short sale the homeowner sells his or her home for less than the total debt balance remaining on the mortgage, and the lender agrees to accept this lesser amount as total payment of the mortgage. A short sale is one notable way to avoid foreclosure.

Generally speaking, the following criteria make a home eligible for a short sale:

  • The home market value must have dropped significantly
  • The homeowner must be about to default or already in default on payments
  • The homeowner does not have assets worth enough to pay the debt
  • The homeowner has suffered a bruising financial hardship

In many cases, the lender will agree to forgive the amount of debt that remains after a short sale, an amount known as the “deficiency.” In some cases, however, if no waiver has been signed before the sale, the lender can seek a judgment against the borrower to recover the deficiency. As long as you have a savvy attorney at your side during a short sale, you will be assured of not ending up on the wrong side of a lawsuit for the deficiency.

Short Payoffs

Short payoffs, like short sales, involve getting the lender to permit your home to be sold for less than the total debt you owe. The distinguishing feature between the two is that in short payoffs the former homeowner agrees to pay back the mortgage lender the difference between the sale price and the amount due on the mortgage. This is typically arranged with a promissory note, a down payment, and a payment plan.

In order for a short payoff to work, the following criteria must be met:

  • The borrower must be able to demonstrate ability to pay off the debt
  • The borrower must have a steady income and a good credit rating
  • The borrower must be current with mortgage payments

Cash for Keys

While “cash for keys” was somewhat undercover for many years, during the mortgage meltdown of 2007 which resulted in a large numbers of foreclosures, it became much more of a standard procedure for many banks. “Cash for keys” sometimes occurs when foreclosure is imminent, and the lender is eager to get you out of your home so the property can be sold and begin providing income again. In such a situation, the lender may be willing to actually pay you extra money to give them your home so that you will vacate the premises quickly. The “cash” they provide is meant to pay for your relocation, thus hastening your departure.

Deed in Lieu of Foreclosure

A “deed in lieu of foreclosure” is another way of avoiding some of the pain of a foreclosure. Essentially, it is a deal between the borrower who is in default and the lender. The lender agrees to take title to the property in exchange for canceling the foreclosure. The only possible sticking point for the borrower is that unless the negotiated agreement includes words to the effect that the lender is waiving rights to recover any remaining deficiency, the borrower remains at risk of being sued for that amount in the future. Once again, if one of our knowledgeable attorneys is working with you, you can rest assured that you won’t be facing a lawsuit after the negotiation.

Debt Negotiation and Settlement

A common method of settling a debt, even a mortgage, is debt negotiation and settlement. What this means is that the lender agrees, after careful negotiations, to accept a smaller payment than the amount owed. If the lender agrees to a settlement, the borrower, once he or she pays the agreed-upon amount, is considered to have paid the debt in full and foreclosure is unnecessary.

Litigation

As noted earlier, even if your home goes into foreclosure, with proper legal assistance, you may be able to defend against it. At Roman & Piccinnini, we have the tactical skills necessary to challenge the lender who is suing you for ownership of your home. In New York State, the Notice of Default starts the official foreclosure process. This notice is issued 30 days after your fourth missed monthly payment. From this point onwards, you have 2 to 3 months to reinstate the loan before the bank will commence a foreclosure action with the court. We are vigorous litigators so if other negotiations fail, we are well-prepared to defend your rights in the courtroom. Contact us today to schedule a consultation.

Roman & Piccinnini, PLLC serves clients throughout Nassau County, Suffolk County, The Hamptons, and New York City.