FORECLOSURES
- Myths about foreclosure
- Why you should contact us immediately
- Foreclosure overview
- How we have helped thousands of people
- These are your rights
- Pre-foreclosure notice
- Bankruptcy as an alternative
- What if I don’t want to file for bankruptcy?
- Deed in lieu
- The foreclosure process
- Difficulties with foreclosure
Myths about foreclosure:
Myth: The bank benefits from foreclosures
Truth: The bank does not want a foreclosure. Rather, they want the money back that you borrowed to mortgage the house -- with added interest. A foreclosure is bad for lenders too. When a lender forecloses, the sale of the property rarely allows the lender to recover the amount of money originally loaned. A bank will bend over backwards to work with homeowners through loan modifications, deeds in lieu, short sales, and bankruptcies all in an effort to avoid a foreclosure.
Myth: I have received a foreclosure notice and must move out now.
Truth: Even if foreclosure cannot be avoided, you do not have to immediately move. Before you are expelled, you must attend an eviction hearing. If you can take action early enough in the process it is possible to stop the foreclosure. Unfortunately, if all opportunities to stop the foreclosure are not taken you will eventually be physically removed.
Myth: If I go through foreclosure, I can never buy a house again. My credit will never recover.
Truth: The harsh truth is that a foreclosure is viewed as
one of the worst things for a bank to see when determining qualifications
for a loan. If you want to receive another loan for a house at the
typical going rate, you should expect a 4-7 year wait, and sometimes
longer, in order
to rebuild to a satisfactory credit rating. Of course, this is with
the individual working hard to re-establish their credit. However,
some banks are willing
to give an individual a loan soon after a foreclosure. These loans
usually have large down payments and high interest rates, and are
frequently referred
to as subprime loans.
Myth: Homeowners can come up with all sorts of creative ideas for stopping
foreclosure, and the bank will go along with them because they want to
avoid foreclosure as well.
Truth: Banks are bureaucracies that have specific procedures and
protocols that cannot be circumvented. Unfortunately, most homeowners who
try to "get creative" are not working with an experienced foreclosure
attorney, and are not taken seriously by the bank.
Myth: I must do everything I can to save my house and continue to live in it.
Truth: If your situation is one in which you are sick of
your home and the anguish it has brought you, there are specific
actions you can take to not only avoid foreclosure, but also move
out of your home. This
is done through a process known as "deed in lieu of foreclosure". Here,
the house is given back to the lender and both you and the lender
walk away, avoiding foreclosure. This is RARE in New York.
Myth: The bank isn’t really expecting me to pay their legal fees too, right?
Truth: Yes they are. As unfair as it may seem, once the foreclosure is finalized and your property is seized, you will be billed for the attorneys the bank retained to litigate your case for them. These fees usually are not cheap either; another reason to seize all opportunities to avoid foreclosure.
Why you should contact us immediately:
When a lender files suit against you in a foreclosure case, you have 20 to 30 days to create a response to the complaint made by the lender, depending on how the papers were served. Throughout this time you must:
- Formulate a defense and a reason for why you missed payments;
- Decide what alternatives are viable and the best for you and your situation and;
- Review your mortgage contract.
This process tends to be overwhelming for many people. As we have helped thousands of clients successfully defend themselves and their properties against foreclosure, we can help you.
Foreclosure overview:
A foreclosure is what occurs when the mortgager is unable to keep their promise to the bank or lender that has a lien on their home to pay their mortgage payments on time. The lender then takes legal action to gain ownership of the property, in an attempt to sell the property as a means of satisfying the debt. Once this process is complete the homeowner loses all rights to the property and, if necessary, will be evicted. This unfortunate series of events can be avoided with the right preventative steps.
How we have helped thousands of people:
The lender is not permitted to file a lawsuit against the borrower without any warning. Once the suit is filed, the homeowner is asked to appear in court and answer to the notice of foreclosure that was served upon them. While anyone can appear in court without a lawyer, the homeowner would benefit from representation by an experienced foreclosure attorney. With our assistance, a homeowner can prove that their property should not be foreclosed upon. Additionally, we can help the borrower negotiate terms with the lender and possibly avoid court altogether.
These are your rights:
Defending a foreclosure without a lawyer is often a losing battle. Our firm believes that you should not attempt to defend a foreclosure lawsuit pro se unless you have experience in real estate and foreclosure matters. The law governing the foreclosure process is complicated and complex. You have a legal right to retain the help of an attorney to counsel you in this time of need. Our firm is adept with the law governing the foreclosure process. There are many different aspects of a particular case, including the type of foreclosure, the various deadlines and timeframes, and the impact the foreclosure will have on you. During a free consultation, we will analyze your situation and determine what actions are necessary and appropriate to help you reach the best possible outcome.
Pre-foreclosure notice:
A pre-foreclosure warning is a notice sent out to at-risk borrowers by lenders and servicers 90 days prior to initiating foreclosure. Throughout the entire state, Suffolk County, followed by Queens, and then Nassau, has the highest number of notices sent out since the law mandating these warnings was initiated. These notices provide the homeowner with a formal warning about a potential foreclosure, giving you time to get help before you fall too far behind to recover. This is where our team of experienced attorneys can help. We can provide you with the advice and expertise you need in order to avoid the hefty fees and devastation that entails foreclosure. If you have received a pre-foreclosure notice the time to act is now, don’t hesitate to obtain the proper legal advice that will ultimately save your money and your home.
Bankruptcy as an alternative:
If you are served with a notice of foreclosure, the feeling can be overwhelming. The threat of losing your home is like a cloud hanging over your head, and is difficult to escape without the right help. Our team can help you during this troubling time. Bankruptcy can be an option for those that are dealing with foreclosure. We will determine if bankruptcy is the best option for you.
Once a bankruptcy is filed, the lender can no longer legally contact the borrower for payment, often opening the door to negotiations and may provide for an alternative to losing your house in a foreclosure.
What if I don’t want to file bankruptcy?
Bankruptcy is an ugly word for many people. It is also not for everyone; for many people, other methods work better for their specific situation. Fortunately, for those faced with foreclosure, there are other options if you do not wish to file bankruptcy. Legal and real estate procedures such as short sales, deeds in lieu of foreclosures, and loan modifications are all viable alternatives to both bankruptcy and foreclosure.
Short sale:
In a short sale, the homeowner is allowed (by the lender) to sell their property for a price less than the mortgage. While the sale price is typically lower than the balance on the mortgage, the lender will usually agree to a short sale because it is typically better for the lender than a foreclosure.
Short sales are utilized by homeowners to avoid foreclosure and bankruptcy. Engaging in a short sale halts the foreclosure process, and typically immunizes the borrower from any further lawsuits from the lender. For those that do not qualify for a loan modification, the short sale is an option; it is a way to cut financial exposure after the short sale.
Deed in lieu of foreclosure:
A deed in lieu of foreclosure is when the homeowner gives a property back to the lender. This is not common in New York for a primary residence. This usually occurs when the homeowner cannot afford the mortgage anymore, and cannot make payments to become current on the mortgage. The lender then sells the property for whatever it can get. The homeowner walks away from the problem. In a free and confidential consultation, our firm can discuss your particular case and situation, and determine if this is the correct course of action for you and your property.
Loan modification:
Loan modifications are often available for individuals who have fallen behind on their mortgage payments and are now facing late fees, interest, and other penalties on top of what they have already failed to pay on their original balance. We can negotiate with your lender to work out a new payment plan. This process is often successful in producing situations where, over time you become current with your mortgage and are able to keep your home.
The foreclosure process:
Foreclosures can be traced back to missed mortgage payments. This may have occurred as a result of a job loss, increased interest rates, or the addition of a second mortgage. After the homeowner misses a few monthly payments, the lender will file a foreclosure lawsuit. Once served notice, you are required to respond within 20 or 30 days. This time is critical since a good defense can buy you the time needed to review alternatives and options.
While you can file a response yourself, it is highly recommended that you consult a lawyer before responding. Not responding, or responding with an inadequate response, could eliminate any chance you have to effectively defend against the foreclosure. On behalf of our clients, our firm has successfully responded to hundreds of foreclosure notices, and we hope we can do the same for you.
Difficulties with foreclosure:
There are “wolves in sheep’s clothing” out there that ensnare Americans every day. Traps in the form of scams, predatory lending, and subprime loans may seem like beneficial options for homeowners facing foreclosure. However, these traps eventually will destroy your credit and even steal your money.
Scams:
Given the current state of the economy, there are an increased number of people who prey upon those in dire straits when it comes to their mortgage and impending foreclosure. Some policies and contracts you are presented with may in fact be detrimental to your situation. You may end up losing money or your property.
There are two common types of scams. One involves the homeowner signing a legal contract turning over ownership of their home. Of course, the homeowner is not doing this willingly. In these instances, the signer does not read or understand the contract, or the scammer leaves out certain parts of the contract and adds them post signature. Another scam involves a fake debt relief company persuading a homeowner to pay them to “work with them” toward the defense of a foreclosure. In most of these scenarios, the work that the company does can be done by the homeowner themselves and does not even lead to a better outcome to the foreclosure case; the homeowner is essentially throwing money away.
It is important to review any contract that will “help” you with your foreclosure situation with an experienced attorney before you sign it.
Predatory lending:
Some lenders are unethical, unfair, and deceptive. They will deceive you into entering into a contract on a loan with detrimental terms. These lenders fall into the category of predatory lenders. In some cases, lenders or brokers have not only misled borrowers but have also altered documents after they had been signed. Consequently, many homeowners who fall victim to predatory lending end up facing non-negotiable high interest rates and default on their mortgage, leading to foreclosure.
Predatory lending is illegal, and the law is on your side.
Subprime loans:
Many people that do not have good credit are faced with few options when it comes to obtaining loans and taking out mortgages. Often, they end up with a loan bearing a high interest rate because their credit rating does not qualify them to receive the current premium rate. Over the term of the mortgage, the high interest rate accrues into exorbitant amounts, sometimes climbing higher than the actual principle of the original balance of the mortgage itself. Fortunately, subprime loan borrowers have options. Bankruptcy can wipe your debt slate clean, and will erase the months or years of high interest payments that you may have missed. There are alternatives to a foreclosure due to subprime loans. Contact our firm so we can help you determine the best solution to your loan situation.
Ronald S. Cook is a Bankruptcy Attorney that proudly serves New York City, Manhattan, Nassau County and Suffolk County on Long Island, New York, NY. We offer reasonable rates and payment plans. CALL US TODAY AT 631-265-0102 or EMAIL US FOR YOUR FREE BANKRUPTCY REVIEW.