Sometimes financial situations surface involving homeowners that cause them to get behind on their mortgage payments. The foreclosure process in New York typically begins with service of a summons and a complaint from the mortgage holder. If personally served, homeowners have 20 days to generate a response or 30 days if service is executed in an alternate manner. It is best to retain the services of an attorney who practices foreclosure defense to evaluate your circumstances. This will allow you to be informed of potential options, defenses and other alternatives regarding how to proceed rather than having the lender receive a default court judgment. Here in New York, although the “financial crisis” has subsided, there are still many owners of homes in foreclosure. As of October 2017, the foreclosure statistics were as follows:

• Statewide: One in 1724 homes
• Suffolk County: One in every 660
• Nassau County: One in 839
• 5.6% of those active in foreclosure are now bank-owned

Contract & Financial Assessment

It is possible that your attorney may be able to reach a compromise to save your home. This first requires close review of your individual financial situation and determining your goals or objectives. All relevant mortgage documents should be reviewed for details that may exist that justify a potential legal defense based on the contract. It is critical to have an overall picture of the available options, initiate negotiations with the lender and execute a defense in court when needed.

Potential Grounds for Dismissal

In some instances your attorney may uncover reasons that may allow for dismissal of a foreclosure suit for one of the following reasons:

• Computational inaccuracies within the agreement that heighten the overall amount owed as a result of ambiguous fees, added penalties, or questionable provisions.
• The loan agreement was entered into by fraudulent means.
• The loan is deemed to be predatory and likely to default.
• The mortgage holder has demonstrated misrepresentation in the process.

Modification

There are a variety of potential options that involve modifying your mortgage agreement that may be a solution. This is commonly initiated by devising a plan for paying off past due amounts. In recent years many lenders have developed types of modification programs for struggling homeowners. Many of these allow for a decrease in the rate of interest associated with the loan or may involve a decreased or deferred monthly payment. An experienced attorney will seek to develop a “win-win” solution that will achieve the desired outcome.

Short Sale or Bankruptcy

Sometimes a lawyer in a foreclosure defense action will recommend to homeowners that they no longer stay in the home. This may be the result of insurmountable debt, a lack of lender willingness to negotiate, severe tax implications and others. One potential solution may be selling the home via a short sale or a deed in lieu. These generally will require lender approval. In other situations, your attorney may conclude that a bankruptcy option is best for your financial future or a “cash for keys” arrangement.