New York Foreclosure Defense Strategies

The best strategies to deal with a home foreclosure in Western New York

1.             Filing an answer to the foreclosure. Most people who receive foreclosure papers never hire a lawyer to defend the foreclosure. Why? I can’t say for sure, but after speaking with thousands of Western New Yorkers facing foreclosure, here are the three most likely reasons: (1) people don’t really understand how the foreclosure process works, (2) they think that hiring a lawyer is too expensive, or (3) they think they can work it out with the bank on their own. However, the truth is that most people can’t stop the foreclosure without the help of a lawyer, and the few people who do probably aren’t getting the best result possible.

                If you are served with foreclosure papers, the first thing you should do is hire a competent attorney to file a formal answer. This will dramatically slow down the foreclosure process, and it will show the bank that you are not going to give up your property without a fight. We have dealt with every major foreclosure law firm in the State, and we even have a full-time attorney on our staff who used to work for the State’s largest foreclosure law firm.

                The time periods to respond to the foreclosure lawsuit are very short. In fact, if the papers are hand delivered, your time to respond could expire in 20 days.  After that time, it may be too late to raise any defenses that you have.  If  you want to hire an attorney, you really need to do it within the first couple of days after the foreclosure is started so that the attorney has enough time to prepare the answer for you.

2.             Pursuing a formal loan modification. There are two types of modifications that banks offer. The first is a HAMP modification. This is the modification process that made headlines a few years ago when it was introduced by President Obama. It’s a great program if you are eligible because it can dramatically lower your mortgage payment and interest rate. We have seen clients obtain modifications that cut their payments in half and dropped their interest rates as low as 2. We can’t promise any specific result for you, but if you are eligible for a HAMP modification, the Bank has to approve you for  one. If you don’t meet the HAMP criteria, you may still be eligible for a other modification plans.

                Whatever you do, please don’t hire a loan modification company that advertises on television or online. Most of these companies are outright scams, and it is actually illegal in New York State for anyone other than an attorney to charge a homeowner in foreclosure any fees up-front for foreclosure defense. These out-of-town companies can’t represent you in the foreclosure action because they aren’t lawyers.  

3.             Settlement Conference Representation. You are entitled to a settlement conference with the bank’s lawyers, and this conference is conducted under the supervision of the court handling the foreclosure. This is the best opportunity we will have to strike a deal with the bank on your behalf. Why?  Because the bank will have to send a lawyer to the conference who knows the specifics of your case. This is a lot better than dealing with some low-paid customer service representative at the Bank who knows nothing about your situation and is probably handling thousands of loans. Most clients that we speak with tell us they have gotten nowhere when they tried to deal directly with the Bank.

                 When we appear for you at the settlement conference, we can physically hand the modification application to the attorney, and the lender must process the modification request before the Court will allow the foreclosure to proceed. If the attorney tells the Judge that the Bank is “still working on it,”  the Judge will postpone the foreclosure for as long as it takes to get an answer. Even if you aren’t eligible for a formal modification, we can still make a proposal to the Bank for you to get caught up on the mortgage payments. The Court can’t force the Bank to accept any proposal, but it can prevent the foreclosure action from moving forward if the Bank is not handling the case in good faith.

4.             Filing a chapter 13 bankruptcy. If you aren’t eligible for a loan modification, chapter 13 is a type of bankruptcy that can help you get caught up on your mortgage payments over a period of up to five years. You do not have to give the Bank any money up front, and you will definitely be able to keep your home if you don’t fall behind on the mortgage payments again and follow the terms of the plan we set up for you. Chapter 13 is also a smart way to deal with other debts that you may have, such as back taxes, delinquent car payments, and credit cards. It is rare that we meet a client who is behind on their mortgage and who doesn’t also have other bills. We will only recommend that you file a bankruptcy case if we believe it’s the best choice for you.