Responding to summons and complaint, and subsequent steps in foreclosure cases

Question: My bank is suing me because I have not paid my mortgage for about a year. These are the reasons I am not paying my mortgage: 1) I applied for loan modification, but the bank never approved it, 2) for personal reasons, I fell into financial hardship. The summons and complaint letter I got from the court states that I have 20 days to respond. What should I state in my response? In other words how do I proceed? My main concern is that following this foreclosure process I might end up with a larger debt than I had originally.

Response: When you personally get served with the summons and complaint, you get 20 days to answer unless you call the Plaintiff's firm and ask for an extension to file an answer. Generally, such requests get granted if you don't wait too long. In your answer, you must answer to every allegation in the complaint, either by admitting, denying, or stating that you don't know the answer. If any paragraph of the complaint remains unanswered, it will be considered true and admitted. Once you answer the complaint, foreclosure action cannot take place because of your default. You will be put on notice of every legal proceeding in your case. You will have an opportunity to oppose Plaintiff's motions, as well. In New York you will be placed in the mandatory settlement conference part, where you and the lender will have to negotiate in good faith to try to settle the case, i.e., modifying the loan (if you qualify). Essentially, you have to figure out what's most important to you--saving the home or getting rid of the debt as quickly as possible. If your priority is to save your home, then you will have an opportunity to do so in court settlement conference part. If your goal is to get rid of the debt (and the house) as soon as possible, then you can either do a short sale or a deed-in-lieu of foreclosure. Regardless of what you decide to do, you should still put in an answer to the complaint. Consult with a professional attorney, who could advise you of your legal rights.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
Copyright © 2015 Law Office of Svetlana Kaplun, P.C.
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Extension on foreclosure sale in New York

Question: After the court has issued a foreclosure sale date, is it possible to get an extension in New York? The bank dragged out my short sale until the last day and then declined the offer. I was also told by the court that I would be able to get an extension but when I attempted to get one a few days later, the court told me there was no sale date on the calendar and once it was entered then I could file for an extension to complete a deed-in-lieu. Now my goal is to try to get a deed-in-lieu and keep this foreclosure off my credit report.

Response: If you initiate the deed-in-lieu process with the bank, they are likely to hold off on the foreclosure sale for now. In New York, there are many procedural steps that the bank must take in order to actually have the sale go through. If you have a foreclosure sale scheduled and need to stop it on an emergency basis, then filing for bankruptcy is the way to stop the sale. However, if you are afraid of having foreclosure appear on your credit report, then you are not likely to agree to bankruptcy either, but it is a good idea to know your options regardless. Consult with an experienced attorney to determine the best course of action for you at this time.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
Copyright © 2015 Law Office of Svetlana Kaplun, P.C.

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Qualifying for Deed In Lieu of Foreclosure

Question: We walked away from our house as we could no longer afford it. The interest rate on our mortgage was unreasonably high by today's standards and still our bank was not willing to renegotiate the terms. Therefore, we have been out of the house for several months now. At this point we would just like the bank to proceed with foreclosure and take possession of the house, but it's not happening. We heard about a process called "Deed in lieu of Foreclosure". How do we go about this or see if we qualify?

Response: Foreclosure is a complex, legal process. Just because you stopped making payments and physically walked away from the house does not mean that the bank can just take the house away. The bank must initiate a lawsuit and follow all the proper legal procedural steps before it can get to the actual sale of your home. By executing a deed-in-lieu of foreclosure, you can expedite the process. Essentially, by doing a deed-in-lieu, you are transferring the title of your house to the bank, thus avoiding foreclosure and all the fees and costs that the bank accrues as a result of having to sue you. However, there may be tax consequences, depending on the value of your home at the time the transfer takes place. Generally, a deed-in-lieu is a better alternative than foreclosure if you have no intentions to save your home. As a side note, please take into consideration that if foreclosure action would take place in New York, there are mandatory settlement conferences in New York, whereby banks are bound to negotiate with the borrower in good faith, and it is oftentimes, easier to negotiate with the bank and have the interest lowered than going through the court process. Furthermore, it is important to note that a deed-in-lieu still places the headache of re-selling the property on the bank. Therefore, the lender might not agree to a deed-in-lieu unless the homeowner has tried all other loss mitigation options first, such as short sale.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
Copyright © 2015 Law Office of Svetlana Kaplun, P.C.

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