FORECLOSURE

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The recent surge in foreclosure cases in our city has been followed by real estate laws designed to protect homeowners. Our firm has been at the forefront of utilizing available programs to assist our clients with negotiating modification agreements, repayment plans, short sales, and deeds in lieu of foreclosure, to name a few. In addition, we have applied federal law to cease illegitimate foreclosures and/or to postpone foreclosures until the homeowner can reorganize their assets.

McKinley Onua enters this market with a primary and unique focus on implementing retaining homeownership. We are a full-service real estate law firm representing clients in the home buying/selling process, neighborhood disputes, deed or title issues, foreclosures, contractor disputes, eminent domain proceedings, zoning matters, predatory lending practices and landlord-tenant cases.

The Law

  • A foreclosure is a legal proceeding where a bank, lender or mortgage holder seeks court approval to sell real estate to recover money owed on a mortgage note.
  • The mortgage holder or bank is often an entity that lent money to the homeowner for the purpose of purchasing the property.
  • If the lender is granted a final judgment of foreclosure against the homeowner, a sale date is set. Notice of the auction sale is published in a newspaper and posted publicly.
  • If the foreclosure sale does not produce enough money to cover the balance of the remaining mortgage after the property is sold, a deficiency judgment may be issued. In other words, the borrower may still be responsible for what is owed after the sales price is deducted.
  • After the sale of a home at auction, the homeowner is required to vacate the premises or face an eviction proceeding.
  • Relevant Statute: Real Property Actions and Proceedings Law.

Protected Individuals

  • Residential and commercial property owners.

Potential Violators

  • Originating Lender, Servicer or Current Mortgagor Holder.

Protections Under the Law

  • Under New York State law, mortgage holders are required to send homeowners a Pre-Foreclosure Notice at least 90 days prior to filing a foreclosure case. Notices must be sent to the last known address of the borrower.
  • For foreclosure actions of owner-occupied residential property, the homeowner has the right to a settlement conference, if a final judgment of foreclosure has not yet been entered by a court.
  • A settlement conference is a meeting between the homeowner, the lender or its attorney and the judge or appointed referee. The purpose of the settlement conference is to bring the parties together to see if the case can be resolved.
  • In preparation for the settlement conference, we advise clients to bring all loan documents, income verification, payment verification, proof of insurance, property tax information, and a hardship letter, explaining the reason why the homeowner has fallen behind on payments. With these items, we can negotiate on behalf of our clients, through a process known as loss mitigation.
  • Options available through loss mitigation are loan modification, forbearance, short sale and deed in lieu of foreclosure. We may also be able to reach a settlement with the lender where we are able to resolve the foreclosure case outside of court.
    • Loan Modification – A loan modification is an agreement between the homeowner and the lender wherein the terms of the original loan agreement are changed or modified, in order to make the mortgage payments more affordable.
    • Forbearance – A forbearance is an agreement between the homeowner and the lender, wherein the lender agrees to accept payment on all or a portion of the current debt at a later date.
    • Short Sale – A short sale is a process by which the homeowner sells the property to a third party and the lender agrees to accept less than the full balance owed in satisfaction of the loan.
    • Deed-in-Lieu of Foreclosure – A borrower voluntarily turns the deed over to the lender in order to avoid foreclosure. In exchange, the lender agrees that the borrower does not owe any additional debt, and the borrower is able to walk away from the loan without a deficiency judgment and, at times, without a foreclosure on their credit report.
  • A homeowner always has the ability to prevent a foreclosure by reinstating the mortgage before the auction sale date. A borrower may reinstate a mortgage by paying all missed payments, in addition to all fees and costs associated with the foreclosure action.