Covid-19….tenants not pay rent…owners not paying mortgage..tenants declaring bankruptcy.. the Courts being closed….the Governor stopping evictions.. the new Housing Stability and Tenant Protection Law of 2019 which benefits tenants and severely hurts landlords…

All of these events – in a very short period of time – have created havoc in the already complex world of foreclosures. The changes have been so rapid that many attorneys are unfamiliar with these problems and ill-equipped to give sound advise to their clients on foreclosure issues. If you are involved in any of these problems, you should select an intelligent attorney with vast experience in foreclosure matters and an attorney of the highest character, honesty and integrity.

The New York State Legislature has already passed many laws to assist homeowners and derail efforts by lenders to foreclose. Because of these laws, the chances of a lender successfully foreclosing on either residential or commercial property in a reasonable amount of time has come to a halt. Even at this time, the legislative is considering Bill 10533 (dated May 29,2020) to stop foreclosures for at least one year. The Bill provides that the lender has to continue to sending default notices and comply with other notice provisions to homeowners such as listing counseling agencies and state funded legal services. But the lender is powerless to enforce the mortgage – even if the foreclosure action has already started. In fact, the lender is required to participate in mandatory settlement conferences – when most are a waste of time and further prevent the lender from foreclosing in a reasonable period of time.

Foreclosures in New York are very time-consuming. Another method in which foreclosure are delayed in mortgagors interjecting multiple “affirmative defenses.” These could include (i) defendants were entitled to various specific notices and demands prior to the institution of a foreclosure action; (ii) the summons and complaint were not served in accordance with the requirement of CPLR 308 et. Seq. Upon necessary defendants; (iii) pursuant to RPAPL 1302, plaintiff was required to allege it is the owner of the note prior to commencement of the lawsuit. (iv) pursuant to RPAPL 1304, lenders are required to send homeowners with high-cost, sub-prime and non-traditional home loans a notice at least 90 days prior to the commencement of a legal action with said notice having to be in 14-point font, stating the number of days in default, the amount owed and the telephone number of the lender of service, and it must be sent to the borrower by registered or certified mail and by first-class mail; (v) that the lender failed to attach a list of at least five government approved housing counseling agencies in the homeowner’s geographic region that provide free or low-cost counseling; pursuant to RPAPL 1303, PRAPL 1303; (vi) the plaintiff failed to serve the “Help to homeowners in Foreclosure” Notice which was supposed to be served with the summons and complaint;(vii) that plaintiff lacks standing to maintain the action; that (viii) plaintiff failed to comply with the foreclosure prevention servicing requirement imposed on plaintiff pursuant to National Housing Act, 12 U.S.C 170x(c)(5) which requires all private lenders servicing non-federally insured home loans to advise borrowers of any home ownership counseling plaintiff offers together with information about counseling offered by the US Department of Housing and Urban Development; and (ix) statute of limitations.

If mortgagors are successful in one or more of these defenses, the lender may have to start the foreclosure proceeding all over again. In some cases such as statute of limitations, the lender may be permanently barred from enforcing the mortgage.

That is why the attorney would make a big difference in foreclosure defense. A competent attorney would not only save your house, but also your family, your life.

The Writer

Paul Siegert has been an attorney in good standing for 46 years, have taught continuing legal education courses to other attorneys on how to try lawsuits in New York, and have graduated from the Riverdale Country Day School, Wesleyan University and the New York University School of Law.