Under New York law, when a lender wishes to begin foreclosure proceedings against a homeowner, they must go through the courts. This is known as a judicial foreclosure proceeding. However, just because a lender has filed a foreclosure in the courts does not necessarily mean you are going to lose your home.
First Line of Defense: Produce the Note
Under New York State law, lenders who are attempting to foreclose on a property must produce the promissory note that was signed for your home loan. Typically, there are two documents signed at closing: The mortgage which gives the lender the right to place a lien on the home and the promissory note which is what obligates the homeowner to pay the mortgage. This is particularly important because oftentimes, lenders “sell” mortgages to servicing companies. In order to have standing to foreclose on a property, the party who is foreclosing must produce this note to show they own the promissory obligation.
If Note is Produced
Even if a lender is able to produce the note on your home mortgage, there are still other concerns that may invalidate their ability to proceed with a foreclosure. Some of these include:
- Invalid Service of the Summons and Complaint – two copies of the service must be sent in a manner that guarantees their arrival. This may be done by personally delivering the documents, leaving them with someone at your address or by certified mail. Any failure to use one of these approved methods could delay a foreclosure.
- Improper Notification of Rights – lenders must provide certain disclosures to borrowers before commencing an action or certain Notices with the Complaint. In addition, if one or more of the borrowers is an active member of the armed forces, they must be notified of their rights through the Service Members Civil Relief Act.
- Notifications Not Done in a Timely Manner – Each notice has its own time specificity concerning when and how they are to be served.
Homeowners who are facing potential foreclosure need to speak with an attorney immediately upon receiving a notification from their lender of their intent to foreclose to ensure their rights are being protected. There are numerous other potential defenses other than those listed here.
THE WORST THING YOU CAN DO IS IGNORE THE COURT FORECLOSURE DOCUMENTS AND JUST CALL THE BANK. WHILE YOU ARE TALKING TO THE BANK, THEY ARE SUING YOU IN A FORECLOSURE PROCEEDING IN COURT TO GET YOUR HOME. YOU NEED TO RESPOND IN COURT, AND FILE DOCUMENTS TO PROTECT YOUR RIGHTS. YOU CANNOT PROTECT YOUR RIGHTS WITH A PHONE CALL.