What Can I do if I get a 90-Day Foreclosure Notice in New York City?

If you receive a 90-Day foreclosure notice in New York City, don’t panic, you can still find protection to save your home or mitigate the financial damage in losing it.  Every financial situation and foreclosure is different but the Federal Bankruptcy Code and New York State law allows you to immediately pause, prevent, or repair your foreclosure at the moment you file.

The process that mortgage lenders in New York must follow in order to foreclose on a lender is lengthy and complicated.  It requires numerous letters, settlement conferences and other technical details.  Depending on your specific mortgage agreement it’s possible to be only 90 days away from foreclosure with the very first notice you receive.  If you haven’t made effort to fix the problem in the next 90 days then your lender will file a summons and deliver a complaint to you.  At that point you will have about 30 days to answer the complaint.  With your answer a mandatory foreclosure settlement conference is held to try to settle the problem agreeably, oftentimes through mortgage modification.  If no resolution can be reached the lender will try to seek a judgment against you to subsequently foreclose and auction off your home.

If you have received a 90-day foreclosure notice but don’t know how to respond, or are concerned about reaching a modification agreement if you do respond then contact a bankruptcy attorney right away.  There are a number of ways to stop a foreclosure that a qualified bankruptcy attorney can assist with.  If modifying a mortgage fails your attorney can use many other methods to stop or stall foreclosure, – some through bankruptcy law, and others through mistakes your lender may have made.

Filing for bankruptcy will immediately halt a foreclosure through the “automatic stay” provision in the bankruptcy code.  Once any bankruptcy is filed a temporary halt is put on all creditors actions, including mortgage lenders trying to foreclose on your house.  This will buy some valuable time and if you file a Chapter 13 you may be able to permanently keep your home and catch up on past due mortgage payments though a 3-5 year repayment plan.  You will need to start making your monthly payment again, but the Chapter 13 wage earners plan will allow you to keep your home and repay your lender over time.  Chapter 13 will also eliminate or drastically reduce your other toxic debts so that you may focus on putting as much money as possible towards saving your home.

A qualified attorney might also be able to take advantage of mistakes made by your lender that would prevent them from foreclosing.  You may not have to file bankruptcy at all.  The Mortgage Electronic Registration System (MERS) has been shown to have been terribly problematic.  The sloppy robo-signings have forced an increase in foreclosure standards in New York and have left a lot of legal avenues in which to fight foreclosure in the situation that your lender does not hold the underlying promissory note.

Sometimes however, as sad as it may be it will make more sense to give up your property.  Instead of filing bankruptcy and saving your home,  your attorney may be able to help with loss mitigation strategies like a “short sale” or offering a “deed in lieu of foreclosure”.  In a “short sale” you sell your home to a third party for less than what is owed on the loan.  The mortgage lender agrees to take the proceeds of the sale and will release you from your loan obligation.  If you are unable to sell your home in a short sale you may be able to offer a “deed in lieu of foreclosure.”  Instead of selling to a third party and giving the proceeds to the lender you will voluntarily transfer the title of your property to the lender in exchange for relief from any future mortgage payments.

These loss mitigation strategies might help you avoid filing bankruptcy but they can be costly, and time consuming.  Filing for bankruptcy might still be the best option because it will further limit any liability you have in the foreclosed property.  Filing for Filing Chapter 7 for example will prevent the mortgage company from suing you for any deficiency in sale that may have occurred at a foreclosure sale.  The last thing most homeowners need after losing their home is to be sued by the foreclosing lender for the difference between the sale and the current market value.  It can really add insult to injury, and is like having salt rubbed into your wounds.  Aside from the trauma, you might simply not be able to repay your mortgage lender the difference.  Bankruptcy may be able to help.

If you have received a 90-day foreclosure notice you should speak with a consumer debt or bankruptcy attorney right away.  It may not be in your best interests to file, but even if bankruptcy is not for you a qualified bankruptcy attorney will be able to help save your home, or mitigate the damage in losing it.  If you live in New York and just received a foreclosure notice please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free foreclosure relief consultation.

This article is intended for educational purposes only.  By reading this no attorney-client privilege has been created.