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Foreclosures

What is a Foreclosure?

How is a Foreclosure proceeding commenced?

Why don’t I recognize the Name of the Plaintiff?

Why are there other people or entities named as Defendants?

If served with a foreclosure summons, what do I do?

How will foreclosure affect my credit rating?

Are there ways of avoiding foreclosure action?

Can I delay the foreclosure from going forward?

What happens to my house in a foreclosure proceeding?

Can I stay in my home after a foreclosure auction?

After a foreclosure auction, will I still owe the financial institution any money?

What happens if the house is sold for more than I owe in the foreclosure proceeding?





Q: What is a Foreclosure?

Foreclosure is the legal process by which a lender takes back the home from the homeowner to satisfy the mortgage. Foreclosure proceedings are usually initiated at some point after the homeowner is at least three months behind on his or her mortgage payments. At the end of foreclosure-process, the homeowners may lose their home at an auction sale.   However, there are many options available to help homeowners save their homes.   Therefore,  it is extremely important to hire an attorney experienced in foreclosure defense to protect your rights.


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Q: How is a Foreclosure proceeding commenced?

The financial institution will hire an attorney and serve the homeowner a summons and complaint.   If the summons and complaint was served personally on the homeowner, then the homeowner will have twenty days to respond.   If the summons and complaint was served through any other means on the homeowner, then the homeowner will have thirty days to respond.    If the homeowner does not submit an answer to the foreclosure complaint, then the homeowner will have defaulted in the foreclosure lawsuit.    A default in a foreclosure proceeding will allow the financial institution to proceed against the homeowner without the homeowner presenting a defense.


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Q: Why don’t I recognize the Name of the Plaintiff?

Most mortgage loans are sold by the originating lender into a trust (a pool of loans). The Plaintiff must be the party who owns and holds the mortgage and note.   The Trustee of the trust into which the loan was sold will be the Plaintiff in most foreclosure lawsuits since it is considered the owner.  The Trustee hires a mortgage servicer to manage the loan. You probably know the name of your mortgage servicer because you send payments to it. It is common for borrowers to think of the mortgage servicer as their lender. However, the servicer does not own the mortgage and note. Most borrowers do not know the name of the Trustee who owns their mortgage and note until a lawsuit is filed.


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Q: Why are there other people or entities named as Defendants?

Each borrower on the mortgage and loan is a defendant. If there are other mortgages or liens on the property, such as second mortgages, home equity lines of credit, or judgment liens (such as for medical costs or credit card debt), they will be listed as defendants in the lawsuit. They must be served with the summons and complaint because the lender is foreclosing on their rights in the property as well.


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Q: If served with a foreclosure summons, what do I do?

You should immediately contact an experienced foreclosure defense lawyer to help you submit an answer the foreclosure complaint.  If the summons and complaint was served personally on the homeowner, then the homeowner will have twenty days to respond. If the summons and complaint was served through any other means on the homeowner, then the homeowner will have thirty days to respond. If the homeowner does not submit an answer to the foreclosure complaint, then the homeowner will have defaulted in the foreclosure lawsuit.    A default in a foreclosure proceeding will allow the financial institution to proceed against the homeowner without the homeowner presenting a defense.


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Q: How will foreclosure affect my credit rating?

A foreclosure will have an extremely negative effect on your credit rating.


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Q: Are there ways of avoiding foreclosure action?

Yes, with the lender’s approval, a homeowner may apply for a loan modification or complete a short sale. Other options, such as bankruptcy, may also be available but it is pertinent for homeowner to consult with an experienced foreclosure defense attorney. A Bankruptcy proceeding may prevent a foreclosure proceeding from going forward during the pendency of the bankruptcy.


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Q: Can I delay the foreclosure from going forward?

An experienced foreclosure defense attorney will know how to utilize the legal system to delay the procedure from going forward which will allow their clients to stay in their homes for as long as possible.    


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Q: What happens to my house in a foreclosure proceeding?

If a lender is successful at the end of the foreclosure-proceeding, your house will be sold at auction or the lender will take back the title to your home.  In most instances, the Court will appoint a Referee to handle the foreclosure auction.


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Q: Can I stay in my home after a foreclosure auction?

You can stay in your home if the lender or the new owner wishes to enter into a rental agreement with you. If the lender of new owner does not enter into a rental agreement with you, they will commence an eviction proceeding in Landord/Tenant Court for the purposes of having you removed from your home.


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Q: After a foreclosure auction, will I still owe the financial institution any money?

It depends.  If the property was sold at foreclosure auction for less than what is owed to the financial institution, then the lender can obtain a deficiency judgment against a homeowner for the unpaid portion of your mortgage loan. A bankruptcy proceeding can be initiated to attempt to discharge this deficiency judgment.


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Q: What happens if the house is sold for more than I owe in the foreclosure proceeding?

If the property was sold at foreclosure auction for more than what is owed to the financial institution, then the Court will hold a surplus money proceeding to determine how much money will be returned to you.      In most instances, the Court will appoint a Referee to handle the surplus money proceeding.

 


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Judy S. Mock P.C. serves clients throughout the New York City metro area including Brooklyn, Queens, Manhattan, Staten Island, and Nassau County.



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