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White Plains, NY Foreclosure Defense Attorney

It is not a crime to fall behind on your mortgage. There is no reason to be ashamed, either. If you face foreclosure on your home or other real estate, it is simply time for you to take action. You can start by seeking help from an experienced White Plains foreclosure defense lawyer.

Michael H. Schwartz is the attorney you need to pursue changes in the terms of your mortgage loan, or a loan modification, and take all other steps to keep you in your home. He has never lost a client’s house or other real estate to foreclosure. This is an unequaled record for securing loan modifications.

If you are like most homeowners, the prospect of foreclosure is new to you. You need solid information – quickly. We completely understand. Here, we discuss several questions about foreclosure defense that many people have in White Plains, Westchester County and throughout New York. For a review of the specific facts of your case, call or reach us online today at Michael H. Schwartz, P.C. Our initial consultations are always free.

“Michael Schwartz is an excellent lawyer due to his personable demeanor, quick response to questions and speedy case filing. I would recommend him to anyone in need of financial help.” – Anonymous
A notice of foreclosure on a foreclosure defense attorney's desk in White Plains, NY.A notice of foreclosure on a foreclosure defense attorney's desk in White Plains, NY.

If you’re facing foreclosure, you’re probably looking for options – and the modification of a loan might be one choice on the menu. Contact our White Plains bankruptcy law firm today.

What Does 'Foreclosure' Mean?

Foreclosure is a legal process in which a lender – typically a bank – tries to take possession of a home or other real property after the borrower, or homeowner, has fallen behind on loan payments. A bank will usually begin foreclosure proceedings if a homeowner is three months, or 90 days, behind in payments. The process can take as little as 12 months or less.

It begins with the lender filing a document called a Lis Pendens (Notice of Pendency). In English, this means that the lender has a claim against your home and is working to take it away from you. If the foreclosure is successful, the bank will be allowed to take and sell the home at auction. This is why some people use the term "foreclosure" to refer to a house that a bank has taken back after a sale at the end of the foreclosure proceeding.

What Should I Expect in a Foreclosure Proceeding in New York?

If you fall behind on your mortgage payments, you should expect to receive a letter from the bank or its mortgage servicer. The letter will advise you of the missed payments and make arrangements for those payments. If you cannot pay what is due on the loan and make your account current, the bank or servicer will send another letter which informs you that the bank will “accelerate” or “call in” the loan. In other words, the bank will demand that you immediately pay the entire loan amount.

At this point, you may still pay what’s required in order to bring your payments up to date and prevent further proceedings. If you do not pay, an attorney for the lender will serve you with a complaint and summons. The complaint will describe why the lender is foreclosing. This complaint begins the foreclosure action.

If the lender's attorney serves you in person with the complaint and summons, you will have 20 days to respond. Otherwise, you will have 30 days to respond. If you fail to answer the complaint, you will "default" on the foreclosure proceeding. The lender can then proceed to take possession of your home.

In order to answer the complaint, you will need to have legal knowledge. That is why you should seek help from White Plains foreclosure defense attorney Michael H. Schwartz. He can take many defense to foreclosure steps on your behalf, including asking the bank to modify the terms of your mortgage and lower your monthly payments to an amount which you can afford.

How Soon Will the Bank Try to Foreclose on My Loan?

In White Plains, NY a mortgage lender may begin foreclosure proceedings on a borrower who falls three months (90 days) behind in payments. Some banks will wait for as long as four to six months (120 to 180 days) or even years before they resort to foreclosure. However, once your account is in arrears – even with one late or missed payment – you should expect to hear from the lender.

If your lender has not offered to work with you to help you get up to date with your mortgage payments, Westchester foreclosure defense attorney Michael H. Schwartz can provide a free consultation. During that consultation, he can review the financial problems that kept you from paying your mortgage on time and advise you about multiple foreclosure defense strategies that you may pursue.

Can a Foreclosure Defense Lawyer Keep Others from Learning About My Foreclosure?

Foreclosure is a matter of public record. Anyone can go to the courthouse to get information about the foreclosure or find this information online. However, if you contact Michael H. Schwartz as soon as you get behind on your mortgage payments and realize that catching up on those payments may be a problem, he can stop the foreclosure from happening. All of your discussions with Mr. Schwartz will be completely confidential.

Borrowers in White Plains and throughout New York may have several alternatives to choose from when it comes to staying in their homes. The sooner you seek expert legal counsel, the better your chances will be to avoid foreclosure proceedings. But if you wait too long to act, you could end up losing your home.

If the Bank Forecloses and Takes My Home, Will It Hurt My Credit?

A foreclosure will damage your credit rating. Any time you apply for a loan or new line of credit, your credit rating will play a key role. So, you should do whatever you can to protect that rating.

The higher your current credit score, the more impact a foreclosure will have on the score. For example, FICO (Fair Isaac Corporation) is the largest credit rating service. FICO credit scores generally range from 300 to 850, with 680 being considered “prime.” An even higher FICO score of 750 could drop by about 150 points after a foreclosure. A lower credit rating of 600 could fall by 100 points or more. A foreclosure will stay on your FICO credit report for seven years.

If the Bank Forecloses in New York, What Happens to My House?

When a lender forecloses on a mortgage, it divests itself of the home acquired through foreclosure by selling it at auction. Typically, the court will appoint a qualified independent party to handle the sale.

The lender or whoever buys your home at auction could decide to manage it as a rental property and rent it to you. However, in most cases, the new owner will begin eviction proceedings. So, you should expect that the new owner will seek a court order that will require you to vacate the property.

Additionally, if you are a homeowner in New York, you will be responsible for any amount that the bank does not receive after the sale of your home through a foreclosure auction. (A home sold at auction in a foreclosure typically brings in only 64 percent of its true value.) You can seek a discharge of the amount that you may owe by filing for bankruptcy before the foreclosure sale. This filing can prevent any tax on the amount which the bank does not receive in the sale.

In rare cases, the sale proceeds may satisfy the amount due on the loan and all foreclosure expenses. Some money may even be left over. If this happens to you, then you can seek to recover those excess funds through a legal action called a "surplus proceeding."

How Do I Avoid Foreclosure?

Your first step should be to contact experienced White Plains foreclosure defense lawyer Michael H. Schwartz. He will advise you of your options and develop a strong foreclosure defense for you. Those options may include:

  • Seeking a voluntary loan modification – You and the bank can enter informal negotiations. The bank may agree to a change in the terms of your mortgage, which will allow you to catch up and remain current with your payments.
  • Going through mediation – After a lender sues you in foreclosure, the lender must go through mediation before the lender can take any further action in the foreclosure proceeding. In mediation, a neutral third party who is trained as a mediator will facilitate negotiations between you and the lender.
  • Filing for bankruptcy – Bankruptcy halts the foreclosure process, which can give you time to find a solution to your financial troubles. Bankruptcy will also allow you to address credit card balances, car loans and other debt issues. Through bankruptcy, you may be able to modify your mortgage, reduce your interest rate, extend the payment terms, get forbearance (or forgiveness) of arrears, reduce the amount which you owe and/or repay the arrears over a five-year period. You may also choose to walk away from an unwanted home and become debt-free (with no tax consequences).

White Plains bankruptcy and foreclosure defense attorney Michael H. Schwartz can assist and advise you in absolute confidence if you are behind on mortgage payments and face foreclosure proceedings. He has helped thousands of New Yorkers facing financial problems to keep their homes and preserve their future financial well-being.

Short Sales Can Have the Same Impact

While a short sale may seem like a good way to relieve yourself of your mortgage debt while avoiding the foreclosure process, it will end up having the same serious impacts on your credit rating.

Under a short sale, mortgage lenders allow borrowers to sell their home for less than the actual mortgage amount owed and sometimes forgive the difference. BUT, you will be taxed on that difference.  According to if your home is sold at significantly less than the mortgage amount – which is often the case – it could have the same impact on your credit score as an actual foreclosure.

What are The Penalties for Foreclosing in New York?

In the State of New York, foreclosures are judicial proceedings. This means that mortgage lenders must sue you to enforce the loan secured by the mortgage and, ultimately, sell your home at auction.

During this process, the total amount of the debt you owe will be calculated, including the following costs:

  • The amount remaining on the mortgage
  • Any principal payment amounts
  • Arrearages, interest charges, and late fees
  • Foreclosure costs, including attorney costs and filing fees

Once the bank receives permission to sell the property, if the total balance owed is not received from the sale, you are left with having to pay the difference.  Even worse, you will be taxed for the difference as “imputed income” that you never received.

If that is not bad enough, your ability to obtain future credit will also take a huge hit.  According to a Bankrate report on foreclosure penalties, the default will appear on your record for the next seven years. This could prevent you from obtaining another home, and your overall credit score is likely to drop by 100 points or more.

What Are The Consequences of a Foreclosure in NY?

In addition to the damage to your credit rating and the balance you will owe, going through a foreclosure can have negative financial consequences in other areas of your life, including the following:

  • Employment ramifications According to a CNN Money report, employers are increasingly relying on credit reports in assessing job candidates. A bad credit score could prevent you from being hired for any type of upper-level or management position.

How Does Bankruptcy Help to Prevent Foreclosure?

By filing for bankruptcy, Westchester foreclosure defense attorney Michael H. Schwartz, P.C., can stop the lender from foreclosing. The foreclosure process will come to a halt. The lender will not be able to continue the process. The lender will not be able to sell your home. You will now be in control of your home.

After the foreclosure action is stopped, you will have several options to choose from. You can:

  • Repay the payments that you missed over the next five years.
  • Apply for a loan modification that a U.S. Bankruptcy Court judge will oversee.
  • Walk away from your home without owing a dime.

In most cases, we can also wipe out your credit card debt. If your house is worth less than you owe on your first mortgage, we can remove the second and third mortgages entirely.

A foreclosed house for sale in White Plains, New York.

Filing for bankruptcy is a better option than attempting to work things out with the “lender.” Michael H. Schwartz knows that the person calling you about your debt is not the actual lender. Instead, it is servicing company that is interested in racking up fees. When a person defaults on a mortgage, the servicing company reacts by piling on fees and charges. If the person is miraculously able to reinstate the entire mortgage and able to pay it all off with one check, the new payoff amount will still include all of the levied fees.

These servicing companies have no incentive to help you to save your house from foreclosure. They will run you in circles. All the while, the clock will continue to tick, and they will rack up more fees. At Michael H. Schwartz, P.C., we don’t play their game because we know the rules.

As you probably know, when you borrow money from a bank or a lending institution, you secure it with a mortgage on your home. What you may not realize is that if you borrow $100,000, you are really paying back $300,000 on a 30-year mortgage. The bank treats this as a $300,000 asset and sells off the secured transaction to debt buyers at a discount of its full value. The debt buyers then sell the mortgages to debt aggregators who create bond funds out of them and sell them on Wall Street to investors as higher interest bond funds (also known as mortgage-backed securities).

Don’t believe that the “lender” will work things out with you. Instead, when you find yourself facing mortgage foreclosure, turn to New York bankruptcy attorney Michael H. Schwartz for help with saving your house. He can put you in Chapter 13, for instance, and your credit will be no worse. In fact, it will be better. This is because bankruptcy is a superior alternative to foreclosure. Bankruptcy is guaranteed to work as long as you can resume making your monthly mortgage payment, and you can pay back the payments you missed over a five-year period. Usually, after a year of making the payments, you may refinance with a reputable company and get a lower interest rate.

Are your workout negotiations with your lender going nowhere? We are not surprised. But we can make it go somewhere in bankruptcy court. Under the Loss Mitigation Program available in the Southern District of New York (Westchester, Rockland, Putnam, Dutchess, Orange, Sullivan, Manhattan and The Bronx), we can request a court-supervised review and modification of your loan.

For example: Our law firm successfully reduced a 7 percent mortgage on a $580,000 mortgage down to only 2 percent for five years, 3 percent for one year and 4 percent for the life of the loan, and we placed almost $200,000 in arrears at the end of the loan.

Get Help from a White Plains Foreclosure Defense Attorney Today

At Michael H. Schwartz, P.C., our clients haven’t had a single discharge denied or lost a single home in foreclosure. Our firm can help you in saving your home. As one of the top-rated bankruptcy lawyers in New York, Mr. Schwartz can help you to keep your home and preserve your future financial well-being. You can fight foreclosure and get your fresh start. To learn more about the alternatives to floreclosure through a free case review, call or contact us online today.

To arrange for a free initial consultation with NY bankruptcy attorney at Michael H. Schwartz, P.C., call us toll-free at (800) 666-9743 or contact us online.