Your home is probably the biggest investment you will make in your life. In fact, the equity in your home may be something you depend on for retirement planning. Unfortunately, if you fall behind in your mortgage payments for some reason, you could lose your home, as well as the equity that you’ve spent years building up with on-time payments.
Maybe you lost a job. Maybe your neighborhood is bucking local and national trends and your home value is dropping. Perhaps you’ve become ill and have incurred too many expenses to keep up with everything.
There are dozens of reasons why someone could fall behind on mortgages, and unless your bank is incredibly kind, they probably won’t care what your excuse is. The good news is that in some situations, you may be able to mount a defense against foreclosure.
Failing to properly serve you could be your defense
In order to foreclose on a home in New York, your lender has to follow very specific steps. Many times, little mistakes can end up benefiting you, the borrower. Did your bank fail to serve you with proper pre-foreclosure warnings? By law, a lender must notify at least 90 days before beginning foreclosure proceedings. Failing to do so could provide you with a solid defense in court.
After all, how are you supposed to bring your mortgage out of arrears without proper notice that you have defaulted and could face foreclosure? More importantly, how can you prepare for a foreclosure in court if you don’t know you need to secure an attorney and mount a defense against losing your home?
Inaccurate figures could also help your defense
Similarly, your lender will also have to send a formal notice of foreclosure after that 90 days. The letter must include the current balance owed, as well as the amount you have failed to pay. If these figures are inaccurate, your lender may have to restart proceedings.
Have you been able to make partial payments or a lump-sum payment that isn’t reflected in this documentation? Has your lender inaccurately computed the full amount of the mortgage you have to pay off?
These kinds of mistakes can help you defend your home against foreclosure. If you are making payments, you need to check the documentation from your lender very carefully for mistakes about payment dates, payment amounts and the balance due on your mortgage.
Trying to work with your lender could help, too
Foreclosing is a protracted and expensive process for lenders. The typical foreclosure in New York takes about 15 months to complete. Lenders can also lose a lot of money in legal fees and a decreasing home value. This could incentivize your lender to work with you.
Sometimes, instead of going to court to defend against foreclosure, you may be able to negotiate a modification to your loan. If you can make payments more reasonable or bring your home value out from being underwater, you may be able to stay in your home instead of losing it.