Residential Mortgage Loan Foreclosure in New York
As a homeowner, you may find yourself struggling to make your monthly mortgage payment. This may be because you or a household member suffered a loss of employment or reduction in income, a contributing wage earner passed away, there was some unexpected increase in your housing or other expenses, the terms of your mortgage loan adjusted to become unaffordable or the loan was unaffordable at the outset.
As a result of the mortgage crisis, the federal government created several programs to help homeowners stay in their homes. While most of these programs have expired, many lenders and their servicers continue to offer loan modification programs to assist you in getting back on track before foreclosure is commenced. There are very specific and beneficial modification programs if your loan is owned by Freddie Mac or Fannie Mae or is guaranteed by the Federal Housing Authority (FHA) or Veterans Administration (VA). Many of the major mortgage loan servicers also have their own in-house modification programs.
Whether these programs are available depends on the entity for which the loan is being serviced. A loan servicer is the entity that handles all borrower-related decisions. The “investor” is the ultimate owner for whose benefit the servicer acts. The term “lender” is a general term that typically refers to both the investor and the servicer.
You may be able to avoid foreclosure by seeking a loan modification, a repayment plan, a forbearance or even a refinance with a different lender if you are not yet in default. If these options do not work for you, you may have to sell your home. If the home is worth less than the amount you owe on your mortgage, your lender may allow you to do a short sale. This is when you sell the home for the fair market value, but it is not enough to pay off the mortgage. Another way to avoid foreclosure is a deed in lieu. This is when you simply turn over the deed to the lender and walk away from the home. A short sale and a deed in lieu harms your credit score, but not as much as a foreclosure or bankruptcy.
Legal Editors: Thomas Tilona and K. Scott Kohanowski, City Bar Justice Center Foreclosure Prevention Project, December, 2017
Changes may occur in this area of law. The information provided is brought to you as a public service with the help and assistance of volunteer legal editors, and is intended to help you better understand the law in general. It is not intended to be legal advice regarding your particular problem or to substitute for the advice of a lawyer.
Our lawyers are screened and approved – they have all gone through an application and interview process. Each lawyer we recommend has been screened for significant experience, knowledge of ethics codes and rules, and law office practices, including customer service skills and handling of fees and billing.
When you call us, you will be speaking with an attorney. One of our attorney referral counselors takes your call and talks with you about your legal question, or reviews your online referral request. There is no charge to speak with one of our attorney referral counselors -- we’re here to help.