STOP FORECLOSURE!

New York Foreclosure Help

What Qualifies Neil E. Colmenares, Esq.
To Give You Advice On How To Stop Foreclosure?

Before entering private practice Neil E. Colmenares, Esq. represented mortgage companies in the mortgage foreclosure process. He stopped representing mortgage companies because he did not like what he saw happening and he much preferred helping homeowners Stop Foreclosure rather than helping the banks with New York Foreclosure.

For over a decade, Neil E. Colmenares, Esq. has helped homeowners Stop Foreclosure and keep their home. We encourage you to take advantage of this unique knowledge of both sides of the foreclosure fence.

What Are My Options If I Am In Foreclosure?

If you want to Stop Foreclosure, there are three general options: Work with the Bank, Answer the Foreclosure, or Consider Bankruptcy.

Work with the Bank – This option is viable if you want to negotiate with the Bank to Stop Foreclosure by entering into either a Modification, Forbearance, Short Sale, or a Deed in Lieu of Foreclosure. Please see below for a definition of these terms.

You do not need a lawyer to negotiate with the Bank on your behalf to Stop Foreclosure! Follow the link http://www.makinghomeaffordable.gov/ to get free advice from a HUD approved counselor to see if you qualify. They may be able to help you Stop Foreclosure. The application can be downloaded by clicking here. Furthermore, beware of any Stop Foreclosure Rescue programs in that they are probably scams.

Please note, the HUD approved counselors are not Attorneys. They do not know, nor can they advise you of all the Stop Foreclosure options available to you, nor do they see the “big picture” of your case. You are ALWAYS better off with an experienced Attorney representing you if you want to Stop Foreclosure. Call this office to schedule a consultation to see if the Work with the Bank option is in your best interest if you want to Stop Foreclosure.

Answer the Foreclosure – Answering the Foreclosure if the best way to Stop Foreclosure. A Foreclosure is a legal process that takes title to the property out of the Homeowner’s name and puts it back into the Bank’s name (or who ever purchases the property at the Foreclosure sale). Although this sounds simple, depending on the county you live, this can take almost a year to accomplish.

The most important thing to do when you receive Foreclosure papers is to retain this office to file an “Answer” with the Court if you want to Stop the Foreclosure or at the very least slow it down. By doing so, you preserve many rights that will otherwise be lost. For example, after an Answer is filed the Court will schedule a mandatory settlement conference with the Bank. With the help of this office you may be able modify the mortgage to a monthly payment that you can afford. We have enjoyed great success in helping homeowners modify their mortgages. This has Stopped the Foreclosure. Moreover, there have been cases in New York that have wiped out the mortgage all together for the Banks failure to act in good faith. This again has Stopped Foreclosure.

Another reason to Answer the Foreclosure is to make sure the Bank does not engage in unethical behavior during the Foreclosure. For example, in a recent case a Homeowner was awarded damages because the Bank entered the Homeowner’s property before the Foreclosure sale date. Although in this case the Foreclosure was not stopped, it was delayed to the homeowners benefit.

There are many steps that a Bank has to follow before it can Foreclose even if the Homeowner does not Answer. Here at The Law Office of Neil E. Colmenares, P.C., we make sure the Bank follows every single procedure the law requires it to do so. Many Banks assume Homeowners will not Answer and take various short cuts so they can Foreclose faster. When we catch them taking these shortcuts, the Court will either call them on it and make them prove what they are claiming (which normally means more time for the Homeowner in their home) or in extreme cases, invalidate the mortgage which allows the Homeowner to keep their home with NO mortgage. This will Stop Foreclosure.

Click on this link to view a New York Times article on the abuses of the banks in the foreclosure process. This is yet another reason to call this office to fight the foreclosure process on your behalf. http://www.nytimes.com/2010/10/03/opinion/03sun1.html To summarize, some banks have temporarily Stopped Foreclosure because of shady record keeping and falsifying documents.

The point to remember is that there are many things the Bank must prove before it can Foreclose on your home. If they cannot prove all the things the law imposes on them, this will Stop the Foreclosure. Do not assume the Bank is acting honestly—by retaining this office we will make sure the Bank has not taken any shortcuts and preserve your rights and Stop Foreclosure!

Consider Bankruptcy – There are generally speaking, two bankruptcy options:

Chapter 7 Bankruptcy is an option for most homeowners. Here are a few examples of homeowners who file Chapter 7 Bankruptcy who do and do not have have equity in their home. Equity is defined as the value of the home above what is owed on it.

Example 1 Homeowner with No Equity (This is the scenario most homeowners in New York face today):

“Bill Homeowner” purchased his home at the height of the real estate boom and paid $800,000 for his home in 2007 and took out a mortgage of $700,000 to pay for it. Today, his home is worth $500,000 but he still owes the bank $690,000. “Bill Homeowner” has three general options since his home has no equity?

A) If Bill is current on his mortgage, he can file Chapter 7 Bankruptcy and keep his home with no questions asked as long as he continues to make his regular monthly mortgage payments. The benefit of this option is that Bill gets to keep his home despite filing Chapter 7. Another benefit to Bill in this example is that if for some reason in the future Bill cannot make the mortgage payments after he files Bankruptcy and gets a discharge, the bank can no longer sue him personally since his personal liability on that mortgage will have been wiped out in the Bankruptcy. Here Bill gets the best of both worlds. He gets to keep his home and his personal liability on the house is wiped out.

B) Bill can attempt to modify his mortgage so that he can reduce the total amount owed to the bank. For this option, he should first try to modify his mortgage and then file Bankruptcy. Why? If after he files Chapter 7 Bankruptcy and he receives a discharge and he can not make the mortgage payments, the bank can only foreclose on the property–they cannot hold him personally liable since his personal liability would have been wiped out in the Bankruptcy! As a general rule it is better to modify the mortgage before filing Bankruptcy. An exception to this rule is the Making Homes Affordable program discussed above. In this example, Bill gets to keep his home with a lower principal due to the modification and his personal liability regarding the home is wiped out as part of his Bankruptcy discharge.

C) If Bill decides he no longer wants the home, he can file Chapter 7 Bankruptcy and surrender the house to the bank. This may be a good option for Bill if he ever wants to own a home in the future since his rental payment on his new apartment is likely going to be less than what he was paying for his overpriced mortgage. This monthly savings (after a year or two) can be a down payment on a new home that is reasonably priced. Bill should not have a problem qualifying for a mortgage after Bankruptcy because since Bill is entitled to only one discharge in Bankruptcy every eight years, this makes Bill a good credit risk to the banks since they know he cannot get rid of any new debt for at least eight years! Of course, the Bankruptcy is almost always an excuse to charge higher interest rates but since Bill was probably paying a high interest rate to begin with, he still comes out ahead. In this example, Bill will be able to own his new home with no mortgage in less time than if he had kept the original house.

Example 2 Homeowners with Equity (This is common for homeowners who have owned their homes for several years):

FYI- New York has what is called a ‘homestead’ exemption which means if you live in the five boroughs of New York, Long Island or Westchester counties, you can keep the first $150,000 in equity in your home despite filing Bankruptcy ($300,000 for married couples who live in and own the property jointly). If there is more than the homestead amount of equity and you file Chapter 7, you will have to “buy” that excess equity from the Trustee to keep your home or have the Trustee sell your home and you receive a check for the homestead exemption.

A) “John & Jane Doe” jointly own a home in New York with a $800,000 appraised value and a mortgage of $375,000. They have $150,000 in credit card debt. John & Jane decide to file Chapter 7 Bankruptcy. Since there is $425,000 in equity ($800,000 Home Value – $375,000 Mortgage) minus the $300,000 homestead exemption (this is $300,000 because John & Jane are married and live in the home), this leaves $125,000 in non-exempt equity. John & Jane Doe would have to pay the Trustee $125,000 (minus the costs of a hypothetical sale) if they want to keep their home. If they cannot pay the Trustee that amount, the Trustee would then sell their home and give them the first $300,000 in equity after the mortgage and administrative expenses have been paid. The balance of the proceeds of the sale of the home would go to pay John & Jane Doe’s credit card debt. Whatever John & Jane decide, they are able to get rid of their credit card debt!

B) ‘George Single’ owns a home in New York with a $700,000 appraised value and has a mortgage of $400,000. George has $100,000 in credit card debt. George decides to file Chapter 7 Bankruptcy. Since there is $300,000 in equity ($700,000 Home Value – $400,000 Mortgage) minus the $150,000 homestead exemption, this leaves $150,000 in non-exempt equity. ‘George Single’ would have to pay the Trustee $150,000 (minus the costs of a hypothetical sale) if he wants to keep his home. If he cannot pay the Trustee this amount, the Trustee would then sell his home and give George the first $150,000 in equity after the mortgage and administrative expenses have been paid. The balance would go to pay “George Single’s” credit card debt.

This is an oversimplification of the calculations in Chapter 7. In many cases, a homeowner could have much more non-exempt equity and still be able to keep their home in Chapter 7 with no re-payment to the Trustee. However, there is another option. Chapter 13 Bankruptcy.

Chapter 13 Bankruptcy is an option for people who want to keep their homes that have too much non-exempt equity. To qualify, the homeowner must have “regular income,” be able to make the regular monthly mortgage payment and a second payment to get caught up on the missed mortgage payments. Chapter 13 with limited exceptions stops the foreclosure process and gives you a breathing spell without the harassment of collectors and attorneys. How much you have to repay will depend on a variety of factors. If there is more than one mortgage and the value of your home does not exceed the amount of the first mortgage, you may be able to wipe out the second mortgage in Chapter 13!

Our Queens, Nassau & New York Mortgage Foreclosure Bankruptcy Attorneys and Lawyers will advise you on which Chapter of the Bankruptcy code is best for you, if any. Sometimes Bankruptcy is not the solution. Call us today to discuss all of your options. Remember, Stop Foreclosure dead in its tracks.

Definition of Terms:

A Modification is where the mortgage company adds the delinquent mortgage payments to your loan balance. This is usually added onto the final mortgage payment.

A Forbearance requires that the homeowner pay a part of the delinquent mortgage payments over a set amount of time in addition to the regular monthly mortgage payment. The objective here is to allow you to cure your default over a period of time.

A Deed in Lieu of Foreclosure is a voluntary surrender of the property without resorting to the foreclousure process. Under this option, you leave your home and surrender all ownership interests.

A Short Sale/Pre-Foreclosure Sale occurs when there is no equity in your home and you owe more than your home is worth. If certain conditions are met, the mortgage company may accept less that the total loan payoff. Under this option, you leave your home and surrender all ownership interests. However, there may be tax consequences which may or may not make this a viable option. Click here for information from the Internal Revenue Service regarding Home Foreclosure and Cancellation of Debt.

It is suggested you contact this office to discuss which option is best for you.

The most important thing to remember is the sooner you confront the Foreclosure, the more likely you will be able to save your home and Stop Foreclosure.

---

Click here to Contact Attorney Colmenares

For additional information about Bankruptcy, click here to read recent articles by Mr. Colmenares.