Foreclosure Prevention

Experienced Queens Lawyer Representing Homeowners

Losing a home through foreclosure can be devastating. It can leave families homeless and unable to find affordable housing. It can ruin credit scores. In some cases, vulnerable individuals or families are scammed in connection with foreclosure. If you are trying to stave off foreclosure, it is important to work with a Queens foreclosure lawyer whom you can trust. Shane D. Scott is ready to provide compassionate and knowledgeable assistance.

What Happens During Foreclosure

A foreclosure is a lawsuit brought by the bank against you in the event that you default on your loan. In the lawsuit, the bank will try to establish that you did not make your mortgage payments. In order to initiate a foreclosure, the bank or lender needs to send you a 90-day notice at least 90 days before starting the case. The notice lets you know that you are in default and informs you about how much you need to pay to catch up. A foreclosure complaint will be sent subsequently. You will need to answer the foreclosure complaint within 20 days; if you do not answer, you can lose protections. However, there are other options besides foreclosure, and it is worth exploring them with an experienced attorney.

Loan Modifications

Loan modifications are agreements with lenders to alter loan terms to make the mortgage payments more affordable. The goal of a loan modification is to avoid foreclosure. With some loans, government incentives are provided to lenders to modify the loan. To be eligible for a loan modification, you must have experienced a financial hardship such that you cannot afford current house payments, you must have enough income to afford a reasonable mortgage payment, and the property should be your main residence. A foreclosure attorney in Queens can advise you on whether you meet these requirements. A lender or mortgage servicer is supposed to respond to your request to modify your mortgage within 30 days of your submitting all the documents that it requested.

The modification of a loan may involve lowering the interest rate, converting an adjustable interest rate to a fixed interest rate, forgiving or delaying part of the loan balance, waiving past fees, or extending loan terms for a maximum of 40 years. A mortgage servicer will examine what your housing expense would be after a modification to make sure that you can afford it; you are considered able to afford the housing expense if it is 25-45% of your income before taxes are taken out.

It can be appropriate to seek a loan modification once you realize that the bank is planning to foreclose, but it is important to be wary of scams and predatory schemes. Banks are required to follow certain requirements regarding loss mitigation; they need to make reasonable and good-faith efforts to work with you on solutions such as loan modification. If an agreement is reached and signed, the bank or lender needs to file paperwork that terminates the foreclosure action within 90 days.

Refinancing

Refinancing is another foreclosure prevention option that a Queens foreclosure attorney can discuss with you. It is distinct from loan modification. In a refinance, you will not keep and modify your existing loan. Instead, you will arrange a new, different loan that has more favorable terms or a lower interest rate. It can be difficult to obtain refinancing if you owe more on your loan than the current value of your home. In that case, it may be easier to try to obtain a short sale or a deed in lieu of foreclosure.

Short Sale

A short sale is appropriate if you owe more on your loan than what your home is currently worth. In a short sale, the lender agrees to let you sell your home for less than what you owe on it. All lenders that have an interest in the property need to agree to the short sale. A short sale can allow you to salvage as much of your credit score as you can.

Deed in Lieu of Foreclosure

It may not be possible to obtain a loan modification, refinancing, or a short sale. A deed in lieu of foreclosure also can prevent foreclosure and is less expensive. With this approach, you give the property to the bank or lender and move out. If it accepts this solution, the lender usually agrees to forgive the balance outstanding on the loan. However, this option is not available for people with second or third mortgages on their home; there is no incentive for the second and third lien holders to agree to the deed in lieu of foreclosure. Generally, a deed in lieu of foreclosure is less harmful to credit than foreclosure, but it can have negative tax consequences if the IRS considers the forgiven amount taxable income.

Retain a Foreclosure Lawyer in Queens

There are various methods that you may be able to access to prevent a foreclosure. The Law Office of Shane D. Scott represents homeowners who are concerned about losing their home and suffering damage to their credit. Call us at (800) 230-0744 or complete our online form.