Have you missed
one or more
Do you foresee not
being able to make
in the future?
Are you living in
fear of foreclosure?
If you‟ve answered
„yes‟ to any of these
questions, you‟re in
the right place. Avoid Losing Your Home
Seminar: America‟s Housing Crisis
How to Avoid Losing Your Home
Peter Spino, Jr.
Senior Foreclosure Prevention Counselor
Community Housing Innovations, Inc.
Brooklyn Law School, JD 1996
Admitted in New York & Massachusetts
OVER COM ING FEAR IS YOU R
GR EATEST OBSTACLE.
BY COM ING HER E,
YOU HAVE D ONE THAT.
IT IS ONLY GOING TO GET EAS IER .
What the Federal Government is doing…
Prior to President Obama‟s recent “MAKING
HOME AFFORDABLE PROGRAM,” there were a
few lender and legislative attempts to help with the
Foreclosure Crisis, but they provided limited value to
Crisis Continues to Grow
IRVINE, Calif., April 16 /PRNewswire/ --
RealtyTrac(R) (www.realtytrac.com), the leading online
marketplace for foreclosure properties, today released its
U.S. Foreclosure Market Report(TM) for Q1 2009, which
Foreclosure filings -- default notices, auction sale notices
and bank repossessions -- were reported on 803,489
properties in the first quarter, a 9 percent increase from
the previous quarter and an increase of nearly 24 percent
from Q1 2008.
One in every 159 U.S. housing units received a foreclosure
filing during the quarter.
N.Y.S. Action: Residential Foreclosure Program
In New York, foreclosure filings increased 150% to
almost 39,000 homeowners since 2005.
Governor Paterson helped to legislate:
90 day pre-foreclosure notification period
$25 million counseling fund
New requirement that lenders meet with borrowers
Source: 6/20/08 www.lohud.com,“Fixing Mortgages” A Journal News Editorial
What is foreclosure in NYS?
BORROWER DELINQUENT - 2 to 3 months late with mortgage
Payments; although this timeframe has been greatly expanded recently.
90 DAY PRE-FORECLOSURE NOTICE – For all subprime and non-
ACCELERATION LETTER – Mortgage Default and entire balance
FORECLOSURE CASE INITIATED – Lender files a Lis Pendens,
Summons and Complaint with court.
ANSWER DUE – You have 20 days to answer if served personally and
30 days if by mail.
MANDATORY SETTLEMENT CONFERENCE – Must be held within
60 days from Lender filing proof of service for all subprime and non-
BORROWER ANSWERS – Borrower presents defenses and counter-
claims. Discovery begins and Lender will make a Motion for Summary
Judgment. If denied, there is a trial or settlement.
DEFAULT – When borrower fails to answer.
MOTION FOR ORDER OF REFERENCE – Lender makes this motion
and Judge will sign Order. Court appoints a referee to compute amount
owed by borrower.
MOTION FOR JUDGMENT OF FORECLOSURE AND SALE- Lender
submits this to court. Once signed, Lender schedules auction with
referee and advertises auction in newspaper.
AUCTION – The bank attempts to auction the property. If there is no
third party buyer, the Lender will take title. If the property is sold for
less than is owed, the bank may seek a deficiency judgment; although
we don‟t see this happening very often.
Defenses to Foreclosure
Standing and Capacity to Sue
Affirmative Allegation of Ownership
Defenses to Foreclosure
Banking Law Sec. 6-1 and 6-M
NY General Business Law Sec. 349
(Deceptive Practices Act)
Truth in Lending Violations
A loan based upon the appraised value of the
property without regard to ability of the
borrower to repay.
• Bank or Broker misrepresents income to the lender
• Bank‟s appraiser overvalues property
• Negligent Underwriting
• No Due Diligence
Ways of Perpetrating Loan Fraud
The The Rushing loans with
Failure to mortgage broker‟s the
broker purpose is borrowers borrowers
disclose who do not
terms and appoints an to ensure through
attorney to that the 100-page speak
conditions represent the loan closes contracts adequate
before loan borrower, and that without
closing an attorney
that attorney broker and fully who does
violates in fact lender explaining not speak
Reg. Z. represents receive their the
the broker. their fees. contents. borrower‟s
Ways of Perpetrating Loan Fraud:
When projected payment schedule is wrong
because actual payments due are higher.
Goals of the Foreclosure Defense
Goals of Foreclosure Defense
Delay the foreclosure for an extended
period of time
Better bargaining position for re-
negotiation of the loan, including possible
reduction of the principal amount.
crisis could have
Dean, UCLA Source:
School of Law The Wall Street Journal
June 18, 2008
Your foreclosure counselor, your
lender and you decide what to do
THERE ARE OPTIONS TO FORECLOSURE:
Deed in Lieu of Foreclosure
What You Can Do
OPEN THE LETTE RS . THEY D O N OT BITE.
CALL OR WRITE TO YOUR
LENDER’S (BANK’S) LOSS
MITIGATION DEPARTMEN T
If you‟ve just lost
Your lender may
agree to a
they allow the
delay payments for
a short period of Forbearance
made with a
lender to accept
less than amount
owed by a
borrower via a
sale of the
property to a
foreclosure. Short Sale
Similar to a short If you are speaking with a servicer
sale but the lender of loans, then you must go to
allows borrower to another lender.
obtain a refinance
at a lower loan Only a few lenders doing right now.
reducing principal Similar to refinancing but more
difficult and longer process.
DEED IN LIEU Lender agrees to allow a borrower
OF to sign the property over to the
FORECLOSURE bank without having to foreclose.
This used to be extremely difficult,
but now most lenders will at least
consider. Lender forgoes
The lender will agree to
add the amounts due to
the back of the loan.
This agreement consists
of adding the past-due
payments and penalties
to the remaining
principal, so that the
homeowner can pay off
the past-due amounts
over the life of the loan.
This is possible only
after careful debt
There are a lot of companies out there
claiming they can help you modify the
terms of your loan, for a fee.
CHI is funded by the New York State
Division of Housing and Community
Renewal to do this for you at no charge.
Modifications are not guaranteed and
you still must qualify.
MAKING HOME AFFORDABLE
Incentives have been put in place to
IF YOU encourage the banks the lower
QUALIFY payments to 31% of your debt
Lenders will generally lower your
interest rate as low as 2% for a 5-year
Lender may agree to extend the
term of your loan.
Lenders may consider reducing
the principal amount of your
mortgage; although not likely.
The plan provides for refinancing
of loans guaranteed by Fannie
Mae and Freddie Mac.
REQUIRED DOCUMENTS FOR
One month of paystubs
Two months of bank statements
W2 and/or tax return
Thank you all for coming.
PLEASE ASK QUESTIONS
AND TAKE DOWN MY NUMBER