Debt Collection

After Surrendering in Bankruptcy, Contesting Foreclosure is not Allowed

After Surrendering in Bankruptcy, Contesting Foreclosure is not Allowed

Oftentimes, a Debtor files a Bankruptcy petition that will stay a pending foreclosure.  Should the Debtor seek relief under Chapter 7, all property of the Debtor becomes property of the Bankruptcy Estate and subject to disposition by the Chapter 7 Trustee, with court approval.  Should the Chapter 7 Trustee determine that there is no equity in the mortgaged premises, he/she will “abandon” the property, and title will then revert back to the Debtor.  The Debtor must then either pay the secured debt, or “surrender” the property to the Secured Creditor in satisfaction of, at least, the secured portion of the debt.

Payoff Letters: The Newest FDCPA Landmines

Payoff Letters: The Newest FDCPA Landmines

On December 3, 2015, the United States Court of Appeals, 11th Circuit, decided the case of Kevin Prescott v. Seterus, Inc., 635 Fed. Appx. 640, 2015 U.S. App. LEXIS 20934 (11th Cir. Fla. 2015) and held that the inclusion of estimates or anticipated costs that have not yet been incurred, in a payoff or reinstatement letter, is a violation of the FDCPA

How Bankruptcy Impacts New York’s Statute of Limitations

How Bankruptcy Impacts New York’s Statute of Limitations

As noted in my previous article, “Statute of Limitations,” New York’s six (6) year Statute of Limitations is tolled for the time the bankruptcy is pending, (CPLR section 204) and renewed for an additional six (6) year period if the debtor acknowledges the debt in writing. (GOL 17-101) 

Types of Short Sales—Part Three: FHA

Types of Short Sales—Part Three: FHA

In the first two parts of this series of articles, we discussed the short sale programs offered by HAFA (Home Affordable Foreclosure Alternatives), Fannie Mae (Federal National Mortgage Association; FNMA) and Freddie Mac (Federal Home Loan Mortgage Corp; FHLMC). 

Types of Short Sales—Part Two: Freddie Mac and Fannie Mae

Types of Short Sales—Part Two: Freddie Mac and Fannie Mae

In our last articlewe discussed the different types of short sales available and some of the details of the HAFA short sale program, in particular. In this article, we discuss some of the requirements and provisions of the Fannie Mae and Freddie Mac short sales.

Loss Mitigation: The Bankruptcy Process

Loss Mitigation: The Bankruptcy Process

In our last article, we discussed the Loss Mitigation procedures that occur in the state court, as part of the foreclosure process. In addition, Servicers are required to participate in Loss Mitigation within the Bankruptcy Court, once a Borrower files a Bankruptcy Petition. Since the Bankruptcy Court is a part of the federal court system, the process begins anew, regardless of what occurred at the state court mediation. 

Loss Mitigation: The NY State Court Process

Loss Mitigation: The NY State Court Process

Prior to 2008, a New York foreclosure would be completed in a year or less. While Loss Mitigation existed, it was not a formal process as it is today, it's something that Servicers did throughout the foreclosure process. This process, known as “Dual Tracking”, was intended to avoid delays in the foreclosure process should the Loss Mitigation efforts fail, but is now prohibited by the Dodd–Frank Wall Street Reform and Consumer Protection Act. Read about it by clicking into our previous article.

Enforceability (or lack thereof) of Due-on-Sale and Due-on-Encumbrance Clauses

Enforceability (or lack thereof) of Due-on-Sale and Due-on-Encumbrance Clauses

Due-on-Sale Clause

The Due-on-Sale clause contained in most mortgages provides that if the property secured by the mortgage is sold to a third party without the lender's consent, the lender has the right to demand full payment of the loan. Lenders require this so that any prospective purchaser will feel compelled to submit a complete application to them, in order to avoid the risk of a foreclosure based upon the default of failing to obtain the lender’s consent. The application will contain the purchaser’s employment, income and all other information the lender would obtain if the purchaser was applying for a new loan. If the bank is satisfied with the creditworthiness of the purchaser, they will consent to the sale. 

Recent Decisions Regarding New York’s Pre-Foreclosure Requirements

Recent Decisions Regarding New York’s Pre-Foreclosure Requirements

Failure to strictly comply with two of New York’s recently enacted consumer protection statutes affecting residential foreclosures, RPAPL 1304 and RPAPL 1306, which require a 90-day notice to be sent to the borrower, and specific information contained therein to be filed with the New York State Department of Finance within three days thereafter, have recently been reviewed and interpreted by the New York courts. 

What Is A Deficiency Judgment?

What Is A Deficiency Judgment?

When borrowers obtain a mortgage loan, they sign a Note, promising to repay the loan, and a Mortgage, that provides for the property to be sold at a public auction if they default, so the loan may be repaid from the proceeds of the sale. Sometimes, however, the property is sold at the auction for less than the balance due to the lender, resulting in a deficiency.

Loss Mitigation Prohibitions - It Ain’t Just Loan Mods

Loss Mitigation Prohibitions - It Ain’t Just Loan Mods

Many loan servicers are under the misimpression that the prohibition against dual tracking only applies to loan modifications. This is incorrect; it also applies to forbearance agreements, deeds in lieu of foreclosures and short sales.

Debt Collection Consumer Protection: It’s not just FDCPA!

Debt Collection Consumer Protection: It’s not just FDCPA!

My previous article on Debt Collection Consumer Protection described the protections afforded by the Fair Debt Collection Practices Act. There are also numerous other federal, state and local laws which provide additional protections for consumers.

Judgment Enforcement: What’s in your debtor’s wallet?

Judgment Enforcement: What’s in your debtor’s wallet?

Many litigation attorneys are very good at what they do - winning cases and obtaining judgments. But once they obtain a judgment, their clients are not always voluntarily paid what they have been awarded, and the judgment must be enforced. In order to do so, the debtor’s assets must first be located so enforcement proceedings can commence.

Strict Foreclosure: The Second Bite of The Apple

Strict Foreclosure: The Second Bite of The Apple

When a mortgage is foreclosed, not only are the rights of the owners of the property extinguished, but all rights of third parties who have subordinate liens or other interests are extinguished, as well as the property, which will be sold at the foreclosure sale “free and clear” of any such interests.