Foreclosure Law: Your Rights and Protections

New York Real Property Actions and Proceedings Law § 213 establishes the procedures for commencing foreclosure actions on residential mortgages. Under this statute, lenders must provide homeowners with specific notice requirements and opportunities to cure defaults before filing suit. Federal law, particularly the Truth in Lending Act and the Fair Debt Collection Practices Act, also applies to foreclosure proceedings. Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act imposes requirements on loan servicers regarding loss mitigation efforts and borrower communications. These statutes collectively create a comprehensive framework of protections under foreclosure law that homeowners can utilize in their defense.

Foreclosure law provides homeowners with numerous protections, including the right to receive proper notice, the opportunity to be heard in court, and the ability to raise affirmative defenses. Homeowners have the right to challenge the lender's standing to foreclose, meaning the lender must prove it owns or has the authority to enforce the mortgage. Foreclosure law also requires that all procedures be followed correctly, and any deviation from statutory requirements can result in case dismissal. Additionally, homeowners may have the right to request loan modification, forbearance, or other loss mitigation options before foreclosure proceeds to sale.

Before initiating a foreclosure action, lenders must comply with pre-foreclosure requirements established by foreclosure law. New York law requires lenders to send a notice of intent to foreclose at least 30 days before filing the lawsuit. This notice must include information about the homeowner's right to request a loss mitigation review and contact information for housing counseling services. The lender must also provide a clear accounting of the amounts owed, including principal, interest, and fees. These pre-foreclosure requirements under foreclosure law give homeowners an opportunity to address the default or explore alternatives to foreclosure.

Once pre-foreclosure requirements are satisfied, the lender files a complaint in the appropriate New York court. Foreclosure law requires that the complaint contain specific allegations, including the mortgage terms, the default, and the amount owed. The defendant homeowner must be properly served with the foreclosure complaint and summons according to the Civil Practice Law and Rules. Upon receiving the foreclosure action documents, homeowners typically have 20 or 30 days to file an answer or raise defenses. Proper service is critical under foreclosure law, as improper service can result in dismissal of the action or provide grounds for appeal.

Foreclosure law permits homeowners to raise substantive defenses that challenge the lender's right to foreclose. Lack of standing is a critical defense under foreclosure law, requiring the lender to prove it owns the mortgage or has authority to enforce it. If the mortgage was improperly transferred or the chain of title is broken, the lender may lack standing to foreclose. Other substantive defenses include claims of payment or tender, arguing that the homeowner has cured the default. Defenses based on fraud, misrepresentation, or violations of federal lending laws may also be available under foreclosure law. Additionally, homeowners may assert that the interest rate or loan terms were unconscionable or that the lender engaged in predatory lending practices prohibited by law.

Foreclosure law imposes strict procedural requirements, and violations of these procedures can lead to case dismissal. Defenses include improper service of process, failure to comply with pre-foreclosure notice requirements, and violation of the right to request a loss mitigation review. If the lender fails to provide proper accounting of amounts owed, this violation of foreclosure law may support a defense. Homeowners may also challenge the competency of witnesses or the admissibility of documents, particularly mortgage assignments and promissory notes. Procedural defenses under foreclosure law can be as effective as substantive defenses in protecting homeowner rights, especially when lenders fail to strictly comply with statutory requirements.

Competent legal representation is invaluable in foreclosure law matters. Attorneys experienced in foreclosure law understand the technical requirements of mortgage documents, the proper procedures for filing and serving foreclosure complaints, and the substantive law governing defenses. Legal counsel can file responsive pleadings, conduct discovery to obtain documents from the lender, and prepare for trial or settlement negotiations. An attorney familiar with foreclosure law can also identify violations of federal consumer protection laws that may entitle homeowners to damages or loan modifications. Professional legal assistance significantly increases the likelihood of a favorable outcome in foreclosure proceedings.