The most common scenario is when a homeowner is facing foreclosure. A foreclosure may occur when a mortgage is unpaid, or when property taxes are not paid. In such cases, the homeowner is entitled to at least ninety day’s notice prior to a foreclosure action being filed with the Court and an action is commenced in the Supreme Court located in the county in which the property is located.
The commencement of a foreclosure lawsuit give the potential predator an opportunity to pounce. Because such lawsuits are public records, any individual or company can look up in the Courthouse or on e-courts and see the location of properties which are in foreclosure, and the name of the individual homeowner in each foreclosure case. After the information is harvested, the company may then contact the homeowner with a “rescue scheme,” in which they claim they will “save the property” from foreclosure. They may advance a small sum of money, with the promise of more advances, if the homeowner will execute certain documents. The documents, rather than being innocuous, may allow the schemer to transfer the property from the homeowner to the “rescue company.” After the property has been transferred, the company may then quickly “flip” it to an unwitting buyer, while the original homeowner has been deceived into signing away their property.
What can a homeowner do in such a situation? The first recommendation would be to only use attorneys admitted in New York State to defend them in foreclosure actions. An attorney with extensive experience in defending foreclosure actions will not request that the homeowner sign transfer documents which could result in loss of ownership. He will also be able to negotiate with the lender in an attempt to resolve a foreclosure action. If there is still equity in the property, she may arrange for a sale or a short sale to enable the property to be sold, and the homeowner to receive the proceeds, less the amount used to pay off existing debt on the property.
What if the property has already been transferred? Again, experienced counsel should be engaged to file a lawsuit to reclaim the property in question, if it was transferred by fraud. When filing such a suit, a lis pendens should also be filed with the County Clerk. This is a legal notice that there is a lawsuit regarding ownership of the property. Once it is recorded, it will prevent further “flipping” of the property in question, as any potential buyer will be able to view the lawsuit after a title search, and will not be able to obtain a mortgage because the lender will generally not lend on properties when ownership is in dispute in a pending Court proceeding. Also, a lis pendens will prevent a title company from insuring the property.
If you require legal defense of a pending foreclosure case, or believe you have been defrauded of your ownership in a property, please contact our firm so we can be of assistance.