Foreclosure

January 31, 2025

Foreclosure Defense – Playing the Numbers Game

When our firm is retained by a new client whose property is in danger of being foreclosed, one of the first issues that needs to be determined relates to the equity in the property. Equity can be defined as the net value of the property, once all liabilities are calculated. It is an important component of deciding the correct game plan for defending any potential foreclosure action.

The first step towards calculating the equity in a property is to obtain an estimate of the current market value of the property. Although there are online service such as Zillow which may give an estimate of a home’s current value, these “zestimates” are approximate and may not reflect the current physical condition of the property. In order to obtain the most accurate value, we recommend hiring a professional appraiser. The appraiser is an independent licensed professional who will thoroughly examine both the interior and exterior of the house, and also compare it to other similar properties on the market in the area where the property is located. Once they have completed their inspection, they will provide a written report which gives a current market value for the specific property.

The second step is determining the current debt on the property. Payoff letters can be requested from the current mortgage holder. Keep in mind that there may be more than one mortgage on the property, requiring obtaining multiple payoff letters. The payoff letter will show the amount needed to pay off the outstanding mortgage. Depending upon how advanced the mortgage foreclosure process has proceeded, there may be additional charges added by the lender, such as property taxes advanced by the lender, as well as costs and attorneys’ fees for any foreclosure actions.

January 13, 2025

Foreclosure Protections in New York – When do They Apply?

By Weiss & Weiss

As long-time readers of this blog may be aware, New York State has significant protections in place for defendants in foreclosure actions. These legal requirements are meant to ensure that a homeowner is allowed an opportunity to defend his case, or at least be aware of a pending and existing foreclosure matter, and allow him an opportunity to enlist experienced legal counsel in order to protect his interest in his property.

With the economy in recession, and home interest rates having significantly risen due to efforts to forestall inflation, many borrowers now find themselves at risk of foreclosure. The first legal protection in place is that if the home loan is in default, the lender must give a written notice of one hundred and twenty (120) days prior to commencing a foreclosure action. Other legal notices may also be required to be sent by the lender (or their attorneys) prior to a lawsuit being filed.

Once a lawsuit commences and an Answer is filed, the Court will then schedule a foreclosure settlement conference. Under New York law, the matter cannot proceed further until all parties meet in a settlement conference to discuss the case and attempt, in good faith, to negotiate a resolution. Depending upon the results of the settlement conference, the Court may schedule additional conferences, as the lender may require submission of financial documents from the borrower so that a loan modification can be negotiated and approved. If a loan modification is made, the borrower must show that he is complying with its terms by making regular payments before the foreclosure case can be dismissed.

November 1, 2024

Partition Actions and Foreclosure

By Weiss & Weiss

Our firm handles many partition matters. As discussed in prior blog posts, a partition action occurs when one (or more) co-owners of a property no longer wish to co-own the property. A partition action is a legal mechanism wherein a co-owner can petition the Court for an order to have the property sold, and the proceeds divided among the co-owners. Usually a Court-appointed Referee is responsible for selling the property, either through a public auction sale, or by hiring a real estate broker. The Referee will also determine, after hearing evidence submitted by the parties, exactly how the proceeds will be divided.

As the property at issue may be co-owned by several people, it is not always clear who is responsible for paying the carrying charges on the property, either before or during a partition action. For example, three siblings inherit a house after the death of their parents. They cannot agree on who should pay the mortgage and property taxes, and these obligations must be paid, regardless of the current dispute over the ownership.

Once this occurs, there may be a foreclosure action brought by the mortgage holder. All of the c0-owners would be named as defendants in such an action. In addition, if the property taxes are not paid by any of the co-owners, and the mortgage remains unpaid, the property taxes may be in arrears. In this situation, the entity to whom the taxes are owed may obtain a tax lien against the property. Often, these liens are then sold to a third party. This third party may then commence a tax lien foreclosure action against the property, and name all the co-owners as defendants in that action.

October 24, 2024

Eviction Action or Ejectment Action?

By Weiss & Weiss

Our firm is involved in many situations in which one party seeks to remove another party from property, such as a house, cooperative, or condominium unit. However, the situation underlying the attempted removal will often determine the correct legal method for effectuating said removal.

The two main legal remedies are an eviction action and an ejectment action. Keep in mind that there may be situations in which an experienced attorney needs to use his legal judgment to determine which type of action to bring. First, we will cover an eviction action.

Eviction actions are generally used in ordinary landlord-tenant matters. In most cases, there is a tenant who is renting property from the property owner, who is the landlord. There usually is a written lease, but not in all situations. There are generally two types of eviction actions. The first is a non-payment, in which the tenant has failed to pay her rent. The second is a holdover, in which the tenant’s lease has expired, or a situation in which the tenant never had a lease and has a month-to-month tenancy.

September 24, 2024

Legal Issues Relating to the Sale of Inherited Property

By Weiss & Weiss

Our firm has often been consulted by clients who inherited a house from their parents, and wish to sell the property, as they may have moved out-of-state, and the property became vacant after the passing of the last parent.

Usually, this is a straightforward transaction, which often requires legal assistance in acquiring legal authority to sell the property as part of an estate. This involves experienced counsel filing for letters testamentary (if there is a will) or letters of administration (if there is no will). Once the Surrogate’s Court issues the proper legal document, then the sale can proceed.

However, there is often another issue, which may become known to the surviving children only after their parents’ death. It is possible that the parents borrowed against the property, even after the original mortgage that they took out to purchase the premises was paid off. Often a reverse mortgage is taken out by the elderly parents, in order to raise funds to continue to live in the house. Generally, such mortgages are only available to homeowners over the age of 62. Once the loan funds are disbursed, there are no monthly payments. The full amount of the loan would then be due after the death of the last borrower.

March 7, 2024

New York Eviction Law – Who is a Squatter?

By Weiss & Weiss

Recently in the news is a story about a couple who purchased a house in Queens after foreclosure. After they completed their purchase, they discovered a “squatter” living in the house. This story raises the question of who is legally defined as a squatter, and how can such a person be evicted?

First, let it be said that this is by no means an unusual course of events in New York. New York State laws, as well as many Judges in the landlord-tenant Courts, are notoriously “pro-tenant,” making it difficult to evict anyone, even squatters. Changes in New York Real Property Actions and Proceedings Law, which governs eviction procedure, have made it even more difficult to complete an eviction process. Even in situations in which the tenant has already been evicted, the tenant in many cases may seek a temporary injunction to allow him to move back into the premises, even if the eviction was done completely and lawfully.

The “squatter” in the Queens case turned out to be a handyman who claimed that the former owner of the premises gave him permission to reside at the premises. This moves him out of the category of squatter, as a squatter under the law is an individual who was never given consent, by any owner or former owner, to reside at the premises. Under the law, the handyman would be considered an alleged “licensee.” A licensee is someone who was allowed to live at the property by the owner without a lease or payment of rent, such as a girlfriend or boyfriend of the owner, or in this case, a handyman who claims to have permission from the former owner.

May 26, 2023

Tax Lien Foreclosures and Surplus Funds – The Supremes Rule

By Weiss & Weiss

Several prior blog posts discussed the Supreme Court case Tyler v. Hennepin County, Minnesota, which addressed to whether the government could keep surplus funds in tax lien foreclosures. Geraldine Tyler is a 94 year old woman living in Minnesota who owed $2,300.00 in unpaid property taxes for her condominium. Due to her age and safety concerns, she moved to a nursing home and the condominium was sold by the county to pay her unpaid property tax bill.

The property was sold by the County at auction for $40,000.00. Ms. Tyler’s unpaid tax bill was only $15,000.00 once interest and late fees were included. So what happened to the extra $25,000.00? Under existing law in Minnesota, Hennepin County (the County in which the condominium was located), kept the excess funds for itself.

Ms. Tyler then sued, claiming that allowing the County to keep the funds in excess of what she owed in taxes was an unconstitutional taking of her property. The relevant clause is located in the Fifth Amendment of U.S. Constitution and states that “Nor shall private property be taken for public use, without just compensation.”

April 28, 2023

Surplus Funds and Tax Lien Foreclosures – A Supreme Update

By Weiss & Weiss

A prior blog post discussed a case now before the United States Supreme Court relating to surplus funds in tax lien foreclosures. The case involved a 94 year old woman in Minnesota who owed $2,300.00 in unpaid property taxes. The property was sold by the county for $40,000.00. The county then kept the excess funds from the sale, and, under the existing law, did not return the surplus funds to the former homeowner.

Several states, including New York, have similar laws. In New York State, if your property is sold to pay an overdue tax lien, any funds received from the sale belong to the government, and not to the person whose property was seized, even if they greatly exceed the amount owed in delinquent taxes.

The U.S. Supreme Court recently heard oral arguments on this case. During these arguments, Justice Elena Kagan asked, if the property was worth one million dollars, and the tax bill was only five dollars, would the county keep the excess funds? The attorney representing Hennepin County in Minnesota basically answered in the affirmative.

January 19, 2023

Surplus Funds and Tax Lien Foreclosures – The Supremes Check In

By Weiss & Weiss

Prior blog posts have discussed the concept of surplus monies in foreclosure proceedings. When a foreclosed property is sold at public auction, the winning bid may exceed the total amount owed to the entity foreclosing on the property. In such a case, the excess funds are considered “surplus funds,” and the Court-appointed Referee will then deposit the surplus funds with the New York State Department of Finance, which has the authority to disburse the funds to the proper party, upon receipt of a Court order from the Court that handled the original foreclosure case.

Most foreclosure cases involve mortgage debt to an institutional or individual party, usually involving the amounts borrowed by the owner in order to purchase the property, or a loan taken out on the property after it is purchased, such as a second mortgage. However, there is another category of foreclosures that may generate surplus funds – tax lien foreclosures.

Tax lien foreclosures occur when the owner of real property fails to pay property taxes due on his property. Unless the property is tax-exempt, such as a property owned by a non-profit or religious institution, there are generally local real estate taxes, such as village, city, school, and county taxes assessed to the property. Depending on where the property is located, one or more of these taxes would be assessed to the property, either on an annual, semi-annual, or other type of payment schedule as determined by the taxing entity.

November 9, 2022

The Return of New York Foreclosure Cases

By Weiss & Weiss

As the COVID-19 pandemic continues to fade, many legal cases that were temporarily postponed by the Courts, such as foreclosures, are resuming and going forward in litigation. During the COVID-19 era, foreclosure cases, along with evictions, were stayed by executive order. That meant that if a lawsuit had been filed to foreclose a property, the Courts did not move the case forward, and simply “froze” the case, pending the end of the pandemic.

Recently, with the waning of COVID-19 and the realization that we will never be completely free of the virus, the Courts in New York have lifted the stay on foreclosure matters. This means both that new foreclosure cases may be filed, and also that existing cases may continue moving through the Courts.

With the economy in recession, and home interest rates rising due to efforts to forestall inflation, many borrowers may now find themselves at risk of foreclosure. This post will discuss what to expect in a foreclosure case now that the Courts are “back to normal.” This review will assume that the property in question is residential, and is the primary residence of the homeowner. For primary residences, there are laws in place to assist homeowners, which do not necessarily apply to cases involving commercial properties or “second homes.”