Produce the Note Foreclosure Defense

New York Foreclosure Process

New York’s governor Andrew M. Cuomo signed a foreclosure bill into law, on July 31, 2013 that requires banks to produce the note at the beginning of the foreclosure.

To learn more about the difference between judicial and non-judicial foreclosure, and the procedures for each, give The Christine Thea Rubinstein Law Firm a call today.

In New York, foreclosures are judicial, this means that the lender (the plaintiff) must file a lawsuit in state court. The lender initiates the foreclosure by filing a complaint with the court. The complaint is served (given) to the borrower, along with a summons.

New York Law: Banks Must Produce the Note during a foreclosure proceeding.

Learn more about New York Foreclosure Laws and Procedures.

Promissory Notes and Mortgages

When you took out your loan, you signed both a mortgage and a promissory note. The promissory note is what establishes your liability to pay your mortgage loan. The mortgage creates a lien on the property. The holder of the note is the only party that has the right to enforce the debt by foreclosing on the property. (Call to learn more about promissory notes and foreclosure.)

If the foreclosing party does not hold the note, it does not have standing to foreclose.

Why the New Law Was Needed

Following the 2008 financial collapse, law firms and loan servicers signed off on foreclosures without thoroughly reviewing the documentation. The new law is designed to reduce fraudulent filings and deter robo-signing by requiring creditors to "produce the note" at the beginning of the action. This ensures that the lender has legal standing to file the foreclosure action.

(To learn more about robo-signing, Contact foreclosure help attorneys at The Christine Thea Rubinstein Law Firm today to discuss your options for your first mortgage, second mortgage or home equity line of credit. What does the robo-signing mess mean for New York homeowners facing foreclosure?)

New Foreclosure Requirements

The new law (S.4530-A/A.5582-A) requires that at the start of every new foreclosure action on owner-occupied residential property, the foreclosure attorney must file copies of the following documents with the court:

  • The Mortgage Note (or the attorney must file a lost note affidavit if the document has been lost or destroyed)
  • the mortgage
  • any modification agreements
  • all assignments
Procedure Prior to August 30, 2013

Under the previous rules, the plaintiff's attorney was supposed to file a Request for Judicial Intervention (RJI) and an attorney affirmation along with the proof of service after the complaint was served to the homeowner. This step moved the case to a judge who would then schedule the mandatory settlement conference. (Learn more about New York Foreclosure Settlement Conferences.)

However, attorneys sometimes dragged their feet when it came to filing the RJI or attorney affirmation. As a result, thousands of cases stalled (in what is referred to as a “shadow docket”) and never got to the mandatory court-supervised mediation stage. These lengthy delays deprived homeowners of timely access to settlement conferences and made it much more difficult for homeowners to eventually obtain an affordable modification to avoid foreclosure because interest and fees continued to accrue while the case sat in limbo. (Learn about loan modifications and other options to avoid foreclosure in our Alternatives to Foreclosure area.)

Procedure On or After August 30, 2013

To remedy this problem, the new law requires that the foreclosure plaintiff's attorney file a "certificate of merit" immediately at the beginning of the foreclosure, rather than an affirmation later in the process. Since the certificate of merit must be filed along with the complaint, this enables cases to move on to the settlement conference process within 60 days of the filing of the affidavit of service (which now must be filed within 20 days of service under the new law).

The failure of plaintiffs’ attorneys to file the RJI and attorney affirmation was one of biggest causes for the large backlog of foreclosures in New York. This new law should speed up New York’s foreclosure timeline because the plaintiff’s attorney must complete the necessary due diligence prior to filing a foreclosure action rather than filing a complaint and then letting the case linger while completing the due diligence needed to file an affirmation.

Effective Date of the New Law

The law applies to foreclosure actions started on or after August 30, 2013.

The lawyers at The Christine Thea Rubinstein Law Firm devote a significant part of their firm to the area of mortgage foreclosure defense. They provides a wide range of mortgage and foreclosure services representing commercial and residential real estate property.

Get a Foreclosure Consultation today.

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New York, Foreclosure Attorneys

If you've fallen behind on your mortgage or are struggling to pay your monthly installment and other bills, contact foreclosure help attorneys at The Christine Thea Rubinstein Law Firm today.

Avoiding Foreclosure — Consider Your Options

Depending on your financial situation and the specifics of your mortgage, one of the following may be your best option for avoiding foreclosure:

People who don't qualify for Chapter 7 bankruptcy usually have a choice to file under Chapter 13 bankruptcy. Unlike Chapter 7 bankruptcy which wipes out unsecured debt, Chapter 13 bankruptcy will require you to repay a percentage of what you owe over a 3- to 5-year period, depending upon your net monthly disposable income. It will be necessary to submit a repayment plan for approval by the court and your creditors.

As part of your repayment plan, you can include past-due mortgage payments and reduce other monthly bills into one manageable payment. Accordingly, people who file Chapter 13 bankruptcy are often able to avoid foreclosure. Additionally, once you file for bankruptcy, an automatic stay is placed on any foreclosure or collection actions on the part of banks and creditors. This may allow you the time you need to save your home. There may be dire tax consequences if you foreclose on a mortgage. Contact foreclosure help attorneys at The Christine Thea Rubinstein Law Firm today to discuss your options.

Foreclosures in the State of New York

New York is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage. It should be noted that New York does have a non-judicial foreclosure process however this is rarely used by lenders. Contact foreclosure help attorneys at The Christine Thea Rubinstein Law Firm today.

In New York, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. The court with jurisdiction over a foreclosure is known as the Supreme Court in the county in which the property is located. A foreclosure complaint involving a property in Manhattan would be filed in the Supreme Court of New York: New York County. A complaint is filed in this court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

Contact foreclosure help attorneys at The Christine Thea Rubinstein Law Firm today.

Depending on the court schedule, it usually takes approximately 120-180 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. A foreclosure sale must be advertised at least four (4) weeks in advance of any sale and sales usually take four (4) months after final judgment for foreclosure is granted.

Are Deficiency Judgments Permitted in New York?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures. This means that the borrower still owes the lender for the difference between what the property sold for at auction and the amount of the original loan. The Plaintiff must file a motion within 90 days after the property sale auction to enforce this right.

Contact foreclosure help attorneys at The Christine Thea Rubinstein Law Firm today.

What Statutes Govern New York Foreclosures?

The laws that govern New York foreclosures are found in New York State consolidated Laws, Article 13. Once your home is sold after foreclosure, the new owner must provide you with a three-day written notice to quit the property and initiate a formal eviction process. The new owner cannot change the locks on the doors or throw you out immediately. This means the new owner cannot knock on your door and throw you out.

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About the Website of The Christine Thea Rubinstein Law Firm and the legal information on the screen above: We hope you find this information useful and informative, but it is not the same as legal counsel. A free website is ultimately worth everything it costs you; you rely on it at your own risk. This website and any other website on this legal topic does not substitute real legal advice, face to face with an attorney. Good legal advice includes a review of all of the facts of your situation, including many that may at first glance seem to you not to matter. The plan it generates is sensitive to your goals and wishes while taking into account a whole panoply of laws, rules and practices, many not published online. Speak with an attorney today to help resolve any legal issues that you and your family may be facing.

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