New York and Federal Laws
You are protected by the Federal Government and the state of New York before, during and after real estate transactions. The Consumer Credit Protection Act and The Homeowner Protection Program are both in place to guarantee you will not be taken advantage of by predatory lending practices.
Consumer Credit Protection
The Consumer Credit Protection Act and Regulation Z requires lending institutions to provide complete transparency to you when advertising any type of real estate financing. The following are considered trigger terms:
- Interest rate
- Amount of down payment
- Total number of payments
- Term of the loan
When any of the above trigger terms are advertised, these additional details are also required to be included:
- Annual percentage rate (APR)
- Cash price (amount of the loan)
- Down payment necessary
- Number, amount, and due dates of all payments
- Total of all payments to be made
These laws are in place to guarantee you have a complete understanding of the financing terms you agree to when you decide to purchase a home in New York City.
If you find yourself in a situation where your lender is threatening to foreclose on your home, options are available to protect your financial interests.
New York law requires the bank attempting foreclosure to send a notice to borrowers at least 90 days before starting the process. This law is in place for owner-occupied dwellings. If the bank or servicer does not send the 90-day notice, you have a strong defense that could dismiss the foreclosure. Consider talking to a lawyer specializing in real estate law to get specific advice about your situation.
Foreclosure Settlement Conference
Even after the foreclosure process is started, there is still a way for you to avoid the process being completed. New York law calls for a “foreclosure conference”. A foreclosure settlement conference is scheduled 60 days after the bank files proof of service with the court clerk. The borrower and the bank then negotiate a way to avoid foreclosure.
“Reinstatement” give the borrower a chance to catch up on the missed payments, plus costs and fees, to halt a foreclosure. Under New York law, you may reinstate the loan at any time before a final foreclosure judgment, and the foreclosure will be dismissed.
If the total mortgage debt is greater than the foreclosure sale price, the difference is referred to as a “deficiency.” New York allows banks to seek a personal judgment, called a “deficiency judgment,” against the borrower for this amount. The law allows this if the borrower is personally served or appears in the lawsuit. The bank has to make a motion with the court within 90 days of the completion of the sale. The sale is completed when the deed is delivered to the purchaser.
You’re Not Alone
No matter what happens, remember that you’re not alone. Always consider speaking with an experienced Long Island attorney to discuss your particular circumstances and to review all of your available options.