With the foreclosure moratorium created by the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 expiring on August 31, 2021, a surge of Foreclosure Auction Sales will be coming. If you are at risk of losing your home, this article explains how a Foreclosure Auction Sale works and how to stop it.
How does a Foreclosure Auction Sale Work?
Foreclosure Auction Sales most often occur when a party is unable to pay a mortgage. If the lender can show that they followed the laws and procedures as mandated by the State, then a judgment will be granted, and the Court will order that a Foreclosure Auction Sale take place.
Generally, for the lender to proceed to a Foreclosure Auction Sale, its attorneys must first serve you with the Notice of Sale, as well as publishing the Notice of Sale in a general circulation publication, which the Court will order, such as the Journal News in Westchester. Once all notices have been given, the Foreclosure Auction Sale is usually held in the Courthouse of the Supreme Court of the County in which the foreclosed property is located. While Foreclosure Auction Sales are open to the public, state law prevents you from bidding on your own home.
The Foreclosure Auction Sale is then conducted by a Referee, with the highest bidder being deemed the winner. The Referee is an attorney, who has been appointed by the Court to conduct the auction. The Referee’s role is to prepare all documents, conduct the auction sale, and then prepare the property transfer documents and convey all funds to the lender after the auction.
Can a Foreclosure Auction Sale be stopped?
Under New York State law, you can stop a Foreclosure Auction Sale using many methods. Because state law requires an extensive pre-foreclosure process and an equally burdensome foreclosure process, you can delay or even stop the Foreclosure Auction Sale from occurring.
If you are wondering how to stop a Foreclosure Auction Sale, you should heavily consider speaking with an experienced foreclosure defense attorney. The foreclosure process is a complicated maze, requiring persistence and patience. An experienced foreclosure attorney can help you maneuver through this process and give you the best chance to keep your home.
How can you save your Home from a Foreclosure Auction Sale?
There are several ways to save your home from foreclosure. Below are five ways that can help you stop a Foreclosure Auction Sale from taking place to keep your home. Please read through these options carefully.
1. Filing for bankruptcy
Though filing for bankruptcy will momentarily help you stop a foreclosure auction of your home and potentially give you the ability to stay in your home long term through a court-supervised loan modification review, it may not always be the best choice, if you have assets. If you are contemplating filing for bankruptcy, you should learn everything you can about the bankruptcy process before filing and speak to experienced bankruptcy attorneys who can help guide you through the decision. Clair Gjertsen & Weathers PLLC can evaluate your case and determine if filing bankruptcy is the best option to stop the Foreclosure Auction Sale.
2. Applying for a loan modification
After submission and approval of an application, the lender can agree to several loan modifications to make your mortgage payments easier. Examples of loan modifications include:
- Lowering monthly payments and increasing the years on your term;
- Lowering interest rates;
- Restructuring your mortgage to include the delinquent amount as a balloon payment; and
- Forgiving a portion of the delinquent conditionally or even unconditionally.
Each lender has different restrictions on what they can offer you for a modification. You must reach out to your lender as soon as possible to explore these options.
3. Reinstating the terms of your loan
Reinstatement occurs when you bring the delinquent loan current in one lump sum payment. Reinstating a loan stops a foreclosure because you catch up on the defaulted payments. You would also have to pay any overdue fees and expenses incurred because of the default. Once the loan is reinstated, you resume making regular payments on the debt.
4. Paying off the loan in its entirety
A payoff occurs when you pay the total amount required to satisfy the loan balance completely. Paying off the loan stops a foreclosure as the loan would be deemed satisfied. Paying off the loan also removes the mortgage as a lien against your home.
5. Challenge the Foreclosure Action
Foreclosure actions are very procedural in nature and the bank’s burden extends to more then simply showing that there was a default in the mortgage payment. It is the bank’s burden to prove through the foreclosure process that they have complied with all procedures and pre-foreclosure notices. Oftentimes, especially when foreclosure actions are unopposed, a bank’s motion will be granted, despite insufficient proof of compliance with many of these procedures.
Throughout the process, you can fight and expose these mistakes to the Court, which could result in a delay of the Foreclosure Auction Sale or could prevent one from ever taking place. Even if you have failed to appear before the Court, you may still have the right to bring these mistakes to the Court’s attention. Clair Gjertsen & Weathers PLLC can evaluate your case and determine what mistakes were made by the lender to give you the best chance at stopping the Foreclosure Auction Sale.
Having questions about an upcoming Foreclosure Auction Sale on your Home?
If you are trying to stop a foreclosure auction of your home, time is of the essence, and the matter of utmost importance is returning your home into your possession. Clair Gjertsen & Weathers PLLC has been helping people through this complex process for the last 40-years. We offer free initial consultations to see which option is the best fit for you to stop a foreclosure auction sale to keep your home. Please give us a call at 914.472.6202.