Lien enforcement For the most part, California and New York are consistent in their non-judicial foreclosure process. Both states’ laws require the foreclosing party to send a notice of intent to foreclose to the property owner at least three months before filing a court action. After the notice is sent, the foreclosure process typically begins with a foreclosure mediation or pre-foreclosure conference. A foreclosure pre-foreclosure conference is a meeting held between the lender and the borrower to discuss alternatives to foreclosure. Both states also typically require the lender to give notice of the court action to the borrower prior to moving for a judgment of foreclosure or order of sale. Failure to provide this notice results in a default judgment and foreclosure. California and New York generally impose very similar requirements with respect to who can be foreclosed on and how notice is given to a foreclosure-affected property owner. Like many other states, they allow homeowners to recover attorney fees and costs if they can prove they were harmed by improper notice. In both states, the parties are required to follow procedures governing the mortgage in order to make valid, enforceable foreclosure sales. California and New York require the foreclosing party to file a notice of foreclosure sale with the relevant county. After filing a notice of foreclosure, a sale date is scheduled by a public notary, which may not be less than 20 or more than 65 days from the date of filing. The foreclosure sale is often postponed if the bid price is insufficient. Default judgments in the foreclosure process If the foreclosing party fails to comply with any of the procedural requirements outlined above, they may be subject to a default judgment that prohibits them from proceeding with foreclosure or foreclosure sales. California and New York differ slightly in their default judgment requirements, as New York places stricter limitations on how defaults are entered, compared to California. Both states make provisions for the borrower to stay within the court order, and cure any non-compliance by bringing the mortgage payments current or entering into a new agreement with the foreclosing party that would repay the loan in full. Foreclosure alternatives to California and New York California and New York foreclosure alternatives are few and far between. The fact that these states have not made foreclosure alternatives available to homeowners may be because they don’t offer mortgage loan modification, but it could also be because homeowners are not adequately informed of these options. If you’re experiencing financial hardship due to a California or New York foreclosure, the professionals at WeForeclose can help you get started on the right path to foreclosure prevention. We can also help you understand your options for staying in your home and paying your mortgage at a fair and equitable price through a foreclosure alternative. New York Foreclosure Alternatives: Foreclosure Abatement, a new policy for all homeowners with distressed mortgages On July 25, 2018, the New York State Attorney General announced the New Foreclosure Mitigation Program (FMP), intended to “provide the support necessary for distressed homeowners facing imminent foreclosure.” If implemented, the FMP will become the first foreclosure alternative available to New York homeowners. Unlike traditional foreclosure alternatives like the Home Affordable Modification Program (HAMP), the FMP offers an alternative to foreclosure that can help homeowners stay in their homes and avoid the hardships associated with foreclosure. The FMP also provides support to a large number of homeowners who have lost their home to foreclosure and have struggled to find an affordable way to remain in their home. Homeowners can access help through the FMP if they meet the following three requirements: 1. New York homeowners can find that their home has been assigned for auction but still owe more on their mortgage than the house is worth; 2. A mortgage foreclosure has already been initiated or is imminent; 3. No judicial foreclosure has taken place; Foreclosure alternatives are available to homeowners who meet these requirements, and foreclosure sale can be suspended. For those who are still eligible, foreclosure alternatives might include: • A loan modification that modifies the interest rate or reduces the principal balance of the mortgage • A forbearance agreement which temporarily suspends the mortgage payments • A payment plan that would not require foreclosure and that the homeowner would be expected to complete as well • A settlement offer from the lender which would allow the homeowner to transfer his home to a trust (thereby reducing the value of the home) while keeping the homeowner’s name on the deed and maintaining a mortgage-free home The goal of this new program is to reduce foreclosures, allowing homeowners facing foreclosure to save their home and keep their dignity. To do so, the Attorney General has offered some guidance for those who do not want to go through the FMP foreclosure alternative: • Request for Mortgage Assistance If a foreclosure sale is scheduled and you do not have another way to stay in your home, you may request a mortgage assistance package or apply for a payment plan through the Attorney General’s foreclosure crisis assistance hotline (1-800-771-7755) or the state’s Department of Financial Services (1-888-234-6050). • Filing for bankruptcy If you are facing foreclosure but still have a high balance, filing for Chapter 7 bankruptcy may allow you to have your debt discharged while maintaining your home and keeping your dignity. A bankruptcy lawyer may be able to assist you in deciding if a bankruptcy filing would help you. The New Foreclosure Mitigation Program will launch in December 2018 and run through April 30, 2019. All homeowners are welcome to take advantage of this program. There is no financial cost to homeowners, but there is a chance that the program may be extended if the program exceeds its expected time period. Foreclosure Alternatives in California In California, three foreclosure alternatives are available to homeowners: • The Pre-Foreclosure Alternative The Pre-Foreclosure Alternative is a Homeowners’ Bill of Rights which gives homeowners who owe more than their house is worth an opportunity to renegotiate their mortgage. If the lender agrees to these terms, the homeowner can remain in his/her home and pay a reduced mortgage payment for a certain period of time. The alternative will not help homeowners whose house is worth less than the mortgage. The Pre-Foreclosure Alternative also protects homeowners by providing a mechanism for all parties to reach an amicable settlement and preserve homeownership. • In Foreclosure Modification or Adjustment If a homeowner owes more than what their house is worth, the lender may be willing to provide a loan modification. A loan modification can reduce the balance and allow the homeowner to stay in their home. The three-month emergency foreclosure moratorium authorized by California AB 109 expires at the end of October, and it’s not known how many lenders are aware of it. It’s not clear whether lenders will stop foreclosures immediately or put the brakes on until late October. However, lenders must stop all foreclosure sales in the meantime and should not evict homeowners as part of foreclosures. The FMP is intended to give financial assistance to financially distressed homeowners who are able to repay their mortgage but who are not able to do so. If you have a distressed mortgage, the FMP may be right for you. Even if you are able to keep your house, the FMP may help you to save your home. If you are not yet in foreclosure, the FMP could assist you to work out a loan modification. The FMP is especially helpful to homeowners who have lost their home to foreclosure but whose homes are worth more than their mortgage balance. If you are already in foreclosure or facing imminent foreclosure and are unable to stop your foreclosure sale before October 9, 2018, you may be able to receive assistance from the FMP by filing a lawsuit or complaint under the FMP’s new Alternative Dispute Resolution program. The complaint must be filed in a New York City court. HAMP alternatives that are not available in New York and California are: • Hardship Delay/Modification A Hardship Delay modification is also called a “trial” modification. The homeowner may be able to stay in his/her home for up to three months if the lender agrees. Hardship Delay modifications are generally offered to borrowers with a significant decline in their income, a decrease in their monthly housing expense, or a decrease in the market value of their home. • Adjustable Rate Mortgage Adjustable Rate Mortgage (ARM) loans are often a better option than fixed rate mortgage because they offer a lower initial rate. A mortgage payment can increase from month to month if the lender increases the interest rate, but the total amount of the payments remains the same. • Mortgage Debt Forgiveness The Home Affordable Modification Program (HAMP) was designed to reduce mortgage debt for qualified homeowners who experienced financial hardship and were unable to meet their mortgage payments. This program, however, can be expensive for a lender and it does not help borrowers who already owe more on their mortgage than the value of their home. If you or a loved one is going through the foreclosure process in New York or California, you should contact the FCM to discuss your options. Your foreclosure situation is unique and your goals may vary. Hiring a financial professional can help you explore every foreclosure option and avoid making the wrong decision when it comes to foreclosure alternatives. You can’t make it through life without some adversity. And you shouldn’t be able to get through your real estate negotiations with banks without some conflict