A court case, not just a notice
In New York, a lender generally has to bring a court case to foreclose, usually in state court, and the case moves through stages before any auction. You receive a summons and complaint and have a limited time to respond, and certain defenses can be lost if they are not raised in the answer. For many home loans the court schedules settlement conferences where the homeowner and lender discuss alternatives such as a modification. If the case continues, the lender usually seeks a judgment of foreclosure and sale, and a referee conducts the sale. Foreclosure defense means using each of those stages thoughtfully, not simply delaying.
Papers to pull together
Collect the note and mortgage, every letter and notice the lender or servicer sent before the lawsuit, payment history, and any loan modification applications with proof of what you submitted. Notices that arrived before the case was filed can matter, because lenders often have to follow specific steps first. Keep records of every call with the servicer, including names and dates. If you have income from a new job or from family members who will help, gather proof of it, since any modification or plan depends on it. Housing counseling agencies approved by HUD can also help with modification paperwork at little or no cost. Bring the papers even if you think they are not important.
Choosing a direction early
The first decision is what you want: to keep the home, or to leave on the least damaging terms. If keeping it is the goal, we look at whether a modification is realistic and whether the lender's case has weaknesses worth raising. Chapter 13 bankruptcy is another route, often used to stop a scheduled sale and cure arrears over time. If leaving is the goal, a short sale or a deed in lieu may reduce the damage to your credit and, if negotiated, limit any deficiency. A sale date already on the calendar makes reaching counsel immediately the most important step.
