Loss Mitigation and Loan Modification in Bankruptcy Court

On September 19, 2016, in Bankruptcy, by Robbie L. Vaughn, Esq.
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(Bankruptcy Court -EDNY – Central Islip, NY)

Bankruptcy Court’s Loss Mitigation Program

In 2009, The United States Bankruptcy Court – Eastern District of New York adopted a Loss Mitigation Program which applies in all individual Chapter 7, 11, and 13 cases.

The Bankruptcy Court’s General Order #543 provides the following:

The term “loss mitigation” is intended to describe the full range of solutions that may avert the loss of a debtor’s property to foreclosure, increased costs to the lender, or both. Loss mitigation commonly consists of the following general types of agreements, or a combination of them: loan modification, loan refinance, forbearance, short sale, or surrender of the property in full satisfaction. The terms of a loss mitigation solution will vary in each case according to the particular needs, interests, and goals of the parties.

Loss Mitigation may be requested by a debtor or creditor.  Also, the Bankruptcy Court may enter a Loss Mitigation order at any time after notice to interested parties.  However, in our experience, the Debtor’s attorney typically files a motion requesting loss mitigation in an effort to obtain a loan modification for the debtor.

We currently have several clients who are participating in the loss mitigation program. The program has some similarities to foreclosure settlement conferences held in state court, but appears to move along at a much faster pace.

You can click here to watch a video entitled “Loss Mitigation and Mortgage Modification in Bankruptcy Courts.”

Additionally, you can always call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620, to speak with an experienced bankruptcy attorney.

 

Nassau County Foreclosure Defense

On September 7, 2016, in Bankruptcy, Foreclosure, Litigation, by John A. Weber IV, ESQ.

Nassau County Foreclosure Defense

Nassau County Foreclosure Defense cases have several steps.  Knowing the procedure of the foreclosure case can dictate which steps should be taken at any particular moment throughout the course of the litigation.  The following is a quick summary of the options that may be available in a Nassau County Foreclosure Defense case after the summons and complaint have been served on the home owner.

Gathering information necessary to the defense of the action is probably the most overlooked and underrated step that both pro-se litigants and attorneys make in defending foreclosures.  Simple research such as ordering a foreclosure search should be part of the due diligence undertaken prior to litigating.  Other methods such as discovery devices can be used to gather additional information during the pendency of the foreclosure litigation.

Responsive pleadings including affirmative defenses and counterclaims where applicable should be filed in a timely fashion.  Responsive pleadings in foreclosure actions will often depend greatly on the information gathered about the property and circumstances surrounding the loan origination and servicing.

Motion practice can be used as part of a foreclosure defense strategy.  Motions can accomplish several goals that can be of great importance to the preservation of the home owners rights.

Chapter 7 Bankruptcy should also be discussed as part of a comprehensive foreclosure defense strategy.  Deciding on the appropriate time for filing of a Chapter 7 Bankruptcy to aid in a foreclosure defense will depend on a myriad of factors.  Some cases dictate that a Chapter 7 should be filed prior to responsive pleadings.  Some cases dictate that Chapter 7 should be filed after settlement conference negotiations have broken down.  Other cases dictate that Chapter 7 will be of no use to a home owner in foreclosure.

Chapter 13 Bankruptcy is an extremely useful tool for foreclosure defense planning.  Chapter 13 filings are often times more effective earlier in the process for certain logistical reasons.  If the default in mortgage payments were in the not to distant past, the use of Chapter 13 is more likely to be successful.

Federal loss mitigation applications should be considered when weighing bankruptcy options.  For its brief existence, this program seems to be very successful and worth the effort to apply.

Please understand that loan modification applications should be submitted in completed form as quickly as possible to initiate loss mitigation negotiations.  This is not separate from any of the options listed herein for foreclosure defense, but rather as a supplement.  As always, case specific facts will determine which options each individual will proceed with after detailed discussions with an attorney.

Foreclosure Defense Attorney in Nassau County

If you or someone you are concerned about are facing foreclosure, call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620 today. Remember, successful litigation is no accident.

HAMP Program Extended

On June 5, 2013, in Foreclosure, by Robbie L. Vaughn, Esq.

HAMP Modification Program

HAMP Loan Modifications will continue to be available to homeowners “through December 31, 2015.” The original program deadline was December 31, 2013.

“The U.S. Department of the Treasury and the U.S. Department of Housing and Urban Development today announced an extension of the Obama Administration’s Making Home Affordable Program through December 31, 2015. The new deadline was determined in coordination with the Federal Housing Finance Agency (FHFA) to align with extended deadlines for the Home Affordable Refinance Program (HARP) and the Streamlined Modification Initiative for homeowners with loans owned or guaranteed by Fannie Mae and Freddie Mac.”

Read the cited Press Release here.

Long Island Foreclosure Defense Attorneys

The Law Firm of Vaughn, Weber & Prakope, PLLC, can be reached at (516) 858-2620.

 

No Documentation Loan Modification

On April 18, 2013, in Foreclosure, by Robbie L. Vaughn, Esq.

No Documentation Loan Modification

Fannie Mae and Freddie Mac to offer No Documentation Loan Modification Program

The Program

Fannie Mae and Freddie Mac will offer a simplified loan modification process. Beginning July 01, 2013, servicers will be required to offer borrowers who are at least 90 days, but not more than 24 months, delinquent on their mortgage a trial modification without requiring financial or hardship documentation.

If the homeowner makes three  timely trial modification mortgage payments, their mortgage will be permanently modified. Additionally, homeowners who provide documentation of their finances and hardship could receive “a modification with additional savings.”

The Eligibility Requirements:

“The loan must be owned or guaranteed by Fannie Mae or Freddie Mac. Homeowners must be 90 days to 24 months delinquent, and have a first lien mortgage that is at least 12 months old with a loan to value ratio equal to or greater than 80 percent. Loans that have been modified at least two times previously are not eligible. Click on these links to see if your loan is owned or guaranteed by Fannie Mae or Freddie Mac.”  The program ends August 01, 2015.

Our View

This appears to be a good initial program.  This program has the potential to help many homeowners avoid foreclosure. While much remains to be seen, we do like the following aspects of the program:

  • No documentation– Many of our clients get frustrated and exasperated by the constant requests to provide the same documents over and over again.
  • No action required– Servicers will contact the homeowners directly. Homeowners will not have to hire a third-party to help them with the loan modification (equals more savings for the homeowner).
  • Length of trial modification– Three months is a reasonable amount of time. We have seen some trial modification go on for 6 months or more (this can be very stressful for the homeowner).
  • Investment properties are eligible.

Read the full press release here.

New York Foreclosure Defense Attorneys

We are here to assist you! Call (516) 858-2620 to schedule an appointment with the Law Firm of Vaughn, Weber & Prakope, PLLC.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation. This website is Attorney Advertising. It does not form an attorney-client relationship. We are a debt relief agency and a law firm that helps people file for bankruptcy relief under the U.S. Bankruptcy Code – Title 11. Prior results do not guarantee a similar outcome. Proudly assisting residents of Long Island, Nassau county, Suffolk county, New York City, Queens, Brooklyn, Bronx, Staten Island, Manhattan