Generally, if the bank never recorded the mortgage then the bank has an unsecured loan and it can potentially lose its priority over other liens if it does not do anything to protect its interest. If the bank has a duplicate original mortgage then it can record it in the land records where the property in located and it will have a secured mortgage as of the date it was recorded. If it does not have a duplicate original mortgage then it will need to commence a lawsuit seeking to confirm the mortgage. If the borrower received the loan proceeds at closing, then it is likely the bank will obtain the relief it is seeking. However, sometimes the homeowner has defenses that can prevent the bank from obtaining the relief it is seeking. If there are defenses, then they need to be raised otherwise they will be lost. It is best to consult with an experienced attorney to make sure there are no valid defenses before a decision is made to not answer the complaint.
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This issue comes up often. When a tenant is served in NY, the tenant is uncertain if s/he should continue paying the rent to the landlord who is in foreclosure. Generally, the tenant is still legally obligated to pay the rent to the landlord. It is important to know if when the landlord gave the mortgage to the original bank if s/he executed an assignment of rents over to the bank. If s/he did, then the bank may have the right to collect the rents. If the bank wants to enforce the assignment, it likely will then seek to have the court appoint a receiver to collect the rents; however, this is unlikely if the property is a single-family home. Generally, once served, a tenant can hold back rent, but the landlord can bring an eviction proceeding based on non-payment. If so, the tenant will need to be prepared to deposit the back rent into the court or directly to the landlord. If the property is eventually sold at a foreclosure auction, the landlord would likely lose all ownership rights in the property and would no longer be entitled to the rent. In this situation, the tenant's lease will survive until the end of the lease period and rent will be paid to the new owner of the property. Generally speaking, if the tenant was a month to month tenant then s/he would have 90 days to relocate. Assuming the tenancy was for a term other than month to month, it could be terminated if the new owner wants to move into the property and the new owner would need to terminate the tenancy with a required 90 day notice. For more information see the following site:
http://www.occ.gov/publications/publications-by-type/comptrollers-handbook/ptfa.pdf It depends. If the foreclosure complaint is verified then the foreclosure answer must be verified too. Sometimes the foreclosure complaint will not say it's verified so you need to check to see if there is an actual verification. If the foreclosure complaint is verified and the foreclosure answer is not, then the bank attorney can reject the foreclosure answer. The bank attorney must indicate the basis for the rejection and it must be done timely. If the foreclosure answer is rejected, then it is likely that the time period to answer would have already expired. If so, then the homeowner's foreclosure answer is treated as a mere notice of appearance and the homeowner will be deemed in default unless the bank attorney grants an extension ( unlikely at that point) or unless the homeowner brings a motion compelling the plaintiff to accept a late verified answer. In the latter case, the courts will generally grant this relief so long as the motion is timely made and there is a good reason for failing to verify the answer. Even if the foreclosure complaint is unverified, if the foreclosure answer is to have counterclaims against the foreclosing bank then the foreclosure answer will need to be verified so long as those counterclaims allege fraudulent conduct on the part of the bank. Bottom line is that New York foreclosure litigation is fraught with danger to the untrained; it is important to protect the home by making sure an experienced foreclosure attorney is representing you.
Q: I just was served with a summons in a foreclosure action. It says I have 20 days to answer. Should I ignore it?
A: By no means ignore it; you need to respond as soon as possible and if not you run the risk of being in default. Your house can be taken from you by the bank. You may have very good defenses and you need to consult with an experienced Attorney to ensure that your rights are fully protected. |
AuthorArnold M. Bottalico is an experienced Long Island, NY foreclosure attorney with over 25 years of experience, and he welcomes your questions and comments. Archives
January 2023
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