New York Foreclosure Options

When faced with foreclosure, New Yorkers do have options – including filing for bankruptcy, increasing the length of your mortgage, lowering the rate of your mortgage and reducing the amount of principal you owe. Our New York legal expert provides information on all of these options.

New York Attorney Elliot Schlissel

Elliot Schlissel, a Lynbrook New York based attorney who has been assisting clients in Nassau County, Suffolk County, Westchester County and New York City's five boroughs of the Bronx, Brooklyn, Manhattan, Queens and Staten Island for over 30 years, explained what options New Yorkers have when facing foreclosure (link to article entitled Three Ways For New Yorkers To Modify Their Mortgages):

  • Filing for bankruptcy. Bankruptcy is an option if your house is foreclosed upon. There are two types of bankruptcies. One is called a Chapter 7, and one is called a Chapter 13. If you bring a Chapter 13 bankruptcy, you can force a creditor into a repayment plan provided you have sufficient income to allow you to catch up with your mortgage over a five-year period. There are very specific requirements that must be met in a Chapter 13 bankruptcy plan.

    Our bankruptcy attorneys commonly use this procedure to allow homeowners whose homes are foreclosed upon to stop the foreclosure proceedings, remain in their homes and catch up on their mortgages. The cost of defending a foreclosure or filing a bankruptcy is generally $2,500 and up depending on the individual circumstances. However, we often allow our clients to enter into payment plans to cover their attorneys’ fees.

  • Increasing the length of your mortgage. You can also increase the length of your mortgage by requesting that the time in which you are behind on your mortgage be added to the end of your mortgage term. So, if you are six months behind on your mortgage, your mortgage would change from a 30-year mortgage to a 30-year-and-six-month mortgage.
  • Lowering your interest rate. You can ask the bank to lower your interest rate during the early years of your mortgage so that you can make up for the shortfall at a later point. For example, if your mortgage is $2,000 a month, the bank may modify it in years one to three so that you pay $1,000 a month. In years four, five and six, you pay $1,500 a month. In years seven, eight and nine, you pay $2,500 a month – until you make up for the lower payments.
  • Reducing the amount of principal you owe. You can request the bank to reduce the amount of principal owed on your mortgage to the value of your home, which will then cause your mortgage payments to be reduced. This is commonly used where you owe more on your house than it is worth due to current economic conditions.

Explore your options

Experienced real estate lawyers can help you explore what options may be right for you. Don't let the bank take your home without finding out if there is a way to avoid foreclosure. Consultations with a real estate attorney are free, strictly confidential and without obligation.