Foreclosure Defense Attorney in Corona, NY (Served with Papers? Start Here)

Corona's homeowners hold loans that have been sold and re-serviced more than almost any in the city, because the neighborhood's mortgages were written in volume during the 2000s and have passed through a succession of servicers since. Every transfer is a chance for something to go wrong: the payment address changes and the borrower's automatic payment keeps going to the old one; the escrow balance is transferred incorrectly and the new servicer demands a shortage; a partial payment is placed in a suspense account and never applied; a modification agreed with the old servicer is not recorded by the new one, which bills at the original terms and declares a default when the modified payment arrives. RESPA's servicing transfer rules exist for exactly these problems, and they are enforceable both as defenses in the foreclosure and as claims for damages.

The statute and Regulation X require the notices, the 60-day grace period, and that the new servicer honor any loss mitigation agreement or pending application it inherited. The servicer must also send periodic statements showing how payments were applied, and a Corona borrower whose statements stopped or changed shape after a transfer has a right to ask why in writing. Where the record shows payments made on time to the address the borrower had been given, the default the new servicer declared did not happen, and a foreclosure filed on it is a foreclosure on a debt not in default. Servicers know this, which is why so many of these cases are resolved by a corrected account and a reinstatement of the original terms once the borrower's proof of payment is put in front of the court attorney referee in Jamaica.

The notice of error is the most underused tool a Corona homeowner has. Phone calls to a servicer produce nothing that can be shown to a judge; a written notice of error creates a duty to investigate, a deadline, and a paper trail. Regulation X lists the errors it covers, including failure to accept a conforming payment, failure to apply a payment properly, imposition of an unauthorized fee, failure to provide an accurate payoff, and any error relating to the servicing of the loan, and it bars the servicer from charging a fee for responding or from reporting the disputed amount to the credit bureaus for 60 days. A companion request for information under 12 C.F.R. 1024.36 compels the servicer to produce the payment history, the servicing notes and the identity of the owner of the loan, which is the same information the foreclosure defense needs to test standing.

I draft these notices for Corona clients with the borrower's bank records attached: the cancelled checks, the online payment confirmations, the statements from the old servicer showing the account current, and the transfer notices. A servicer that receives that package and still cannot reconcile the account has two choices, correct it or explain in writing why the borrower's own bank is wrong, and the explanation is usually where the case turns. Where the servicer fails to respond, responds late or responds without investigating, 12 U.S.C. 2605(f) provides actual damages, statutory damages for a pattern of noncompliance, and attorney's fees, which can be pleaded as a counterclaim in the foreclosure. The accounting dispute also feeds directly into the RPAPL 1321 reference: a referee computing the debt must resolve a documented challenge to the payment history, and a Corona borrower who has built the record through notices of error arrives at that hearing with the evidence already in the file.

The Sutphin Boulevard courthouse in Jamaica has processed a very large number of cases in which the default turned out to be an accounting artifact, and the court attorney referees in its conference part are practiced at reading a payment history. I have practiced foreclosure defense for 27 years, and I have seen Corona cases end at the first conference when the borrower's cancelled checks were laid next to the servicer's ledger and the referee asked plaintiff's counsel to explain the gap; counsel could not, and the case was discontinued with the account corrected.

Where it does not end that quickly, the conference part is where the servicer is directed to produce a complete payment history and to respond to outstanding notices of error, and a servicer that stalls is recorded for lack of good faith under CPLR 3408(f), which in Queens has led to tolled interest and barred fees. The assigned justices decide standing, RPAPL 1304 and 1306, the statute of limitations and the amount due, and Spanish-language interpreters are available in the conference part for Corona homeowners who want them. A contested Corona case runs two to four years from the summons to any auction, and an accounting dispute properly raised usually resolves well before that. An unanswered case, where the family assumes the transfer confusion will sort itself out, reaches auction in about a year on a default that may never have existed, with the equity in a Corona house sold at a discount and any surplus left with the Queens County Clerk until an RPAPL 1361 claim is filed.

Servicing transfers create RPAPL 1304 problems of their own. The Second Department requires strict compliance and proof of the mailing by a witness with personal knowledge or a standard practice the witness actually follows, and when the 90-day notice was mailed by a prior servicer, the current plaintiff's witness rarely knows anything about that servicer's practices; an affidavit reciting that the affiant reviewed the prior servicer's records has been rejected repeatedly on appeal from Queens. Notices to two borrowers in one envelope, notices with added collection language, notices with a counselor list for another county, and notices that state an arrears figure the servicer's own ledger does not support have also been rejected. A Corona borrower who was never actually in default when the notice was sent has a further argument that the statutory predicate for the notice, a default of 90 days, did not exist.

RPAPL 1306 requires the electronic filing with the Department of Financial Services within three business days of mailing, by the servicer that mailed, proven by the confirmation. Where either statute fails, the case is dismissed without prejudice and the lender must restart, and on a Corona loan accelerated in an earlier abandoned action the restart may fall outside the six years CPLR 213(4) allows; the Foreclosure Abuse Prevention Act, effective December 30, 2022, bars the lender from claiming it revoked the acceleration. Transferred loans also raise standing: the plaintiff must prove it held the note when it sued, and a chain of servicers is not a chain of ownership. I demand the original note, the endorsements and the assignments on every Corona file.

The answer pleads standing first or it is waived, the six-year limitations period under CPLR 213(4) as an affirmative defense, the RPAPL 1304 and 1306 conditions precedent, and a specific, detailed denial of the amount claimed that identifies the payments the servicer failed to credit, with counterclaims under RESPA where the servicer ignored notices of error. It states that the Corona owner occupies the home so the CPLR 3408 settlement conference is mandatory. Substituted service is complete ten days after the affidavit is filed and the 30 days run from then; a written stipulation from the plaintiff's attorney extends the deadline and a promise from the servicer's customer service line does not.

The payment question is the hardest for families who feel wronged. Servicers in a dispute often return payments as insufficient or hold them in suspense, and some Corona borrowers, told their money is not being accepted, stop sending it. That is the mistake. Continue to tender the contractual payment by check or traceable transfer every month, keep the returned checks and the bank records, and where the servicer refuses to accept, deposit the funds in a separate account so that the money exists when the account is corrected. A borrower who can show twelve months of tendered payments during a dispute reinstates the moment the servicer's error is acknowledged; one who stopped paying owes twelve months of arrears on a loan that is now in default by anyone's accounting. A missed answer deadline is addressed by a CPLR 3012(d) or 5015 motion with a reasonable excuse and a meritorious defense, and a documented servicing error is a meritorious defense, but it is better raised in a timely answer.

For most Corona homeowners whose foreclosure grew out of a servicing transfer, the goal is not a new loan but the old one, correctly accounted for. When the notice of error process or the conference part produces a corrected payment history, the servicer reverses the late fees, the default interest and the inspection and attorney charges it added, applies the payments it held in suspense, and the loan is current or nearly so; whatever real shortfall remains is reinstated from the funds the borrower set aside, and the case is discontinued. Where a genuine hardship also exists, the modification application goes in through the conference part on Sutphin Boulevard, on a corrected balance rather than an inflated one, and the servicer must honor any modification the prior servicer had granted.

For a Corona owner who is selling, a sale while the case is pending pays the lender at closing and keeps the equity, and the payoff statement must be corrected first, because a servicer's payoff on a disputed account routinely includes the very charges in dispute; a request for information under Regulation X and an objection to the payoff figure protect the seller's proceeds. The auction is the outcome to avoid: a discounted price, the disputed fees and default interest deducted first, and any surplus left with the Queens County Clerk until an RPAPL 1361 claim is filed. On the rare underwater Corona loan a short sale requires the lender's consent and a written RPAPL 1371 waiver of the deficiency. A family that paid its mortgage every month should not lose the house because two companies could not agree on where the money went, and in Jamaica, with the records in hand, it does not have to.