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

The pitch arrives in Riverside by mail, by door knock or through someone who found the lis pendens in the county clerk's records. The investor offers to make the foreclosure go away: he will buy the house, pay off or catch up the mortgage, let the family stay as tenants at a rent they can afford, and sell the house back to them in a year or two once their credit recovers. The family, facing an auction, signs a deed. Then the rent rises, a payment is missed, the buyback price turns out to be far above what they were paid, and the family is evicted from a house they still think of as theirs, having given away equity that would have survived even a foreclosure.

The Home Equity Theft Prevention Act was enacted in 2006 to stop exactly this. It applies to any transaction in which a home in foreclosure or default is transferred by the owner and the owner remains in possession or has a right to reacquire it, and it imposes duties on the purchaser: a written contract in the language of the negotiations, specific disclosures, a five business day right to cancel with no penalty, no transfer of the deed before the cancellation period ends, and a prohibition on taking advantage of the owner's distress. A reconveyance arrangement that leaves the owner with less than a fair share of the equity is presumed unconscionable. A Riverside homeowner who was taken in can sue to rescind the deed, recover the property or its value, and collect damages and attorney's fees, and the purchaser is exposed to criminal prosecution. The mortgage foreclosure, meanwhile, is still defensible on its own terms.

Families who sign a sale-leaseback assume the mortgage went with the house. It did not. The note is a personal obligation of the people who signed it, and a lender does not release a borrower because the borrower deeded the property to someone else; if anything, the transfer may trigger the due-on-sale clause and give the lender an additional ground to accelerate. The investor may pay the arrears to stall the case, or may not, and I have seen Riverside families receive a referee's notice of sale months after they thought a stranger had solved their problem.

The legal position, once understood, is recoverable. If the transfer violated the Act, the family sues in Riverhead to rescind the deed and is restored to title, at which point they are again the defendants in the foreclosure with every defense available: lack of standing, a defective RPAPL 1304 notice, a time-barred acceleration under CPLR 213(4), and a denial of the amount claimed, which now includes whatever the investor's involvement added to the arrears. Where the investor recorded a mortgage of his own or resold the property, the Act's provisions on bona fide purchasers and the notice of pendency the family files in the rescission action protect the claim. The foreclosure defense and the equity theft claim run together, and the second usually strengthens the first, because a servicer that dealt with the investor while the borrower remained liable has its own explaining to do at the CPLR 3408 conference.

Riverside homeowners can see the courthouse from the traffic circle, and I want them in it: at the first CPLR 3408 conference, and in any rescission action, because a family explaining directly how an investor took their deed makes an impression on the court attorney referee and the assigned justice that paper does not. I have appeared in that courthouse on foreclosure matters since 1999, and the Riverhead foreclosure part has seen enough equity theft cases from the East End to recognize the pattern quickly.

The referees will not treat an investor who holds a defective deed as the homeowner for conference purposes, and they will hold the servicer to dealing with the borrower who remains on the note. The assigned justices have set aside sale-leaseback transfers under the Act, restored families to title, and denied summary judgment where the plaintiff's own papers showed it had been negotiating with a stranger while the borrower was entitled to a settlement conference. A contested Riverside case runs two to four years from the summons to an auction, time enough to unwind a bad transfer and then modify or sell the home properly. An unanswered case reaches auction in about a year, which is the window the investors are counting on.

The Second Department, which reviews Riverhead decisions, demands strict compliance with RPAPL 1304 and requires the Riverside plaintiff to prove the mailing by a witness with personal knowledge or of a routine the witness actually follows. A notice to two borrowers in a single envelope, extra collection language, a counselor list for the wrong county, or a boilerplate mailing affidavit has each been held insufficient in Riverside-type cases. The notice also must go to the borrower, not to an investor who has taken the deed, and a servicer that redirected correspondence after a transfer has a compliance problem.

The RPAPL 1306 electronic filing must be made within three business days of the mailing, and the Riverside plaintiff has to produce the confirmation. Where either statute fails, the Riverside case is dismissed without prejudice and the lender must restart the 90-day process. Where the Riverside loan was accelerated in an earlier, abandoned action, the restart may fall outside the six years CPLR 213(4) allows, and the Foreclosure Abuse Prevention Act, effective December 30, 2022, bars the lender from claiming that acceleration was revoked. Riverside loans from the mid-2000s frequently carry that history, and it is the first thing I check alongside the deed records.

The equity purchaser's first instruction is usually to stop dealing with the lender and the court, and it is the most damaging instruction a Riverside family can follow. The borrower remains a defendant whether or not the deed has changed hands, and a defaulted borrower loses the right to contest the debt, the notice and the standing while remaining liable for any RPAPL 1371 deficiency. The investor, meanwhile, has no obligation to defend the case and often lets it proceed, because an auction that wipes out the family's interest may suit him.

The answer must raise standing first or it is waived, plead the CPLR 213(4) statute of limitations, assert the RPAPL 1304 and 1306 conditions precedent, and deny the amount claimed. Where a transfer has occurred, the answer also pleads the family's continuing interest and the invalidity of the transfer under RPL 265-a, and a separate action or counterclaim for rescission follows. Where a default has already been entered, Riverhead justices have accepted reliance on an equity purchaser's assurances as a reasonable excuse when paired with the meritorious defenses these cases usually carry. Nothing said by the investor, the servicer or anyone else extends the deadline; a written stipulation from the plaintiff's attorney or a court order does.

The equity purchaser's offer is a bet that the Riverside family does not know what the house is worth or what the law allows. The honest alternatives are all better. A family that can carry a modified payment obtains it at the Riverhead conferences, and a completed modification ends the case. A family whose hardship has passed reinstates or enters a repayment plan. A family that is leaving lists the house on the open market, where a buyer pays a real price, the lender is paid at closing, and the equity that the investor wanted goes to the family instead; the notice of pendency does not prevent the sale.

Even the auction, the outcome the investor uses to frighten families, leaves the surplus above the debt with the Suffolk County Treasurer for the former owner to claim under RPAPL 1361, which is more than a sale-leaseback typically pays. On the rare underwater Riverside loan, a short sale requires the lender's consent and a written deficiency waiver, because otherwise the lender may move under RPAPL 1371 within 90 days of the deed. A family that already signed with an investor should call before doing anything else; the transfer may be voidable, the five day cancellation period may still be open, and the foreclosure is still defensible. Nobody who is offering to take your deed is offering to help you.