Seek Help Early

Posted by kevin on December 14, 2011 under Foreclosure Blog | Comments are off for this article

Last week, I argued before the Appellate Division to set aside a default judgment.  My client had good arguments that the loan was predatory, that the plaintiff lacked standing and that the Fair Foreclosure Act may have been violated.  However, the judges focused on the fact that my client never hired a lawyer until more than a year after default judgment had been entered.  I made creative arguments to get around this “bad fact”- arguments that are a little too detailed and, perhaps, too boring to be presented here.

Without going into detail, there is a lesson to be learned irrespective of how the Appellate Division rules.  When you get served with a Notice of Intent to Foreclose or a Complaint, hire an attorney to file an answer.  I know that at the same time these papers are coming in, the servicer is bombarding the borrower with letters about modifications containing statements that the lender wants to work with you to save your house.  That is usually a lot of hot air especially when you look at the dismal percentages on permanent modifications being granted even at this late date.

The bottomline is that the lender or servicer is lulling you into a false sense of confidence.  Flirting with you about working out a deal while its lawyers are moving forward in court.  Don’t be the dupe.

I know that there are rules that allow a defendant to overturn a final judgment by default.  But to do that, you not only need to show a meritorious defense.  You must show excusable neglect.  Now, that is a term that means pretty much whatever the judge wants it to mean.  Years ago, and I mean over 25 years ago, the cases on excusable neglect talked in terms of giving the defendant his or her day in court so that the case could be determined on the merits.  An element of justice was involved.   Not so, anymore.  Judges are under pressure to move their calendars.  They get a report card each year which considers how many cases they have resolved (or got rid of).  You see, if the default judgment is overturned, then the judge gets the case back.  Not good for the report card.  But if the judge could point out that the defendant sat on his hands for a year or two before he finally woke out and hired an attorney, then that defendant does not deserve a second bite at the apple.  And, in some cases, I actually agree with the court.

So a word to the wise.  Get hit with a foreclosure complaint.  Make sure you file an answer.  Preferable make sure you get an attorney who knows what he is doing to file the answer and represent you.