A foreclosure lawsuit in New York State begins with the filing in Supreme Court and delivery to the homeowner of a Summons and Complaint. When a homeowner receives a Summons and Complaint, he or she has three choices:
1. Do nothing.
2. Answer the Complaint.
3. Make a Motion to Dismiss.
Each of these options is discussed below:
1. Do nothing:
When you receive a Summons and Complaint for foreclosure of your mortgage, you are required by law to respond. The two ways to respond are discussed below. If you do not respond, the bank can get a judgment of foreclosure and possibly a “deficiency judgment.” A judgment of foreclosure means that the bank has the right to kick you out of your home and sell it or do whatever it wants with it.
If the bank sells your home for less than the amount they claim is owed on the mortgage, it can enter a deficiency judgment in court that requires you to pay the difference between the amount they say you owe on the mortgage and the lesser amount that the bank receives when it sells your home. A deficiency judgment can be for tens or hundreds of thousands of dollars.
A deficiency judgment can result in your wages being garnished, your bank account being seized, and other property being taken away. A deficiency judgment can cripple you financially. It can be incredibly expensive to resolve, either through legal action or by paying the amount of the judgment.
Rather than ignoring the Summons and Complaint, it is better to hire an attorney, or at least represent yourself, to fight the foreclosure case.
2. Answer the Complaint:
Although better than doing nothing, answering the complaint requires a great deal more work, and legal fees, than making a motion to dismiss. Every aspect of the case must be scrutinized and investigated for (1) possible defenses to the foreclosure, (2) counterclaims against the bank, and (3) possible claims against other responsible parties such as Mortgage Electronic Registration Systems (MERS) and process service companies.
Furthermore, when you answer the complaint rather than make a Motion to Dismiss the foreclosure case, it pleases the bank’s attorneys that you have taken the next step in the foreclosure process. They hope that you will continue to participate complacently in the judicial process until they can obtain a judgment of foreclosure of your mortgage, and a “deficiency” monetary judgment against you personally.
On the other hand, if you answer the Complaint, you at least get your day in court. In some cases, if you win the foreclosure lawsuit, you can keep your home free and clear of any mortgage. It is also possible to be awarded monetary damages against the bank suing you and other responsible parties. This is the goal of the LeNoir Law Firm’s legal strategy of Debt Inversion.
However, you can still answer the Complaint later if you lose the Motion to Dismiss. But while the Motion to Dismiss is being decided (which can take many months), you can stay in your home.
3. Make a Motion to Dismiss:
A motion to dismiss in a foreclosure case is a request to the court that the entire case be thrown out of court because something was not done or was not done correctly. If there is a good reason to make a motion to dismiss, the LeNoir Law Firm will usually make a motion to dismiss rather than answering the foreclosure complaint. However, every law firm practices law differently, and this is not legal advice.
The reasons that your attorney may use to make a motion to dismiss are limited only by the law and your attorney’s imagination. We cannot begin to discuss all of the reasons why a foreclosure case might be dismissed, but in the next two articles in this series, we will discuss the following common reasons for dismissal of a foreclosure action in New York State:
A. The plaintiff lacks standing to bring the foreclosure case. This means that the bank trying to foreclose cannot prove that it owns your mortgage and promissory note. If the bank does not own your mortgage and promissory note, it has no right to foreclose.
B. The court lacks jurisdiction over the defendant. This means that the home owner has not been served properly with the summons and complaint and other documents required to start a foreclosure case in New York State
Each of the above reasons for dismissing a New York State foreclosure case will be discussed in Parts 2 and 3 of this series.