Law Office of Carol Ryder and Associates

Jan 2014

The Consumer Financial Protection Bureau (hereinafter "CFPB"), which was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, issued new mortgage servicing rules that went into effect as of January 10, 2014. Among other things, the rules restrict dual tracking.

Under the new rules, a mortgage servicer cannot initiate a foreclosure until 120 days after you fall behind in payments (which provides a reasonable amount of time to submit a loan modification application). Also, the servicer cannot start the foreclosure process if a loss mitigation application is pending.

If you submit a complete loss mitigation application to your mortgage servicer after the foreclosure has started, but more than 37 days before a foreclosure sale, the servicer must stop the foreclosure process until:

  • the servicer informs you that you are not eligible for any loss mitigation option (and any appeal you make has been exhausted)
  • you reject the workout option that the servicer offers to you, or
  • you accept a workout, but fail to comply with the terms of the deal (such as not making payments during a trial modification).

List of some more info on various settlements between government agencies and lenders/servicers [Note: "Dual tracking" is the official term for something different than New York foreclosure attorneys' references to NY's "dual track" system. This is the "dual track" with a complaint being filed, initiating the legal end, with paperwork, but that "train" sits at the depot while the mandatory foreclosure settlement conferences are going on on another track. The other train running towards foireclosure sits in the depot until the FSC process doesn't end in a settlement or the borrower fails to Appear and/or cooperate by providing paperwork, thus being in default on that track. one track, 


NOTE: Please be advised that information here, on the telephone and e-mail does not create, infer or imply an attorney -client relationship. ONLY sitting down with us and signing a Retainer does such.  However, we do welcome the opportunity to do such and be of service. Additionally, the information provided here is merely to help guide you, along with other research you may conduct, into obtaining formal legal representation. 

There are no guarantees in any case, although we will strive zealously to get you the best results.

Call (631) 848-1204 anytime, even weekends-we know you may be nervous AND time is tight with a foreclosure defense in court. 



[Please click at the bottom for information on government settlements with lenders and/or servicers]

Preface/warning: No matter what, including being in negotiations with the lender and actively attempting to modify your mortgage, even participating in a trial period, you MUST file an Answer within 20-30 days of service (depending on how you were served) of the Summons and Complaint for the foreclosure action OR If you do not, and the mortgage modification process fails, you are considered "In default" on the lawsuit. The lender can, and almost always does, even IF you later get an attorney, essentially "goes behind your back", known as "ex parte", and proceeds with the foreclosure action without even notifying you; they file a motion called an "Order of Summary Judgment", which the court almost always grants to lenders, which gives lenders the right to go all the way to auctioning your home, known as "an Order of Reference" .


"Get your own attorney" is not a self-serving statement: Carol Ryder has been doing work with various excellent but woefully underfunded ( pro bono programs where they even had to lay off attorneys that were working for peanuts, all due to NY State budget cuts in pro bono services and even in the courts, including clerks to help parties. However, the greatest fear many of us participating in these programs is that there are not enough judicial resources by 50-fold  to provide people with pro bono Answers, let alone to follow with additional legal work required, and this is costing people their homes.  Some, people don't realize that getting a paid attorney with experience and knowledge of foreclosures and bankruptcy is the best investment they can make in their homes. Carol Ryder and others have been vocal about this, working with lawmakers and good people running for office,  but in the meantime, people who receive that Summons and Complaint need to contact the resources listed, but then make a determination quickly to hire an experienced foreclosure attorney, even if it is in the 18th hour. 

We can help you if you have not filed an Answer, including asking the lender to voluntarily accept a late Answer, which we will write, or if they say no, warning them (courts prefer lawyers work it out first) and then putting in a Motion to Compel them to accept a late Answer. However, it is better if you file a  timely, properly written, filed and served Answer, which is far more detailed  a process than folks think. Borrowers without experienced Counsel also lose out on many defenses, even ones that can have the case dismissed, your legal fees paid, and more.

In some cases, we may decide to file something that preserves your rights that may be about to expire, such as a "Pre-Answer Motion to Dismiss" but, without getting technical on this site, this can be a delicate process. We can file a "Verified Answer" with the same argument about, for example, the borrower not being served, where he/she swears to it, but again, this is useless if the technicalities, such as then filing a Motion to Dimiss within 60 days, is not observed.

An added benefit is that active litigation gives homeowners far greater power to get the best deal available. We can also, simultaneously while litigating, engage in negotiations with the lender's attorney to modify your mortgage, something they may have previously denied you.  Additionally, government settlements with lenders come out all the time BUT many homeowners are not seeing a dime of these billions of dollars (e.g. "49 state settlement"). However, we are on-top of these and can help you get your fair share, including, for example,  a lower interest rate, as low as 2% and/or a longer term to pay off, such as 40 years and/or a principal reduction and/or,  in some cases, cash right now. We also make sure the deal does not get you into a mess with the IRS, such as a principal reduction that goes on your taxes as income; this is a big problem because not only will you need to pay the IRS, for example, $33,000 for a $100,000  income you can't even wait until April 15 to pay taxes on.

In your Answer, we assert defenses that are "speak now or forever hold your peace" defenses and counterclaims, among others. There are numerous laws requiring lenders to cross every t and dot every i, and an experienced firm can find errors in so many ways. These are legal technicalities a firm with experienced attorneys knows how to argue as cause for dismissal; in many cases, the court, even if it is prone to want to NOT dismiss actions on technicalities since the underlying issue is the homeowner failed to pay his/her mortgage repeatedly, it MUST do so. Those errors may require dismissal of the case, in some cases permanently, where the homeowner gets clear title and no mortgage to pay. For example, you are supposed to be served certain notices and the Summons and Complaint written and served properly, with proof of service on you filed with the court. Failure of the lenders to follow these conditions precedent render the case null ab initio ("from the beginning"). They may re-file BUT are usually more open to settlement that we feel is a good, or even fantastic deal, for the client.

There are many cases where the party filing the action doesn't even own the loan and thus has no right to sue, known as "lack of standing". However, if there is no experienced firm to point this out, the case still, almost always,  proceeds to foreclosure. Similarly, there are also cases where no one can ever figure out who owns your mortgage.This is because mortgages are usually re-sold, often packaged into bundles of mortgages and sold as securities on Wall Street, a process known as "securitization". ONLY the entity aggrieved in a legal action may sue, and in mortgage foreclosures, only the entity that owns your mortgage and note can sue. The list of defects an attorney can find are lengthy. Our standard Answer has over fifty Affirmative Defenses and Counterclaims, and we do the digging to find out if, in fact, this party owns your loan. There are many other arguments that go into securitization-related defenses and it takes not only experience but experience in Finance, preferably Wall Street. Carol Ryder is a long-time "Wall Streeter" and now, lawyer as well, and our associates have been working in foreclosures and bankruptcy for decades.. 

The foreclosure process in NY is a "dual track" system where mandatory foreclosure settlement conferences are held while the "train" on the other track, the legal actions "train" (e.g. Answers, Motions, etc.) is held in abeyance, otherwise known as an automatic stay, pending the results of the Foreclosure Settlement Conference. In the Foreclosure Settlement Conferences, mandatory as per law for lenders and rarely is it a good idea not to attend, the court oversees the mortgage modification process. This is very unlike the way normally people who have tried to modify their mortgages. Here, you or your lawyer deal directly with the lender's attorney, who can't just "lose" your documents and/or otherwise not proceed diligently. They sometimes do operate in bad faith BUT, here, there may be recourse if the lender's attorney fails to adhere to the court's directives.

What is the new trend to worry about is the fact that at the very first conference, if it is clear to the court you can't qualify, they may terminate you from the Foreclosure Settlement Conference track immediately. This lifts the automatic stay on the other track and the lender will proceed to go forward with the foreclosure and sale. Sometimes, it turns out people CAN qualify if there is someone there who has examined the homeowner's financials and knows things perhaps the homeowner alone may not have known to present to the court. This has happened on a number of occasions in my experience, where, had this person been unrepresented, the Foreclosure Settlement Conference track would have been terminated and the automatic stay lifted.

Once the Foreclosure Settlement Conference track ends, the lender begins moving forward with the foreclosure and auction. There are a number of ways we can help, even IF you didn't file a timely Answer. Ultimately, it may even be suggested that bankruptcy may be your best option, and we can do that as well. 

So, please call as soon as you receive any legal notice, and definitely if you have been served with a Summons and Complaint. We can help in so many ways.


There are many claims and defenses to foreclosures, including lender abuses in NY, and protections to aid those at risk of losing their homes. Here are just some (and a consultation with an attorney can uncover more options): ***

***Note: Some lenders may demand that you waive such defenses when they agree to a loan modification , for instance, where the loan modification does not work out and the case proceeds to a foreclosure action in court). Again, this is why it is important to retain an attorney. 

• In general, there are all kinds of protections (governed by Federal and/or NY State law) against unscrupulous lending practices, outright theft, unconventional mortgage rates; for example, Adjustable Rate Mortgages that MIT mathematicians couldn't even calculate, and so many more. There are also rules on special large fonts, warnings for borrowers of certain rights, even specially colored paper in notices…too many to mention here but here are some, and we use whatever we have to to defend our clients zealously:

• Lender (Plaintiff) must have standing and capacity to sue-must own both the note and the mortgage at the time of inception of the action; there are a number of defenses based on lack of standing,  we use routinely for clients

 Real Property Law (EG: RPAPL § 1304)

• NY Civil Practice Law and Rules (CPLR) §3408

• Deceptive Practices Act (General Business Law §349)

• Banking Law §6 et. seq. and NY State Department of Financial Services

• Conspiracy to Defraud

• Aiding and Abetting Fraud

• Unconscionability (legal term for “just too one-sided, no reasonable alternatives…)

• Breach of Contract

• Duress

• Coercion

• Inability to Contract

• NYS Human Rights Law (Executive Law, Article 15, § 298-a):

• Defenses based on the mathematics and costs, such as prepayment penalties, ultra-short teaser rates, etc. (are in many laws)

• Criminal Residential Mortgage Fraud (range from a Class A Misdemeanor to a Class B felony, and are included in the Penal Law, Banking Law and Criminal Procedure Law)

• Mortgage broker is supposed to act in the best interests of the borrower and may be held legally accountable (as can others involved in the transaction for various other reasons-e.g. r/e broker)

• Home Equity Theft Protection Act-requires lenders to warn borrowers very noticeably (specially colored paper) (also NY RPAPL §1303)

-Failure to give borrowers 90-day notice (NY RPAPL §1304)

• Violating HAMP guidelines, including moving to auction the home when there is an active loan modification pending

• Failure to place borrower into Mortgage Modification "track" with special rules going way back for sub-prime/non-traditional/high-cost loans in effect even before the Mandatory Settlement Conferences "track" was mandated for all foreclosure actions

• Failure to diligently proceed (in layperson's terms) by filing for a default judgment [CPLR 3215(c)]  within one year of the default

• Violating the terms of the Trust (a majority of mortgages are securitized, and a Trustee oversees the pools of securities)/ultra vires acts of the Trustees 

• Various failures to file the proper paperwork with the Complaint and/or to file them with the County on-time (many variables here, as well as arguments on standing when Note and Mortgage have different parties on them, have an interest., "Does the Note Follow the Mortgage", .and so much more) 


These are just some of the federal defenses to mortgagee (lender, bank, etc.) abuses one can use in court and/or programs one can use to help modify a home loan

• Mathematical errors on HUD statement and TILA statement (received when mortgage taken out)-do the # of payments add up, is the APR calculated correctly, points improperly calculated and many more.

• Truth in Lending Act (“TILA”) 15 U.S.C. §1601, et. seq., 12 C.F.R. §226, et. seq. (Regulation Z)

• Real Estate Settlement Procedure Act (“RESPA), 12  U.S.C. § 2601 et. seq. 24 C.F.R. § 3500 et. seq.,

• Equal Credit Opportunity Act (ECOA) 15  U.S.C. § 1691

• Federal Civil Rights Act,  42  U.S.C. § 1981, 1982

• Fair Housing Act (FHA), 42  U.S.C. § 3604, 3605

• Borrowers with loans that are insured by the United States Department of Housing and Urban Development (otherwise known as HUD or FHA-Insured loans) have additional loan workout options. To tell if you have an FHA loan, look on your mortgage stub, closing papers, check on-line, and/or or call HUD. 

 Homeownership and Equity Protection Act (“HOEAPA”), 15 U.S.C . § 1639-like FHA-insured loans, offer special protections to borrowers

• The Homeowner Affordability and Stability Plan (announced by White House 2/25/09)-gives incentives to lenders to work with borrowers, even those who first fall behind, and even incentives to borrowers to stay current on their mortgages