SPECIAL TYPES OF FORECLOSURES:
The Co-operative Apartment:
Technically, the non-judicial sale process for co-ops isn't "Foreclosure" at all, but for convenience sake I will use the word "Foreclosure".
Co-ops are generally thought of as real estate, but legally they are not real estate. You own shares of stock and you have a Proprietary Lease. All of this sounds theoretical but the real-world consequence is that your co-op can get foreclosed much, much FASTER than any piece of land can be. This is because Co-ops are subject to Non-Judicial Foreclosure. The court process greatly slows down the foreclosure of land. With a co-op they do not need to take you to court at all. The Lender will move quickly. You must move quickly, too.
Another result of this is that you do not a have a Judge involved in the foreclosure. If you have a dispute with the Lender, you may have to take the initiate and SUE THEM in order to get the matter before a Judge. This is because they will probably just proceed with a quick auction sale despite your protests. If you have to sue them this shifts to you the burden of instituting the court action. Things like having the summons served and paying various court filing fees become your problem instead of theirs.
How an Attorney Can Help: This is an emergency situation and you need to move quickly. Oftentimes this means negotiating with the Lender AND preparing litigation papers against them at the same time. The minimal amount of time involved means that if a workout cannot be reached then the matter needs to get before a Judge ASAP.
Real Estate Tax Foreclosures:
There are several different scenarios for real-estate tax foreclosures.
Traditional Tax Foreclosure:
This is the familiar model most people think of. Similarly to a mortgage foreclosure the taxing authorities serve a Notice of Sale setting a date for an auction of one or several properties which are delinquent in their taxes.
How an Attorney Can Help: Similar to a mortgage foreclosure an attorney may be able to negotiate a workout or contest the matter. Certain charges may be able to be contested. The government will want you to pay first and seek a refund later but even if you have to do this you still want to resolve these kinds of issues so that they do not recur.
Lien Sales: Who in the world is JER and why are they foreclosing me?
Some municipalities, like New York City, instead of foreclosing their own tax liens SELL those liens to investor groups like JER (formerly known as JE Roberts) and XSpand. After this happens the taxpayer owes those delinquent taxes to the private investor group rather than the municipality. The investor group then does either a workout or forecloses. Besides New York City JER is active in Buffalo, Binghamton, Syracuse and other upstate cities. XSpand is active in Hempstead and Eire County. Both of these companies are marketing themselves to other municipalities as well.
How an Attorney Can Help: Before the lien is sold, an attorney could negotiate with the municipality for a workout. There are also some restrictions on which liens can be sold and which cannot. For example, active duty military personnel may request that New York City not sell liens against them. It is better for the taxpayer if the lien is not sold. The lien purchasers get to charge a 5% surcharge and 18% interest. (These are the NYC amounts. These amounts may change). Even after the lien is sold an attorney could negotiate a workout with the lien purchaser or contest the validity of disputed amounts.
Third Party Transfer Program: What do you mean they don't want the money anymore?
New York City has a Third Party Transfer Program. Tax delinquent properties, generally rental apartment buildings with a large number of building violations, get funneled into the Third Party Transfer Program. The end result of this is NOT an auction sale to the highest bidder like a normal foreclosure. The end result of this is a "transfer to a responsible owner". In other words, the City just GIVES YOUR PROPERTY AWAY. Forget about any surplus money here. Worse yet, this program is run out of HPD (Housing Preservation and Development) . The Department of Finance just wants to get paid. JER and XSpand just want to get paid. Not so with HPD. HPD will form an opinion about whether or not you are a bad property owner and if they think you are they will fight very hard.
How an Attorney Can Help: First priority is that you do NOT want your property to go into this program in the first place. If addressed EARLY ENOUGH steps may be taken which could keep you out of this nightmare altogether. If you are already in the program there are still some ways to help, either with the courts, HPD or the City Council.
The Unknown Plaintiff:
On rare occasions one comes across a scenario wherein the homeowner has a lis pendens (a/k/a Notice of Pendency) filed against their property by someone they've never heard of. The Homeowner has no problem with mortgage (they may not even have a mortgage) or taxes, but they are getting tons of mail from people who got their name off a list of lis pendens. It must be some mistake.
How an Attorney Can Help: Maybe it is a mistake. Maybe someone was staying up late into the night preparing lots of lis pendens and they entered the wrong block and lot number and this thing really did get filed against you by accident. Still, its a cloud upon your title, which can interfere with selling or refinancing your property until someone can make it go away. A simple mistake like that should be fairly simple to resolve.
The unknown plaintiff could also be an adjoining landowner or someone else who is claiming some sort of rights over your property. This could affect the use and the value of the property.
These days it could also be that some identity theft criminal has forged your name to a home equity loan and disappeared with the proceeds. The Lender, having not been paid, is now trying to foreclose.
Mysterious happenings which threaten the title to your home need to be properly investigated so that you can respond to them appropriately. I understand that people resent having to pay an attorney to handle something like this especially if they haven't done anything wrong. But if some unknown vandal broke your front window you'd pay the glass company, wouldn't you?