In an earlier post, I mentioned that one of the unanticipated consequences of falling behind on your mortgage and finding yourself in foreclosure is that you’ll start to get solicitations from people who are trying to buy your house. I know that this causes discomfort. This week, I heard three real life stories about this from three different people who showed me just how deep this discomfort is. That’s why it’s the subject of my blog post this week. What you’re about to read are true stories.
First, some background. There are people who are in the business of real estate investing. They’re like the people you see on television on any of those house flipping shows, except they’re way more sketchy and far less attractive. I call them “sharks,” because they circle when they smell blood in the water. They have learned the secrets of buying real estate for little or no money down from infomercials or other shady seminars, and one of those secrets is the method of checking all of the notices of pendency filed in a specific county and sending solicitations or otherwise aggressively trying to purchase a property that is the subject of a notice of pendency. The fact that a notice of pendency is filed means that a piece of property is under siege. Most of the time, a quick glance at the caption shows that a bank is plaintiff, and most of the time, that means that the property is in foreclosure. The sharks smell blood in the water, and to them, the defendant homeowners are desperate to do anything to get out of foreclosure, which includes selling their property to the sharks for less than what the property is worth. Trust me; this is what the sharks are trying to do. They’re trying to buy your property for less than what it is worth. They do it under the guise of helping you get out of foreclosure. It’s their business to do this.
Story #1: “Ms. A” bought a home in 2016. The home was in foreclosure at that time, but Ms. A took out a mortgage to purchase her new home, and the mortgage proceeds were to pay off the prior owner’s mortgage that was in foreclosure. Due to the prior mortgage holder’s mistake, Ms. A’s mortgage proceeds were applied 8 months later, and by that time, the money that was sent 8 months earlier wasn’t enough to pay off the prior mortgage. There was like $8,000 left on the prior mortgage. The prior owner moved to Florida and Ms. A was going along fine. A year later, the prior mortgage holder commenced a foreclosure action, naming the prior owner and Ms. A. Ms. A has been dutifully paying her mortgage in full and on time, yet she found herself a defendant in a foreclosure action. I met Ms. A in court, and she told me that the worst part about this whole thing is the mail. She told me that she gets a stack of letters in the mail each day, from foreclosure defense attorneys, modification “magicians” and real estate sharks all trying to pry money away from her. She collected all of the mail until it filled up one of those paper grocery store bags, which took all of a month, at which point she decided that she couldn’t hold on to all of this junk mail anymore and started shredding the letters. It’s taken a real toll on her and her children.
Story #2: “Mr. B” is the owner of a condo in a posh Manhattan apartment. He is not and has never been in foreclosure. A bank failed to record a mortgage against his property in 2003, so they had to start an action to compel the City Register to record copies of the mortgage as if they were originals. The City Register is only allowed to record original documents. When the action was started, it has Mr. B as a defendant and a bank as the plaintiff. The action is not a foreclosure action, but the sharks haven’t actually read the complaint. They just see a notice of pendency and a bank as the plaintiff, so they send him all their mail. The doorman is getting visitors and is calling up to the apartment to get Mr. B’s permission to let the visitors up. Mr. B doesn’t know these sharks and certainly doesn’t want them coming up to his apartment. Because everyone knows everyone’s business in this building, his neighbors are now looking at him like a guy who can’t pay his bills. He’s a multi-millionaire, he has no problems paying his bills, and he’s utterly humiliated. I had a thirty-minute conversation with him encouraging him to stick it out, but unfortunately, I didn't have any real solutions to his discomfort.
Story #3: “Ms. C” is a person in foreclosure for the last eight years. Out of these three stories, she is the only one who is not completely innocent in this. She hasn’t paid her mortgage in a long, long time. Her credit is completely shot, and she recently filed bankruptcy to avoid a foreclosure auction of her house. Ms. A and Mr. B from the stories above have only been dealing with this for a few months, and they are at their wits’ end. Ms. C has been dealing with this for almost a decade, and her mental health has taken a toll. Ms. C’s lawyer told me that Ms. C actively believes that everyone is trying to steal her property from her. She’s partially right to believe this because she’s endured eight years of mail, telephone calls, and visitors, all from strangers trying to buy her house for less than what it’s worth. Recently, Ms. C accused her mail carrier of trying to steal her house. The mailman was approaching Ms. C’s house with the mail, and Ms. C screamed at him to get off of her property and that it’s not for sale. Ms. C accused her own attorney of trying to steal her property.
Now while some people may be predisposed to having these kinds of episodes, you can’t help but wonder what the long-term effects are from dealing with the constant barrage of solicitation. Paranoia is probably the most natural response to this, and I don't have to tell you that the effects might be far worse. So how do you get yourself out from under this?
To get the solicitations to stop, you have to get yourself out of foreclosure. There’s no other way. It’s not by succumbing to the sharks, either. There are lots of ways to get yourself out of foreclosure the right way. Once the notice of pendency is cancelled, the letters will stop. Yes, I’m biased, but an attorney who is looking out for your best interest will be best able to provide options that are suited to your particular situation.
Jason Sackoor is a real estate attorney in Queens, New York concentrating on foreclosure and real estate litigation. You can check out his website, e-mail him, or call his office at (718) 767-3333 to set up a consultation.