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Is Foreclosure Even Legal? Why Can the Bank Take My House?

Law Office of Ronald V. De Caprio Aug. 4, 2016

Home ownership is a goal for many New Yorkers but not all individuals can pull together enough money to outright buy the residences of their dreams. For most home buyers it is necessary to first secure a mortgage before acquiring the keys to a new property. A mortgage involves a loan that a person is expected to repay over time and often with interest so that he may eventually acquire full ownership of a piece of real property.

As such, before a person has fully paid off his mortgage his lender still has some ownership rights in the property subject to the loan. Just as a person may reclaim a parcel of personal property that he may loan to another person, a lender may reclaim a piece of real property that it owns and that its borrower has not yet paid off. Though mortgage lenders do not foreclose on homes when the homes’ mortgage payers are current on their obligations, when mortgages fall into default then the lenders may move toward foreclosure to protect their financial interests.

Defaulting on a mortgage will usually be defined in the terms of a home buyer’s mortgage agreement and New York state law. Many agreements stipulate when mortgage payments are due and the sum that is due for each payment; a default generally involves paying late, paying an amount less than what is owed, or simply not paying at all. As lenders have an interest in recouping the sums of money they have allowed home buyers to use to purchase homes, it is in their interests to take steps like foreclosure to see that they get their loaned money back.

For some individuals understanding foreclosure may be the first step to avoiding the process. In some cases a foreclosure proceeding may be stopped if the mortgage payer pursues bankruptcy or another debt relief plan to proactively address his mortgage deficiencies and debts. To learn more about foreclosure and steps one may take to avoid it, readers are encouraged to contact their bankruptcy and debt relief attorneys.