Foreclosure Prevention Project

Houses saved from Foreclosure

MFY’s Foreclosure Prevention Project helps homeowners in Queens & Staten Island keep their homes.

Launched in September 2008, MFY’s Foreclosure Prevention Project focuses on preventing foreclosures in Queens and Staten Island, two of the hardest-hit counties in the state. MFY has successfully negotiated many mortgage modifications in state court foreclosure settlement conferences, challenged the standing of plaintiffs to file foreclosure actions, and held accountable unscrupulous companies who bilk clients by claiming they will get their mortgage payments reduced.

In 2010, the Project took on increasingly complex cases and initiated litigation to enforce provisions of the federal Home Affordable Modification Program (HAMP), which was designed to promote loan modifications to enable homeowners to keep their homes. The current informal system for appealing HAMP denials is wholly inadequate and, as a result, servicers are flouting HAMP’s requirements with impunity. MFY has submitted testimony to Congress on the issue and filed a class action lawsuit to challenge Bank of America’s refusal to modify the loan of a Staten Island homeowner who had complied with all the requirements of HAMP. In another case against the same bank, MFY saved the home of an elderly Queens’ resident after the bank had illegally auctioned it, despite the homeowner’s ongoing payments.

MFY’s Foreclosure Prevention Project works with other organizations to press the state and federal governments for legislative change, advocating for reforms to provide specific penalties for servicers’ violations of HAMP, and amendments to the Bankruptcy Code to allow judges to modify mortgage loans on a person’s primary home. The project also assists neighborhood-based housing organizations to educate tenants of buildings facing foreclosure on their rights.

Jamaican Family Averts Foreclosure with Help
from MFY

Mr. O and his family moved into their new Far Rockaway home in 2001. When his wife fell ill in 2006 and could no longer work, he refinanced his mortgage. In 2007 his financial situation worsened when he was laid off and his mother, who contributed to paying the mortgage, died. By early 2008 he had fallen behind on payments.

Around the same time he started a new job in August 2008, he received a foreclosure notice. A short time later he was contacted by a company promising to take care of everything for him. He paid the company $800 and believed they were working on his problem. When he received no response to his requests for information, he contacted MFY in early 2009. MFY discovered that the plaintiff in the foreclosure action had no standing to file suit and filed a motion to dismiss the case. MFY also filed a complaint against the company that scammed Mr. O, thereby recouping Mr. O’s payment plus damages. The case hit a snag when the court misread the motion to dismiss, but MFY persisted, filing a motion to reargue, and opposing the bank’s motion for summary judgment. In the end, the judge simultaneously granted the motion to reargue, denied the bank’s motion for summary judgment, and discontinued the case. MFY referred the client to a housing counselor, who helped Mr. O arrange for a loan modification to make his payments affordable.