Success! – Another TRO in the Bronx Stops A Foreclosure Sale

A client came to us last week on Wednesday and said she was told she had a foreclosure sale scheduled on Monday. I have encountered this scenario many times. She retained my firm and we got to work immediately, going into emergency mode.

She did not want to file Chapter 13 bankruptcy, and, in any event, was not eligible because she was over the ceiling for maximum secured debt. That left Chapter 11 as an option but she very strongly did not want to consider that. Bankruptcy is usually the first thing to consider because the filing gives rise to an automatic stay – an injunction that freezes/stops a foreclosure sale and actually all collection and litigation by anyone as well.

So, we moved on to the next option which was to file an order to show cause and seek a TRO – temporary restraining order. I have blogged on this before and readers can probably find earlier blogs using the Search/Find function on this page.

The issue with an order to show cause is that it is a lot of work and to get the TRO you must persuade the Court that you have a good reason. In this case, we did.

I prepared the client’s affidavit explaining the facts, my supporting affirmation setting out the legal reasons, and of course the order to show cause. My office organized and assembled all of the exhibits. We called former attorneys and downloaded records from the Bronx County Clerk’s site and then I analyzed and outlined the legal arguments.

The client contended that she was not served with the summons in the action originally and had submitted a late answer through another former lawyer when she did become aware of the lawsuit. She had not moved earlier for an order to allow the late answer or to vacate her default because she and her lender were actively engaged in workout negotiations. Then she alleged that her lender had actually given her a written forbearance agreement and she made all of the required down payments totalling over $16,000 and still the lender falsely rejected it and returned her money. I reviewed her proof and it appeared that she was correct about this.

After this she got the runaround and was scammed by using a non-attorney loan modification company that was later shut down by the Attorney General, and after that she used out-of-state attorneys. She was in the foreclosure mill for a long time getting nowhere. Ultimately, one of the many lawyers she had retained got a voicemail that from the lender’s servicer telling him that they were denying the loan mod request and going to reschedule the sale in about a week. It had apparently been postponed previously although the court minutes contained no record of that when I checked. No written decision or notice of sale was sent. Just voicemail notice of the sale.

This appears to be the new method that servicers have invented although it is not permitted in the laws. Think about the audacity – voicemail notice that you are going to sell someone’s home.

I gave my adversary, a well known foreclosure firm, 24 hours notice. That Friday morning I went to the Court and paid the filing fee at the County Clerk and walked the papers through personally in order to get them processed by the ex parte clerk in the Civil Division in Room 103. By around 4pm the Court had faxed us the order to show cause with a TRO signed by the Judge.

I was so impressed with the courtesy and efficiency I encountered at the Bronx Supreme Court. I was honestly not expecting it but the Court did its job and did it well. Many years ago, I had encountered very different experiences at that Court but this time the Court was a model of efficiency and for now we stopped the foreclosure sale. Needless to say, our client was ecstatic. We are of course not done yet. We still have a hearing scheduled on the motion soon but for now our client’s property is safe.