New York foreclosure rates rose 67% in July 2008 as compared to figures of the same month last year according to Gothamist intensifying New York’s statewide foreclosure crisis.

The New York Post reports that Queens foreclosure rates represented half of the total number of seized houses in the city with 178 homes foreclosed. This figure represents an 81% increase in the foreclosure rate year over year. Brooklyn followed with a 63% increase, a 16% rise in Bronx, 7.6% in Manhattan and lastly, a 215% leap in Staten Island.

The rising foreclosure rate, combined with a low number of houses being sold, have sent the median sales prices in New York plummeting.

Meanwhile, the New York court system has been looking to different ways to help the homeowners that are having a hard time keeping their homes. This, combined with New York’s newly-enacted law requiring 90 day’s advance notice of foreclosure auctions, may provide some measure of temporary relief to homeowners at risk of losing their homes to foreclosure.

Still, most homeowners facing foreclosure are unaware that valid foreclosure defenses exist. New York homeowners may contact me or call toll-free to 800-497-5717 to set up a free, no-obligation telephone consultation to discuss their options.

Faced with a 150 percent increase in foreclosures since January 2005, Chief Judge of Judith Kaye has set up a pilot program in Queens to find out if a dedicated foreclosure court is necessary to handle these types of cases.  One part of the plan, which will be voluntary, is a settlement conference to help alert the borrower to possible options.

“New Yorkers are losing their homes in record numbers,” the judge said at a Manhattan news conference announcing the program. “Some neighborhoods are being ravaged by foreclosures. Can we be part of an influence for the good?”

This is good news for consumers who are going into, or are already in, foreclosure.  The judges hearing there cases will be more attuned to the subtle nuances of foreclosure defense, including the complex securitization aspects of how mortgages are transferred, packaged and sold.  This will give homeowners a better chance at defending foreclosures and ensuring a more just result.

You can fight a foreclosure within the time period set by law (usually 20 days after you were personally served with the foreclosure Complaint, 30 days if you were served by mail or other means). Once that time has passed, you are legally in default and your time to answer has expired.

This is not, however, the end of the world. If your time to answer has expired, you will need to get the court’s permission to file and serve a late answer. Many courts will allow you to do so if you have a good defense in the case, as well as a good reason why you didn’t file an answer in a timely manner. It’s also smart to call the bank’s lawyer to get their consent, in which case you wouldn’t need to get the court’s permission at all - but if they don’t consent, letting the court know in your request will show that you’ve done your best to solve the problem on your own.

If you are served with a foreclosure and file for bankruptcy during the time to answer, then that time clock stops running while you’re in bankruptcy. So if you’re served with the Complaint and then file for bankruptcy on Day Ten, you will still have at least ten days to file an Answer once the bankruptcy ends (or if the bank gets relief from the automatic stay).

The case of Indymac Bank, FSB v. Ross, Supreme Court, Kings County Index No. 24713/07 (January 15, 2008) began normally enough. Indymac filed a summons and complaint on July 6, 2007. The borrower failed to appear or answer, and Indymac asked the court to grant a judgment of foreclosure on default.

What Indymac got was a denial not only of the judgment, but a denial of the entire foreclosure case.

The original lender of the subject October 4, 2006 mortgage was Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Mortgageit, Inc. MERS then assigned the loan to Indymac. But that assignment was not dated until July 11, 2007 - five full days AFTER the foreclosure was filed.

Though the assignment states that “[tjhis assignment is effective on or before June 1, 2007,” the court found such retroactive assignment to be ineffective.

The court stated as follows:

. . . such an attempt to retroactively assign the mortgage is insufficient to establish plaintiff’s ownership interest at the time the action was commenced. See Countrywide Home Loans, Inc. v. Taylor, 17 Misc3d 595 (Sup. Ct. Suffolk Co. 2007). Plaintiffs attempt to foreclose upon a mortgage in which it had no “legal or equitable interest was without foundation in law or fact…” Katz v. East- Ville Realty Co., 249 AD2d 243 (1st Dept 1998). See US Bank Nat. Ass’n v. Merino, 16 Misc3d 209, 212 (Sup. Ct. Suffolk Co. 2007). Moreover, “foreclosure of a mortgage may not be brought by on who has no title to it….” Kluge v. Fugazy, 145 AD2d 537, 538 (2d Dept 1998). See RCR Services Inc. v. Herbil Holding Co., 229 AD2d 379 (2d Dept 1996). Finally, plaintiffs standing to bring the within action goes to the basis of a court’s authority to adjudicate a dispute. See Stark v. Goldberg, 297 AD2 203 (1st Dept 2002) (wherein the court held that sua sponte dismissal of the action was warranted despite the lack of any assertion by defendants of an objection to plaintiffs’ standing) .

So what does this all mean for you, the person going into foreclosure? It means that it’s important for you to fight back and to defend the foreclosure. Don’t think that there’s no hope for you, that an inability to pay the mortgage means you automatically lose. You have powerful rights, and need to be sure to use them.