The last few years have seen an unprecedented amount of foreclosures in America, especially in New York. Though all homeowners have the right to fight the lenders who are trying to foreclose on them, most cases are unsuccessful. Many homeowners have been forced to represent themselves in foreclosure proceedings as the cost for legal representation is too high.
Even worse, most lenders have a clause in their contract allowing them to recoup legal fees from the homeowner if the lender wins the foreclosure case. This leads to even more financial debt for the homeowner if the foreclosure case is lost. Some homeowners won’t even try to fight their case out of fear of the potential legal fees they would be responsible for.
New York State just passed the Access to Justice in Lending Act (AJLA), a law that allows homeowners to recoup their legal fees from the lender if they successfully defend their foreclosure case. Now, homeowners are one step closer to being on an even playing ground with their lenders.
Assemblyman Lancman hopes this new law will encourage those facing foreclosure that have a legitimate defense to seek legal representation and fight their case, according to the International Business Times. He also believes that firms specializing in foreclosures will be more willing to represent homeowners now, as there is a guarantee that their legal fees will be paid if they win.
Gersowitz Libo & Korek, P.C. is pleased that New York State is taking steps in the right direction to help struggling homeowners during this economic crisis.