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Back on the brink: Foreclosure cases to resume for some

Darcy Avolin's Freeport home is lifted on footings

Darcy Avolin's Freeport home is lifted on footings during construction to raise the house to protect from future flood damage.  Credit: Jennifer Jerome

Darcy Avolin feared she would lose her Sandy-damaged Freeport home on March 24, the day it was due to be sold in a foreclosure auction at the Nassau County Supreme Court building in Mineola.

Eight days before the scheduled auction, though, state courts halted work on nonessential cases such as foreclosures to help slow the spread of the coronavirus. The sale of Avolin’s home was canceled.  

Three months later, as state courts gradually resume hearing cases deemed nonessential, Avolin is scrambling to complete repairs so she can take in tenants and, she hopes, start to catch up on her mortgage and save her home from the auction block.

“If I lose the house I’m completely homeless,” said Avolin, 59, who suffers from ailments that include emphysema, chronic obstructive pulmonary disease and depression. “I’m on every conceivable list for senior and disability housing. But I’ll tell you something, there is not a lot out there and these [waiting] lists are two or three years long.”

The COVID-19 pandemic has given many homeowners facing hardships a temporary reprieve from foreclosure lawsuits and auctions during the shutdown. But as the economy and the state courts begin to reopen, some of those reprieves are coming to an end. On June 23, Chief Administrative Law Judge Lawrence Marks wrote that lenders can proceed with foreclosures on vacant or abandoned properties. Lenders also are now permitted to hold settlement conferences to discuss potential resolutions with homeowners, and they are now allowed to drop cases. Previously, courts were not allowing any action on foreclosure cases.  

For homeowners who face financial hardships due to the pandemic, lenders cannot move ahead with foreclosures until at least Aug. 20, under an executive order issued by Gov. Andrew M. Cuomo.

For homeowners whose hardships are not caused by COVID-19, including Avolin, enforcement of foreclosures has been suspended by the governor until Monday. In late June, attorneys who work on foreclosures said they were waiting to find out whether that deadline would be extended.

In the meantime, “the courts are looking to resolve in a settlement setting as many cases as possible to clear the docket and to try to come to what would be a fair resolution to both parties,” said Therese Doherty, a member of the law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, and chair of its financial services practice.

Kirsten Keefe, a senior staff attorney with the Empire Justice Center, a nonprofit advocacy group in Albany, said she is encouraging homeowners in distress to contact housing counselors and attorneys through the state's Homeowner Protection Program now, especially since advocates are not hearing from many clients during the shutdown. That could change as courts reopen, she said.

"It’s good for homeowners to get in as soon as possible . . . to start planning ahead, because this all will hit the fan," Keefe said. "We really want people to start calling and getting in the door."

During the shutdown, the number of new foreclosure lawsuits and auctions has declined precipitously. In the nearly two-month period from March 23 to May 17, lenders filed 18 new foreclosure lawsuits in Nassau and Suffolk counties and 63 statewide — a sharp drop from roughly the same period a year earlier, when mortgage companies sued to foreclose on nearly 900 homes on Long Island and nearly 3,500 across the state.  

The pandemic also put the brakes on foreclosure auctions, which can take place either at a state courthouse or at local municipal buildings, depending on the county.

Avolin was among 189 Nassau County homeowners who had been scheduled to have their homes sold at foreclosure auctions from March 17 to 31, state court figures show. All those sales were canceled. In Suffolk County, foreclosure auctions take place in municipalities and are not tracked by the courts. A Nesconset-based data provider, Long Island Profiles, reported that before the shutdown was declared on March 20, 165 auctions had been expected to take place in Suffolk from March 23 through 31.  

Avolin is hoping the delay will give her a chance to save her two-bedroom house, which includes a detached garage with a legal studio apartment where Avolin has been living while the house is repaired. Her parents purchased the house in 1946. Avolin grew up there, and she eventually moved back into the house with her then-husband and raised their two children there, she said. About 20 years ago, the family took out a $50,000 mortgage to fund expenses including back taxes and a used van after her car stopped working, she said. Avolin said she encountered further financial problems toward the end of her marriage and in the years after she and her ex-husband divorced in 2006.

Avolin has worked as an artist hand-drawing silk-screen designs and later as a sound engineer in clubs, but after she was diagnosed with emphysema in 2008, she was not able to work any more and she started to fall behind on the mortgage, she said. Avolin said she is on disability, but it is difficult to make ends meet. 

In 2011, her house was flooded by two major storms, Lee and Irene. In early 2012, her mortgage company filed a foreclosure lawsuit. Later that year, Avolin said, superstorm Sandy nearly “annihilated” the house, flooding her basement and first floor, wrecking floors, walls, the water heater, the electrical system and appliances, and causing structural damage to the garage.

Avolin said the repairs have dragged on as she encountered problems with previous contractors and delays getting funds from New York Rising, the state’s storm recovery program.

A spokesman for the state program said Avolin was granted an extension on its deadlines since she was the victim of fraud by a previous contractor.  

Avolin said her current contractor, Ben Jackson, president of Ben’s General Contracting Corp. in Freeport, is helping and the work is nearing completion. Jackson’s company elevated the house about 6 feet above the ground to protect it from further damage, workers are renovating the interior and they will install an exterior stair lift, Jackson said.  

“I feel for her, she’s really in a bad position,” Jackson said. Coping with the problems she has faced “is a tremendous challenge, it really is. Luckily the courts have been pretty good with her and giving her some leeway.”

New York Rising mandates inspections each time the project hits certain milestones, and it can take four to six weeks — or longer — after each inspection to receive the next round of funding, said Jennifer Jerome, a consultant with Ben’s Contracting.  

The work could be done within three months, Jerome said, “if everything runs smoothly.”

Avolin said she cannot afford an attorney for her foreclosure case, so she is representing herself. Jerome has been accompanying Avolin on court dates and helping her file court documents, with guidance from volunteer attorneys.

Once repairs are finished, Avolin said, she could either rent out the apartment over her garage, or continue living there herself and rent out the house. The rental income would let her start catching up on her mortgage, she said. But if the foreclosure auction is scheduled to take place before the repairs are finished — and if her mortgage company, HSBC, does not grant her more time — she said she worries she could lose the house altogether. With late fees, penalties and interest, the amount owed has soared to roughly $200,000, she said. HSBC and the law firm representing the lender, Westbury-based Ras Boriskin LLC, did not respond to requests for comment.

“Right now the only thing that might save the house is if we get very, very close to completion by the time we get back to court,” and persuade the lender to grant more time, Avolin said. “If I had the house finished, then I can go back to being a landlord, which means I’d be able to pay my bills again.”

Where to get help

New York State Homeowner Protection Program (HOPP) hotline: 855-HOME-456 (855-466-3456).

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