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Foreclosure Project

Cases & Credits

A couple convinced to take a faulty loan

Mr. and Mrs. O. purchased their single-family home in Brooklyn in 1975 for $16,500. In 2002, when the house was paid in full, a contractor canvassing the neighborhood convinced them to take out a mortgage to do some remodeling and introduced them to a lender. Through an unfortunate series of refinancings and lost jobs, a foreclosure action was filed, at which point Mrs. O. came to the City Bar Justice Center for help.

A pro bono attorney volunteered to handle her case, and the Federal Reserve Bank of New York, as part of its sponsorship of the Foreclosure Project, performed an analysis of the loan documents. They discovered that the loan was not in compliance with the Federal Truth in Lending Act. As a result, the bank will lose the house as collateral for the loan, and Mr. and Mrs. O. will have several options for taking care of their debt. With pro bono assistance, this elderly couple will be able to rescind the transaction and keep their home.