Foreclosure defense as a niche practice area has been an evolving response necessitated by the fallout from the mortgage crisis. Stated simply, the housing bubble of the early 2000s deflated when it was revealed that the mass securitization of mortgages was severely undercollateralized. Amid the resulting chaos, the banking industry collapsed and the impact was felt globally. The federal government enacted emergency legislation to allow bank bailouts and The Dodd-Frank Wall Street Reform and Consumer Protection Act changed the entire landscape of the mortgage lending industry as we knew it.
Federal legislation did not, however, offer much assistance locally or to individual homeowners who faced plummeting home values and staggering payments on high cost and subprime predatory loans that had been given out like Halloween candy during the boom. Homeowners cashed out all equity in their homes that were appraised at unrealistic and overly inflated values. Homeowners who in all rational markets would never have been approved for mortgages with low income and bad credit only had to demonstrate they had a pulse to get approved. New York was one of the hardest hit with an overwhelming number of foreclosures and homeowners in severe financial hardship. As of 2017, foreclosures in New York are still at alarming numbers and continue to rise: 72,000 pending foreclosure actions with over 112,000 homes in preforeclosure status.
