Very few people buy a home anticipating foreclosure. However, circumstances can create a situation where an otherwise-solvent family can suddenly struggle to pay bills, particularly where the home suffers from severe damage due to a natural disaster. Combine this with additional issues, including issues with building permits, and families in New York can experience foreclosure nightmares.
In April 2009, first-time homeowners purchased a home on Long Island Sound. In August 2011, they were forced to evacuate their home due to Tropical Storm Irene. After the storm, they returned to find that flooding had rendered the house uninhabitable.
The homeowners filed a flood insurance claim and sought approval from the village to begin repairs. In November 2011 they were able to begin the reconstruction. However, on Jan. 3, 2012, about halfway through the repairs, the building inspector claimed there was an error in the issued building permit and ordered that the work be stopped.
The homeowners, who now rent a 600-square-foot, one-bedroom apartment with their 1-year-old child, have filed a federal lawsuit against the village, citing “selective enforcement” of local building codes. They are unable to pay the mortgage on their home, and an attempted short sale failed. Consequently, the house is now in foreclosure, and a possible bankruptcy is on the horizon.
They were informed by the village, whose administration of flood insurance plans was reportedly being scrutinized, that local building codes required the house to be elevated. Unfortunately, the couple had previously taken out loans to pay the contractors. They are already facing financial challenges and are unable to afford the cost of elevating the house to meet the requirements.
It is impossible for homeowners to plan for every eventuality, and filing for bankruptcy may be the only option for this couple. However, others ways of dealing with a home foreclosure may be available to those who are aware of the options or who seek proper consultation.
Source: Lohud.com, “Couple say Mamaroneck used ‘selective enforcement’ to halt Irene renovation,” Swapna Venugopal Ramaswamy, Jan. 7, 2013