Archives for December 2012

Foreclosures In New York

foreclosure defense lawyerCurrently, there are approximately 80,000 foreclosure matters pending in New York State. In October 2012, one out of every 2,223 homes in the State of New York was in foreclosure according to Realtytrac. In the metropolitan New York area, there are tens of thousands of homes in foreclosure.

Foreclosed Homes Impact On Other Homeowners

When a home in a community goes into foreclosure, it has a negative impact on the other homes in the area. The property values of the homes in its vicinity are reduced. The foreclosed homes are taken into consideration by appraisers when determining the valuation of homes by looking at comparable properties in the locality. Homes sold in foreclosure are sold at lower values than homes sold in a traditional real estate transaction. The reduced sales prices of foreclosed homes has a negative impact on all the other homes in the area.

Banks Are Unwilling To Lend

The more homes in a given area that go into foreclosure, the more squeamish banks become with regard to making loans for the purchase of other homes in the area.

Foreclosures On Long Island, New York

There has been an uptick in the number of homes going into foreclosure in Nassau and Suffolk Counties in Long Island. As a result of the high volume of foreclosures, a foreclosure proceedings are taking the courts longer and longer to process. Foreclosures in New York are handled in the Supreme Court of the county in which the house is located. It currently takes about two years for a foreclosure to go from start to finish on Long Island.

New Requirements In Foreclosures

In all foreclosure actions, the courts now require a foreclosure court conference be held. At this conference, the attorney for the bank and the homeowner meet to discuss options with the court. This occurs in each and every residential foreclosure brought in New York. This must be completed to the Court’s satisfaction before the case can move forward.

Robo-Signers

Since 2010, the courts in New York are requiring the attorneys for the lending institutions to submit written verification of the accuracy of old documents filed with the courts. The purpose of this rule was to deal with the issues concerning “robo-signing” by individuals working for financial institutions.

Dealing With Foreclosure

The best way to deal with foreclosure is to hire an experienced foreclosure defense lawyer to provide you with an explanation of your options and of the appropriate legal action to take to protect your legal rights.homeowner advocates on long island

Home Prices Slowly Recover

foreclosure defense for homeownersCurrently, the housing market in the United States is in a recovery stage. However, this recovery is uneven and moving very slowly. The big issue Americans are facing, concerning the recovery of the housing market, is the “fiscal cliff”. If the Democrats and Republicans in Congress cannot reach a resolution that President Obama is satisfied with, there will be huge increases in taxes for the large majority of Americans. These tax increases will have a negative impact on the housing market and the slow moving recovery in real estate prices will be derailed. In addition, the country will most likely end up in another recession.

Fiscal Cliff

One aspect of the “fiscal cliff” is allowing the capital gains tax rate to go back up again from 15% to 20%. The second issue affecting the real estate market is the potential that Congress will put a cap on the Mortgage Interest Tax Deduction. The Mortgage Interest Tax Deduction has been, for many years, has been a tax break that encourages home ownership. If the Mortgage Interest Tax Deduction is capped, this will have a negative impact on purchases of higher end homes.

The Mortgage Debt Forgiveness Act of 2007 allows homeowners whose homes go into foreclosure, are subject to short sale or principal reduction from having to pay income taxes on the amount of debt that is forgiven. This also expires January 1, 2013, and is part of the “fiscal cliff” issue.

If the “fiscal cliff” is averted, it is expected that between June 1, 2013, and June 1, 2014, home prices will increase at a rate of approximately 3 1/2%.foreclosure advocate for homeowners

Foreclosure Rates Climb On Long Island

foreclosure defense for homeownersForeclosure filings rose by almost 20% in Nassau County in July of 2012. This took place even though foreclosure rates fell in this same month by 43% as compared with July of 2011.

Financial institutions were busy in Nassau County in July. They filed to 469 foreclosure cases. Many of the new foreclosure cases filed in Nassau County involved homes that are recent defaults in mortgage payments. During this same time, there were only 216 filings for foreclosure proceedings in Suffolk County.

Barry Smolowitz, the founder of the Suffolk County Pro Bono Foreclosure Settlement Project, recently stated Suffolk County has “a more decentralized” way of processing foreclosure court cases than Nassau. There are a larger number of judges hearing cases in Suffolk County then there are in Nassau. This has had an impact on the administrative process involving foreclosure cases in Suffolk County.”

David Schwartzberg, the foreclosure counsel to the Huntington based Advantage Title, recently stated the foreclosure process is “much more onerous” for banks than it used to be because there are much stricter Federal and State oversight and then there has been in the past.

Early in 2012, the nation’s five largest mortgage lenders reached a $25 billion dollar settlement with both Federal and State agencies dealing with alleged foreclosure improprieties.

Fewer Foreclosed Homes Being Listed For Sale

Real Estate brokers who handle the sales of foreclosed homes have indicated there are fewer foreclosed homes being listed for sale on the market in Long Island. John Fitzgerald, the President of Realty Connect USA, located in Suffolk County stated “we’ve seen a lot less foreclosed homes enter the marketplace then they have in the past.”assistance for homeowners facing bankruptcy

Foreclosure Crisis On Long Island Continues

In the spring of 2012, more mortgages on Long Island were “underwater” than in the spring of 2011. In Nassau and Suffolk counties, 48,546 homeowners owed more on their mortgage then their homes were worth. This amounted to 9% of all the homeowners on Long Island. This number is up 8.4% from of the prior year.

Troubled Homeowners

Peter Elkowitz, the president and chief executive of the non-profit Long Island Housing partnership, stated “we see a lot of people coming in [to the Long Island Housing Authority] whose mortgages are definitely underwater, who need assistance.”  Although the percentage of homes under water is increasing, it is still less than the national average. In the United States, approximately, 10.8 million homeowners find their mortgages to be under water. This represents 22.3% of all homeowners that have mortgages.

Will Homeowners Recover?

If you own a single family home, and its value has decreased by 50 to 70% from the top of the market, it is unlikely the value of your home will recover in the near future to the point where the mortgage is no longer under water.

Employment And The National Economy

The solution to declining real estate values relates to the overall picture of the American economy. When the economy picks up, the allure of owning a single family home will increase again. This will cause home values to increase and the over supply of homes on the market will decrease. Until this happens, most homeowners on Long Island will find their most valuable asset not to be the investment they dreamed it was.

About The Author

Elliot S. Schlissel, Esq. is an attorney with more than 45 years of legal experience representing individuals and families concerning mortgage issues, real estate issues and foreclosure defense matters.

Sentiment Rises Among Companies Building Homes

Home Builders Have A Positive Outlook For The Future

In August, 2012, home builders, in the United States, had a more positive outlook than at any time during the past five years. The National Association of Home Builders has taken the position the housing industry is turning a corner. Although sentiment among homebuilders is higher than it has been for a long time, the overall market conditions in the building of new single family homes is still poor.

Barry Rutenberg, from the National Association of Home builders/Wells Fargo Housing Market Index, stated “while there is still much room for improvement, we have come a long way from the depths of the recession and the outlook appears to be brightening.” Home builders expect sales of single family homes to increase for the next six months.

New Home Sales Are Higher

Sales of new homes are being made at a higher rate in 2012 than they were in 2011. It should be noted 2011 home sales were at the lowest level in half a century. Mortgage rates also are still near record lows. This has been a motivating factor for prospective purchasers with the ability to obtain low cost mortgages. Can the optimism among home builders be indicative the economy in the United States is recovering? This is still questionable. For the economy to recover, the employment rate must be higher than the 8.1% rate that exists today.

It should also be pointed out the economy in Europe is also weak and this will impact on the economy in the United States.

Has The Housing Market Bottomed Out?

In recent weeks there have been numerous articles discussing the bottoming out of the housing market. Recently, a real estate monitoring company’s chief economist issued a statement claiming the decrease in values for single family homes in the United States had bottomed out. And the economist stated “the housing recovery is holding together despite lower than expected job growth due to organic strength of its own.”

New Home Sales And Unemployment

Each time a new home is built in the United States, it has the impact of creating three jobs and generating $90,000 of new tax revenue. This has an overall affirmative impact on the local economy.

Court Denies Interest from Default Data Due to Bank’s Failure to Negotiate in Good Faith

On March 27, 2007, HSBC Bank brought a foreclosure proceeding on a mortgage on property located in Brooklyn. The mortgage on the property was given to “MORTGAGEIT.” The mortgage was an adjustable rate mortgage in the amount of $624,000. A note was also given to “MORTGAGEIT,” as lender.

The borrower on the note and the defendant on the case was named McKenna.  The note showed an undated endorsement on behalf of ” MORTGAGEIT” to HSBC. There was also an assignment of the mortgage on March 2, 2009. The assignment was from the Mortgage Electronic Registration System Incorporated designated the mortgagee as “the nominee for the lender and mortgagee of record” to HSBC.

HSBC had refused to agree to a short sale on the property which had been requested by McKenna. HSBC claimed that McKenna had never been a resident of the property subject to the foreclosure. Therefore, HSBC had no obligation to negotiate with him in good faith.

The court found that HSBC failed to negotiate in good faith. The court ruled that they could not recover the interest on the note and the mortgage from the date of the McKenna’s alleged default.

Conclusion

This court penalized the lender for refusing to act in good faith.  The courts in New York are becoming more aggressive in taking action against lenders who fail to act in good faith.

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