Archives for January 2013

Fraudulent Practices in Foreclosure Proceedings

foreclosure assistance for homeownersNewspapers and television news shows have made numerous presentations concerning many financial institutions in the United States being involved in fraudulent practices in originating loans. Lawsuits involving fraudulent practices can be brought against the original lender as well as subsequent lenders who received the notes and mortgage pursuant to assignments.

Fighting Foreclosure Lawsuits

A consumer who seeks to fight a foreclosure proceeding must present evidence he or she was taken advantage of due to predatory lending practices or the loan was issued after the Home Equity Theft Prevention Act (HETPA), as codified in Chapter 308 of the Laws of 2006 in the State of New York. HETPA creates presumptions of predatory lending in certain circumstances.

The case of Immigrant Mortgage vs. Fitzpatrick 95 A.D. 3D 1169, 945 NYS 2D 697 (2 Dept 2012) held a consumer is responsible for the contents of the information he or she provided in the loan application and at the time of the closing of the sale of the house. The court in this case held “[Immigrant Mortgage’s] evidence [presented against Fitzpatrick] established Fitzpatrick was presented with clearly written documents describing the terms of the subject loan and alerting her to the fact the plaintiff would not independently verify her income. Such evidence establishes prima facie entitlement to judgment as a matter of law dismissing an affirmative defense regarding fraudulent practices. In opposition, Fitzpatrick failed to proffer any evidence sufficient to raise triable issue of fact as to whether the plaintiff made any materially misleading statements or committed any misconduct with respect to the subject loan.”

Counterclaims in Foreclosure Proceedings

When a homeowner is sued in foreclosure, they may counter-sue the financial institution even if there is a waiver of defenses or counterclaims in the mortgage documents if the counterclaim is based on fraud.helping homeowners stay in their homes

A Foreclosure Proceeding In the Surrogate’s Court

foreclosure defense attorneyLet’s say your father, mother, a friend or relative leaves you their home either through a will or in an intestate proceeding (without a will). However, due to circumstances beyond your control, the mortgage payments were either not paid by the decedent in a timely manner or go unpaid during the pendency of the estate matter. Can the Surrogate’s Court intervene in a foreclosure proceeding?

In the case of In re Johanneson, NYLJ, September 4th, 2012 on page 26 (Surrogate’s Court, Richmond County), the issue of jurisdiction by the Surrogate’s Court in a foreclosure proceeding was dealt with. In this case, the administratrix of a decedent’s estate brought an application to transfer a pending foreclosure proceeding from a Supreme Court part to the Surrogate’s Court.

The attorneys for the financial institution opposed the transfer of the case to the Surrogate’s Court. They took the position the Surrogate’s Court did not have the appropriate subject matter jurisdiction.

The Surrogate’s Court in this case took the position pursuant to the New York State Constitution and the Surrogate’s Court Procedure Act they did have the appropriate subject matter jurisdiction to handle with a foreclosure proceeding which impacted on the decedent’s estate.

Unfortunately, even though the court claimed they had jurisdiction they declined to exercise their jurisdiction. The Surrogate’s Court felt the Supreme Court which handles foreclosure proceedings on a regular basis, would be better able to deal with the issues which might arise in the context of a routine foreclosure proceeding.

About the Author

assisting homeownersElliot S. Schlissel, Esq. is the former President of the Commercial Lawyers Conference of New York. For more than two decades he has been helping families fight foreclosure proceedings, deal with fraudulent mortgages and stop families from losing their homes.

Standing Required to Sue in Foreclosure Cases

foreclosure defense attorneys on long islandService providers of mortgages who do not know the location of the promissory note lack standing to bring foreclosure lawsuits in the State of New York. In any case where the servicing organization is different than the originator of the note, the servicing organization may not have standing to bring a foreclosure action in the State of New York. The reasons for this relate to the fact the homeowner does not know if the note and the mortgage were properly assigned by the originating financial institution.

Chain of Assignment

Let’s say Bank #1 is the originator of the mortgage loan on your house. Sometime after the closing, you are advised to pay your mortgage payments to Bank #2 and on a later date you are notified to pay your mortgage payments to a mortgage servicing organizations #3. In each of those transactions, a proper assignment would have to have taken place with regard to the note and mortgage. If the assignment did not take place and Banks #3 brings a foreclosure action against you for nonpayment of your mortgage, they do not have standing to bring this proceeding. You can interpose a defense to the proceeding that the party bringing the proceeding is an incorrect party and move to have the case dismissed.

Lack of Standing Can Not Be Repaired

If the institution bringing the foreclosure lawsuit against your home did not have standing to sue when the lawsuit was initiated, they cannot correct this error after the lawsuit is started. In the event the financial institution did not have an appropriate assignment of the note at the start of the foreclosure proceeding and later obtains a valid assignment of the note, this does not correct the lack of standing at the time of the initiation of a lawsuit.

Foreclosures and Estates

If a homeowner dies, the financial institution bringing a foreclosure cannot sue the dead homeowner. If no estate exists, the financial institution must take action to create an estate for the deceased mortgage holder before they can bring a foreclosure proceeding.homeowner advocates on long island

Homeowner Associations in Florida Are Foreclosing on Financial Institutions

foreclosures on long islandPayback Time in Florida

The State of Florida has one of the highest foreclosure rates in the country. It is estimated, approximately half a million homes have been sold by banks and other financial institutions in foreclosure proceedings.

Today, many homeowner associations and condo associations are bringing foreclosure proceedings against banks. These proceedings relate to banks failure to pay homeowner associations’ dues, real estate taxes and other expenses related to properties which have been repossessed by the financial institutions. When a financial institution takes title to a home in a foreclosure proceeding, they become responsible for taxes, homeowners association fees and all unpaid expenses related to the house for past years. So what are banks doing concerning the payments of these fees? They are ignoring them!

Homeowners Liening on Bank Owned Properties

Homeowner Associations are fighting back against banks in Florida. They are putting liens on the properties taken by the banks in foreclosure proceedings. Ben Solomon, a Miami based attorney, has filed more than 8000 liens on behalf of homeowners against properties owned by financial institutions. He has also brought more than 100 foreclosure cases against financial institutions.

Shortfall in the Finances of Condo Associations

Due to the high foreclosure rates in Florida, many condo associations are having financial difficulties. When people stop paying their mortgages, they also stop paying their condo association fees. This has a negative impact on all the other homeowners in the condo association. The reduced cash flow by the condo association has forced them to cut back on maintenance of their properties, security, beautification programs and other essential services that are necessary to maintain the lifestyle of the members of the condo association.

Most Banks Settle

Attorneys who have brought foreclosure proceedings against properties owned by financial institutions report when pressed, the financial institutions pay the back taxes, condo association fees and other expenses on the real estate.

Conclusion

When banks don’t pay their bills, go after them! Their pockets are deep and they usually come up with the cash!foreclosure advocate for homeowners

Mortgage Forgiveness Debt Relief Act of 2007 and the Fiscal Cliff – Part II

foreclosure assistance for long island homeowners600,000 Foreclosures a Year

Approximately 600,000 homes are foreclosed upon in the United States each year. In addition, there are tens of thousands of short sales taking place each and every year. It is also estimated, under the terms of the $25 billion foreclosure abuse settlement, approximately one million homeowners will have the principal amount of their mortgages reduced within the next few years. This means that there are virtually millions of Americans who will suffer increased income taxes related to losing their homes if the Mortgage Forgiveness Debt Relief Act of 2007 isn’t extended by Congress as part of some settlement concerning the fiscal cliff issues.

The Fiscal Cliff and the Real Estate Market

Most pundits point to a slow recovery in the residential housing market in the United States. However, fiscal cliff issues will have a negative impact on the housing market. The fiscal cliff and the housing crisis in the United States are major issues that must be considered by Congress and the President when resolving financial and tax issues.

Filing Bankruptcy

Let’s assume that the Mortgage Debt Forgiveness Act expires. Is there a way of avoiding income tax in the event of a short sale or foreclosure? The answer to this question is yes. If the individual files a Chapter 7 bankruptcy. If the debt is discharged in bankruptcy there will be no taxes due on the debt. Who can file for this type of bankruptcy? Individuals with debts that are greater than their assets or have negative cash flow.assistance for homeowners

Mortgage Forgiveness Debt Relief Act of 2007 and the Fiscal Cliff – Part I

foreclosure defense for homeownersThe 2007, Mortgage Forgiveness Debt Relief Act exempted homeowners from paying income taxes on any portion of their mortgage that is either forgiven in foreclosure, eliminated it in a short sale or reduced in a principal reduction agreement entered into between homeowners and the financial institution. This has been a tax break that has saved homeowners tens of thousands of dollars in Federal Income taxes. Most homeowners are unaware that any reduction in the amount of their mortgage would be considered income to them and taxable by the Internal Revenue Service.

Example

Let’s assume that you purchased a home for $350,000. Unfortunately, it goes into foreclosure. Let’s assume you took out a $300,000 mortgage on your home and at the time of the foreclosure sale, you owed $250,000. At the sale, the home sells for $100,000. Therefore, there would be $150,000 of your mortgage that would not be paid. Under the present law, the Mortgage Forgiveness Debt Relief Act of 2007, your financial obligations to pay income taxes on this $150,000 are eliminated. Once this statute expires, you would have to pay income taxes on the $150,000. Now let’s assume for purposes of this discussion your income tax rate was 30%. This would cause you to pay $45,000 in income taxes as a result of your home being sold in foreclosure. This would be a shock to most homeowners!helping homeowners stay in their homes

Why You Can’t Buy A House

foreclosure defense for Long Island homeownersHome prices have fallen. Homes have become more affordable to purchase. Interest rates are at record lows. It is an excellent time to buy a home. Do you want to purchase a home? There are reasons why you may not be able to. Here are some of those reasons:

1. Your debt to income ratio is at or above 40%. Debt to income ratio (DTI) is the amount of your monthly expenses to maintain where you live plus other recurring monthly debt divided by your total monthly income. Most mortgage loan programs require your DTI be at or below 40%. Here is how you determine whether a house you are looking at is affordable. First calculate your DTI. Then calculate your proposed mortgage payments and add your minimum monthly debt obligations. Then divide this by the total amount of your gross monthly income. To calculate your maximum mortgage payment multiply gross monthly income times 0.40 (DTI) minus all minimum monthly debt obligations.

2. You work for yourself and the schedule C of your income tax return shows losses. Many individuals who are self-employed owned companies that showed tax losses at the end of the year. These income tax returns have a schedule C. If the schedule C does not show a profit, financial institutions will be hesitant to loan you money.

3. You have significant deposits at a bank but you can’t document where this money came from. In other words, one way or another you’re making cash and there is no paper trail for it. Banks do not like this!

4. The down payment on your home is a gift. If the down payment on your home is a gift from a parent, friend, relative or other individual it will be necessary for you to document this gift on an affidavit from the person who gave it to you. Banks are very skittish about gifts from anonymous individuals!

5. The home has termites. If the home has termites or other pests, it is necessary that this condition is dealt with and all structural damage to the home rectified before a financial institution will loan you money on the home.

6. You seek to purchase a home you simply can’t afford. When buying a home you should have realistic expectations. If you are making $50,000 a year, you can’t afford a home that costs $400,000 or $500,000. Buyers often go to real estate brokers who show them homes they fall in love with but they can’t afford to purchase. If you are a prospective home purchaser, you must to do an analysis of what you can afford and make compromises on what you really want and what is within your budget.

About The Author

assisting homeownersElliot S Schlissel, Esq. is an attorney with more than 45 years of legal experience. His law office represents clients regarding foreclosures defense issues, defective mortgages, foreclosure actions and all types of predatory lending issues.

Celebrities Whose Homes Were Foreclosed

foreclosure attorneysCelebrities are among the four million Americans whose homes have been foreclosed on in the past five years. Being a celebrity allows you to accumulate large sums of money. However, being a celebrity doesn’t mean you have enough money to pay your bills. The following is a list of celebrities whose homes have been foreclosed on:

Chris Tucker

Chris Tucker is a comedian. He owned a property called Bella Collina in Lake County, Florida. SunTrust bank, in October of 2012, brought a foreclosure proceeding against Mr. Tucker. In this proceeding, the bank alleged that he owed $4.5 million. Mr. Tucker bought the house when the real estate market in Florida was still high. In the end, he was able to sell the house in a short sale. It has also been reported that Mr. Tucker is indebted to the IRS for $11.5 million related to back taxes.

Rhianna

Rhianna is a singer. She owns a home located at Janus Place in Beverly Hills, California. Her home is approximately 8500 square feet. She purchased the home for approximately 7 million dollars in 2009. Shortly after purchasing the house, there was a flood which caused “extensive damage” to the home. It had been listed for sale for $4.5 million. Rhianna has defaulted on making the payments on her mortgage. She has requested the home be sold in a short sale.

Burt Reynolds

Burt Reynolds owned a home in Hobe Sound, Florida. He was more than two years behind on his home payments. It is estimated that his mortgage payments were over a million dollars behind. He seeks to sell the home in a short sale for approximately five million dollars. It is estimated that he paid over $15 million for the house when the real estate market in Florida was much stronger. The house is a waterfront piece of property and has approximately 13,000 square feet of living space. In addition, he has a helipad and a docking area for his yacht.

About The Author

homeowner advocates on long islandElliot S. Schlissel, Esq. is an attorney with more than two decades of experience representing individuals whose homes have been foreclosed. He litigates cases involving mortgage fraud, robo-signers and fraudulent foreclosures.

Mortgage Relief From Foreclosure Abuses

Mortgage Relief From Foreclosure AbusesIn 2012, 309,000 Americans received mortgage for relief from their financial institution. As part of the landmark settlement over foreclosure abuses, $6.3 million was cut from homeowners’ mortgages in 2012. Each homeowner, who will receive mortgage relief, received approximately $85,000 in reductions in the amount they showed. Homeowners in New York State received approximately $625 million dollars in funds for mortgage relief. Over 7,000 New York homeowners benefited from these mortgage reduction packages.

The mortgage relief packages were part of a settlement of a lawsuit brought by the United States government and the Attorneys General in 49 states. The total settlement package was over $25 billion. The banks involved in the settlement were Ally Financial Inc., Bank of America Corp., JP Morgan Chase & Company, Citibank and Wells Fargo & Company. The lawsuits brought by the Federal government and the state Attorneys General dealt with problems caused by many financial institutions bringing foreclosure proceedings without properly investigating as to whether they had the appropriate documents to verify they were owed the money from the homeowners.

Unfortunately, there are an additional 11 million Americans who owe money to the financial institutions in amounts more than their homes are worth. All of these Americans have homes that are under water. There are 11 million homeowners also in need of help with their mortgages!

About The Author

foreclosure advocate for homeownersElliot S. Schlissel, Esq. is an attorney with more than 45 years of experience. He is a former president of the Commercial Lawyers Conference of New York, a regional bar association. He has been representing individuals regarding foreclosure defense, mortgage modifications and fraudulent mortgages for more than two decades.

Mortgage Relief

foreclosure defense on Long IslandIn 2012, 309,000 Americans received mortgage relief from their financial institution. As part of the landmark settlement over foreclosure abuses, $6.3 million was cut from homeowners’ mortgages in 2012. Each homeowner, who received mortgage relief, received approximately $85,000 in reductions in the amount they showed. Homeowners in New York State received approximately $625 million dollars in funds for mortgage relief. Over 7,000 New York homeowners benefited from these mortgage reduction packages.

The mortgage relief packages were part of the settlement of a lawsuit brought by the United States government and the Attorneys General in 49 states. The total settlement package was over $25 billion. The banks involved in the settlement were Ally Financial Inc., Bank of America Corp, JPMorgan Chase & Company, Citibank and Wells Fargo & Company. The lawsuits, brought by the Federal government and the state Attorneys General, dealt with problems caused by many financial institutions bringing foreclosure proceedings without properly investigating as to whether they had the appropriate documents to verify they were owed the money from the homeowners.

Unfortunately, there are an additional 11 million Americans who owe money to the financial institutions in amounts more than their homes are worth. All of these Americans have homes that are under water. There are 11 million homeowners also in need of help with their mortgages!

About The Author

helping homeowners stay in their homesElliot S. Schlissel, Esq. is an attorney with more than 45 years of experience. He is a former president of the Commercial Lawyers Conference of New York, a regional bar association. He has been representing individuals regarding foreclosure defense, mortgage modifications and fraudulent mortgages for more than two decades.

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