Archives for October 2013

JP Morgan $13 Billion Settlement for Bad Mortgage Practices

mortgage modification attorneysFor months now, JP Morgan Chase and the Justice Department have been in negotiations with regard to a settlement resolving federal allegations concerning the bank’s sale of faulty mortgage securities. The Justice Department’s position is the sale of these faulty mortgage securities was a major factor in the mortgage/real estate crisis in America. The $13 Billion penalty would be the largest penalty ever paid by a single institution. The Justice Department has been investigating JP Morgan Chase for many months with regard to its activities concerning mortgage backed securities. In the event this settlement is entered into, it would be a major win for the Justice Department. JP Morgan Chase is the largest bank in the country. This settlement will not stop the federal government from bringing criminal charges against JP Morgan Chase. However, the deal would end a New York State lawsuit brought by Attorney General Eric T. Schneiderman and an investigation in the State of California.

HSBC and Barclay’s Bank Fined Also

Attorney General Holder has in the past levied multimillion dollar fines against other large financial institutions which includes both HSBC and Barclay’s Bank.

JP Morgan seeks to resolve this investigation regarding its conduct in recent years. As a result of this investigation, the bank’s first quarter report showed a loss. This was the first quarterly loss for JP Morgan Chase in ten years. The bank’s Chief Executive Officer, Jamie Dimon, seeks to resolve these investigations into the bank’s conduct. With this in mind, he is taking a conciliatory approach in his dealings with regulators. He has stated that the problems JP Morgan is facing are “painful.”

In 2011, JP Morgan Chase was one of the eighteen banks sued by the Federal Housing Finance Agency. That suit was to recoup losses sustained by Fannie Mae and Freddie Mac with regard to bundled securities that were improperly underwritten as home loans.

assisting homeownersElliot Schlissel is a foreclosure defense lawyer. Elliot and his associates litigate foreclosure lawsuits and they help their clients obtain mortgage modifications. Elliot and his aggressive associates work hard to keep their clients living in their homes.

Appearance at a Foreclosure Settlement Conference Considered an “Informal Appearance” and not a Default by the Mortgagor

foreclosure defense lawyerIn a case of first impression, Justice Jack Battaglia sitting in Supreme Court Real Property Part in Kings County, New York, dealt with an issue as to whether the appearance by the mortgagor at the mandated Foreclosure Court Conference part in Kings County without submitting a formal written answer to the summons and complaint can be considered an informal appearance denying the financial institution the ability to claim the homeowner was in default.

In this case, the financial institution brought a summary judgment application to the Court. A summary judgment motion claims there are no issues of fact and therefore no trial is necessary. The basis for the summary judgment was the default by the mortgagor, Butler, in this proceeding. There were two prior applications by the financial institution but questions concerning the affidavit of service caused them to be denied. The Judge had the case sent over to the Foreclosure Settlement Conference Part for mandatory foreclosure settlement proceedings.

Mr. Butler made numerous appearances at the Foreclosure Conference Part. The judge questioned whether since Butler appeared in the action in the Foreclosure Conference Part, how could she be “in default” for purposes of entering a judgment on default. The Court took the position, under New York case law, what Butler made was called an “informal appearance” within the time specified in the Summons and Complaint.
This is covered by New York Civil Practice and Rules § 320(a). The judge therefore entered a decision that Butler was not in default. A motion to enter judgement based on default could not be granted since Butler was not in default. Butler had participated in court conferences pursuant to this informal appearance. It should be noted, Butler appeared twenty-five times in the Foreclosure Conference Settlement Part and several other times before the court. The financial institution’s application for a default judgment was denied.

homeowner advocatesElliot S. Schlissel is a foreclosure defense attorney representing homeowners throughout the metropolitan New York area. Elliot and his staff of attorneys have been keeping homeowners in their homes for more than 45 years.

New Law Helps Homeowners: Part II

foreclosure defense attorneysStanding to Sue

There is a key concept in New York law concerning standing to sue. If Bank 1 gives a loan to a homeowner and Bank 1 transfers or surrenders the mortgage to Bank 2, the homeowner is entitled to notice of the transfer. In addition, appropriate documents called an Assignment of Mortgage must be filed with the County Clerk’s office in the County in which the real estate is maintained. This applies to each and every subsequent transfer of the mortgage from one financial institution to another.

The failure to properly file all necessary documents or notify the homeowner disallows the financial institution at the end of the line from having standing to bring the lawsuit. In these cases, if the homeowner hires a foreclosure defense lawyer knowledgeable about these details, an affirmative defense of lack of standing can be placed in the answer to plaintiff’s complaint. This defense can be the basis for the dismissal of the lawsuit. My law firm has had numerous lawsuits dismissed because of lack of standing issues in the many foreclosure cases we have handled.

One of the additional purposes of this legislation is to clarify issues concerning who is entitled to sue a homeowner and how cases should proceed in a more orderly and logical manner, starting with the Foreclosure Court Conferences and thereafter with litigation.

Certificate of Merit

One of the purposes of this new statute is to eliminate the filing of misleading or fraudulent documents in foreclosure proceedings that has commonly been referred to as “robo-signing.” Chief Justice Jonathan Lipman of the New York State Court of Appeals, stated “the bill is crucial to ensuring the integrity and transparency of the foreclosure process especially for those New Yorkers impacted by the recent economic crisis.”

Certificate of Merit must be filed at the same time the foreclosure proceeding is initially commenced. The Certificate of Merit requires the attorney to attach to the Certificate any relevant documents concerning modifications, extensions, consolidations and assignments affecting the instrument and/or this indebtedness.

Missing Documents

In cases where the documents are missing or lost the statute allows the attorney or the representative of the plaintiff’s financial institution to file an appropriate affidavit which attests to all of the facts and veracity of those documents which are missing.

The Certificate of Merit specifically pertains to foreclosure lawsuits brought against owner occupied residences. This replaces the affidavits attorneys had been required to file under court administrative rules since 2010.

Legal Limbo

In the past, lenders have brought foreclosure lawsuits without the proper documentation that they were entitled to bring these lawsuits. This caused cases to be maintained on the court’s dockets for long periods of time tying up the legal system involved with foreclosures.

Christine Keef, a senior staff attorney with the Empire Justice Center, stated with reference to the new law “this is going to prevent homeowners from being stuck in this legal limbo in a time period when fees and costs continue to accrue on a loan, making it harder for the homeowner to afford a modification when one is offered.”

foreclosure advocate for homeownersElliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the metropolitan New York area.

New Law Helps Homeowners: Part I

foreclosure defense attorneysThe New York State legislature has passed a new statute which has an effective date of August 30, 2013. The statute impacts in the manner and procedures utilized by financial institutions and their attorneys commencing foreclosure proceedings within the State of New York.

Certificate of Merit

All foreclosure actions commenced after August 30, 2013, will require a Certificate of Merit. This document must be attached to the Summons and Complaint. The Certificate of Merit requires the attorney for the plaintiff to certify he or she has reviewed all of the facts in the case. In addition, the attorney will have to certify based on consultation with representatives of the plaintiff, (financial institution) who is identified in the certificate, that the attorney has taken the time to review pertinent facts and documents related to this proceeding. The attorney will have to review the mortgage, the security agreement, the note or the bond underlying the mortgage. Only after this review, if there is a reasonable basis for the starting of a foreclosure lawsuit, can the attorney at that point bring a proceeding to foreclose.

Note and Mortgage

This new statute will require the attorney for the plaintiff to attach a copy of the note and the mortgage to the Summons and Complaint. In addition, the attorney will have to attach all documents evidencing transfers leading from the original financial institution to the current plaintiff showing all documents have been appropriately filed and the party bringing this lawsuit has standing to sue the homeowner.

In the event the attorney and/or the financial institution does not completely comply with these new requirements the judge handling the case will have full authority to dismiss the foreclosure proceeding. In addition, the judge will have authority to deny all accrued interest and other financial expenses that increase the amount of the indebtedness owed by the debtor during the entire long foreclosure process.assistance for homeowners

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