Archives for March 2014

Foreclosure Proceeding Dismissed: Bank Had No Standing

A foreclosure lawsuit was brought by Deutsche Bank in Kings County, New York, Supreme Court. The Judge in the Part was Larry Martin. During the course of the proceeding, Deutsche Bank brought a motion for summary judgment and the defendant, Johnson, cross moved for summary judgment and dismissal of the complaint. Summary judgment motions basically state there are no issues of fact that need to be litigated. With regard to a summary judgment motion, a party has to establish that there are no facts in controversy concerning the position that party takes. Here, each side was seeking a win based on the idea the other party was completely wrong. Deutsche Bank argued, in their application to the court, Johnson had not made payments under the note. Johnson, in his motion, challenged the debt. He also claimed that Deutsche Bank was not the owner of the note. Johnson had requested the original note, the mortgage and a mortgage modification that she had allegedly entered into, be produced. Johnson claimed that Deutsche Bank had failed to properly assign these mortgages.

No Evidence of a Written Assignment of the Mortgage

Judge Larry Martin, in his decision, held evidence was not produced of a written assignment of the note from Deutsche Bank to OCWEN. Judge Martin held Deutsche Bank had to prove the note was physically delivered to it before November 3, 2011, the day the action was commenced. The attorneys for Deutsche Bank said that they had the original note and mortgage. However, the law firm did not provide documentation as to the time they came into possession of the note and mortgage.

Judge Martin, in his decision, held the only evidence Deutsche Bank submitted with regard to their standing to bring this lawsuit was inconclusive. The fact that they had failed to submit a written assignment of the note or documentation to establish the physical delivery of the note caused their claim to fail. Johnson’s motion to dismiss the lawsuit was granted.homeowner advocates

Judge Sanctions Bank for Foreclosure Activities: The Appellate Division Reverses the Sanctions

foreclosure defense lawyersJohn Lucido, who had been a mortgage broker, had taken out a mortgage loan, in March of 2007, of approximately $500,000 with regard to his Rocky Point, Long Island New York home. He was unable to make his mortgage payments and in 2009, Bank of America brought a foreclosure lawsuit in Suffolk County, New York.

Foreclosure Court Conferences

There were numerous foreclosure mediation conferences. However, Lucido had been ill and his wife had died during the course of the litigation. This complicated the issues that were dealt with at the foreclosure conferences. At the time of the foreclosure mediation conferences, Lucido represented himself. The conferences were held pursuant to New York Civil Practice Law and Rules Section 3408, which states “both the plaintiff and the defendant shall negotiate in good faith to reach a mutually agreeable resolution with regard to residential foreclosure lawsuits.”

Judge Spinner’s Ruling

The case was heard before Judge Spinner sitting in a Foreclosure Court Part in Suffolk County. Judge Spinner, in April 2012, ruled Bank of America had “deliberately acted in bad faith.” He had made this ruling because they had delayed six months in producing a pooling and servicing agreement. Judge Spinner also stated Bank of America gave “material misstatements of fact” which had been calculated to deceive the court and also cause delay of the court proceedings. Judge Spinner went on and held the bank had misinformed the court that the pooling and servicing agreement which controlled Mr. Lucido’s mortgage specifically forbade principal reductions. Later the bank acknowledged there was no bar to principal reductions in the pooling and servicing agreement.

Judge Spinner in his decision forever restrained Bank of America from “demanding, collecting or attempting to collect, directly or indirectly” sums related to the $493,209 mortgage that were either “interest, attorneys’ fees, legal fees, costs and disbursements.” He had held the bank could only collect principal and any funds advanced by the bank related to property taxes or insurance on the property. In addition, Judge Spinner imposed $200,000 exemplary in damages against the bank. This cut the bank’s principal to $293,219.

The Appellate Division Overrules

The Appellate Division of the Second Department, an appeals court, overruled Judge Spinner’s decision in its entirety. The Appellate Division held he did not have the authority to impose that level of penalties against Bank of America. The Appellate Division held the bank’s conduct did not justify the sanctions imposed by Judge Spinner and sent the case back to Judge Spinner for further proceedings. The appellate court took into consideration Lucido’s “unfortunate situation.” However, they held the record on appeal “reveals the conduct of the plaintiff in this case was not so egregious as to merit the imposition of sanctions against it.” The fact Bank of America refused to give Lucido a principal reduction and they had delayed in producing documents did not, in and of itself, amount to a failure to act in good faith.

Conclusion

Judge Spinner’s remedy was unusual, but there have been other cases that have upheld the tolling of interest when banks do not negotiate in good faith. I believe Judge Spinner was looking to send a message to financial institutions to be more cooperative at the foreclosure mediation conferences. Unfortunately, the Appellate Division did not agree.foreclosure advocate for homeowners

No Right to A Mortgage Modification

foreclosure defense attorneyA foreclosure proceeding was brought in Suffolk County before Supreme Court Justice Jerry Garguilo. Rivera had executed the mortgage and the personal obligation and he had failed to make his mortgage payments in a timely manner. Rivera had applied to Aurora Loan Services for a mortgage modification. They had taken the position he did not qualify for a mortgage modification.

It Is Alleged The Mortgage Company Acted in Bad Faith

Rivera brought a proceeding before Judge Garguilo claiming that Aurora Loan Services had acted in bad faith because they failed to offer him a mortgage modification or any other agreement to allow him to keep his house from being foreclosed on. It was presented to the court that Rivera was in bad health and could not appear in court. Rivera had a son-in-law by the name of Saburro. He was a loan officer. He came to court and testified Rivera was in bad health and that is why he did not appear in court. Saburro also testified Aurora Loan Services had repeatedly offered Rivera trial mortgage modifications. And at the end of each mortgage modification they would pull the rug out from under Rivera and advise him the mortgage modification was not going to be made permanent.

Judge Holds No Bad Faith

Justice Garguilo found that there were no trial mortgage modifications made. Judge Garguilo took the position the foreclosing bank has no obligation to modify a mortgage. Aurora’s failure to offer Rivera a mortgage modification was not unconscionable and it did not amount to bad faith. Aurora simply had no legal obligation to give Rivera a mortgage modification. It was a totally discretionary decision on their part. Judge Garguilo went on to state in his decision “it was clear the case was not one where a lender wrongfully accepted large sums of money and then refused home retention relief.” The court therefore ruled Aurora Loan Services did not act in bad faith because they did not provide Rivera with a mortgage modification.

helping homeowners stay in their homesElliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the Metropolitan New York area whose homes have been foreclosed on by financial institutions.

Foreclosure Case Dismissed: Bank Does Not Obtain Personal Jurisdiction Over The Defendant

foreclosure defense attorneyJustice Frances Francois Rivera sitting in a Supreme Court Part in Kings County recently had a case involving JP Morgan Chase Bank and a Mr. Birica. JP Morgan Chase Bank had started a foreclosure lawsuit in Kings County. The lawsuit claimed that Mr. Birica was the owner of the property involved in the foreclosure. It further stated in the Summons and Complaint he was also the individual who executed the personal loan documents and mortgage documents with regard to the property. The attorneys for JP Morgan Chase took the position Mr. Birica had defaulted on his payments with regard to the mortgage.

Vacating the Default Judgment

Mr. Birica brought an application to vacate the default and he submitted a Notice of Appearance and Verified Answer to the Complaint in the foreclosure lawsuit brought by JP Morgan Chase. In addition, he brought an application to dismiss JP Morgan Chase’s Complaint based on the theory that Chase lacked legal standing to bring the lawsuit and they had failed to properly serve the Summons and Complaint in the foreclosure proceeding on her.

The attorneys for Birica submitted a motion to the court which claimed she did not receive a copy of the Summons and Complaint in a timely manner. She therefore was unable to answer it. She claimed she resided in Rye, New York and the Summons and Complaint was served to an address in Queens, New York. The attorneys for Chase presented documentation that their process server had served Birica at an address in Rego Park by delivering a copy of the Summons and Complaint to her daughter and by thereafter mailing a copy to the address in Rego Park.

Judge Francois Rivera in ruling on the applications made by the attorneys for Birica found JP Morgan Chase did not meet its burden of proof establishing the Summons and Complaint in the foreclosure proceeding were properly delivered or mailed to Ms. Birica’s dwelling. He therefore dismissed the foreclosure lawsuit.

Conclusion

Financial institutions are held to a very high standard with regard to obtaining personal jurisdiction of individuals in foreclosure lawsuits.

assisting homeownersElliot S. Schlissel is a foreclosure defense attorney with more than 45 years of legal experience. His office has helped scores of families in the Metropolitan New York area stay in their homes. Elliot has previously been the President of the Commercial Lawyers Conference of New York, a creditors Bar Association, and he has extensive experience in litigating foreclosure defense cases and helping his clients obtain mortgage modifications.

Foreclosure Fraud – Part II

foreclosure defense lawyersRent to Buy Scams

A common foreclosure scam involves individuals approaching a homeowner whose home is in foreclosure and offering to have them refinance the home at a much lower interest rate. Unfortunately, the way this scam works is the homeowner is presented with documents that involve the transfer of the deed from the homeowner to the alleged foreclosure counseling company. The homeowner eventually finds out that he or she does not own their home and is now renting their home from the alleged foreclosure counseling company. Eventually the counseling company brings an eviction proceeding to evict the homeowner from their home and they thereafter try to sell the property or bring another rent paying tenant into the property.

The rent to buy scams also sometimes involve the tricking of the homeowner into signing documents that are presented to be applications for a home loan. However these applications actually are documents utilized to transfer the title of the property. Homeowners should be especially wary of signing any type of blank forms. In this type of scam the scammer presents a blank form to the homeowner and says “don’t worry we will fill it out and work with the bank to obtain a lower interest loan.” When the form is eventually filled out it turns out to be a document transferring title to the house.

Hire Attorneys Experienced in Defending
Homeowners In Foreclosure Lawsuits

The best way to ensure you are not being scammed and that your rights are being protected is to hire an attorney with a significant background in real estate and foreclosure defense matters to represent you with regard to foreclosure related issues concerning your home. When you hire a qualified attorney, you should request that you receive copies of all documents and paperwork in your file to make sure that the attorney is doing all that is necessary to protect your rights and interests.

homeowner advocatesElliot Schlissel is an attorney with more than 45 years of experience representing clients in real estate related legal matters. Elliot and his team of attorneys have one of the busiest foreclosure defense law firms in the Metropolitan New York area. Elliot helps his clients stay in their homes, obtain mortgage modifications and take all other necessary actions to avoid losing their homes in foreclosure.

Beware of Mortgage/Foreclosure Fraud – Part I

foreclosure defense attorneysThe number of homes going into foreclosure on a national basis has been decreasing. However, the number of homes in the Metropolitan New York area that have been placed into foreclosure by financial institutions has not been going down during the past few months.

Homeowners who find themselves with financial difficulties can be vulnerable to fraudulent mortgage and foreclosure schemes. In California, a woman by the name of Jewel Hinkles swindled approximately 1300 homeowners out of $5,000,000 through a group of companies which she claimed were in the business of buying distressed properties from the homeowners. This is one of many examples of fraudulent foreclosure/mortgage schemes that have been perpetrated on individuals finding themselves in financial difficulty and unable to make mortgage payments on their home.

Avoiding Foreclosure Scams

The most important thing to take into consideration in avoiding being defrauded is if a deal sounds too good to be true, it probably is fraudulent! Foreclosure proceedings are subject to public disclosure in the courts. It is therefore easy for criminals who seek to scam homeowners by obtaining information about their foreclosure and making false representations to the beleaguered homeowner.

foreclosure advocate for homeownersAnother type of foreclosure scam which is common involves alleged foreclosure counseling companies. Sometimes these companies solicit business with flyers dropped off in homeowners’ mailboxes or they actually come knocking on the door of homeowners whose homes have been placed into foreclosure by financial institutions.

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