Archives for April 2014

Citibank Fails to Show it Has Standing to Bring a Foreclosure Proceeding

foreclosure defense for homeownersIn a case before Justice Carolyn Wade, in the Supreme Court of Kings County, in a Foreclosure Part, CitiMortgage moved for summary judgment in a foreclosure lawsuit. The bank submitted a copy of a note which the Williamsons, the defendants in the proceeding, executed. The note was payable to Premium Capital Funding. The Williamsons acknowledged they had this debt and that they had executed a mortgage to Premium Capital Funding. Premium Capital Funding had executed an assignment of the mortgage to CitiMortgage.

The defendants had submitted arguments the plaintiffs’ affidavits which were submitted do not conform with New York State Law and therefore should be considered defective. They also claimed there was an endorsement on the allonge which was also defective.

Bank Does Not Have Standing to Bring The Foreclosure Lawsuit

CitiMortgage failed to establish it was the appropriate holder of the note. Justice Carolyn Wade rendered a decision stating that Citibank failed to submit the documentation substantiating that CitiMortgage was the appropriate successor to CitiFinancial Mortgage Company. CitiFinancial Mortgage Company was the name of the institution which Premium Capital Funding had assigned the note and mortgage to.

Note Not Physically Delivered

Justice Wade in her decision also indicated CitiMortgage failed to establish it was the actual holder of the original note and mortgage by way of physical delivery. The Judge’s decision went on to state the allonge and note were undated and had not been affixed to the mortgage. (It should be noted that an allonge is a document which modifies, changes, and provides further information with regard to a mortgage). Judge Wade in her decision also stated an out of state affidavit needs to be accompanied by a Certificate of Conformity in the appropriate admissible form before it can be accepted in a proceeding in a New York State court. The affidavits herein were not in conformity and therefore are considered defective. CitiMortgage’s application for summary judgment was therefore denied.

Conclusion

Time and time again in the numerous articles I have written, lack of standing affirmative defenses have been successful in preventing banks from successfully bringing summary judgment motions in foreclosures. It is therefore extremely important in every foreclosure lawsuit the defendants allege a lack of standing argument. Until the lawsuit is initiated and discovery takes place within the confines of the lawsuit, it is usually impossible to ascertain as to whether the appropriate financial institution is bringing the foreclosure legal action. Stated in another form, the defendant homeowners don’t know whether the right party is suing them and therefore it is necessary to allege a lack of standing affirmative defense in all cases where the plaintiff in the foreclosure lawsuit is not the original financial institution that granted the mortgage loan.assisting homeowners

Homeowner Seeks to Rescind Mortgage Loan in Foreclosure Proceeding

mortgage and foreclosure attorneyBank of New York Mellon (hereinafter referred to as “BNYM”), had brought an application for summary judgment against the Kahn defendants in a foreclosure legal action. BNYM sought to have the Kahn’s Answer and Counterclaims dismissed. The Kahn’s cross-moved for partial summary judgment. They claimed, in their counterclaim, there was a violation of the Truth in Lending Act.

Mortgage Loan Assigned

The Kahns, after initially purchasing their home, refinanced their mortgage with Countrywide Home Loans. Countrywide Home Loans assigned the mortgage to BNYM. BNYM had initiated the proceeding to foreclose on the Kahns’ home. The Kahns had submitted an Amended Answer. In their Amended Answer they sought to assert a rescission claim. This rescission counterclaim alleged a violation of the Truth in Lending Law by Countrywide Home Loans. They claimed that Countrywide had understated the finance charges by more than $35 in the required Mortgage Financial Disclosure Statement. They claim this was a material misrepresentation in the mortgage disclosure statement. BNYM argued the rescission claim was not presented in a timely manner. They claimed the Amended Answer was served more than three years after the time of closing and therefore in violation of the statute of limitations with regard to the legal theory of rescission.

Relation Back Doctrine Doesn’t Toll the Statute of Limitations

Judge Anil Singh ruled the relation back doctrine alleged by the Kahns did not apply in deciding whether a claim to rescind a transaction was timely made. Judge Singh also noted when rescinding a transaction the timing of the rescission notice is based on when the creditor receives the notice. In this case, Judge Singh held the notice to rescind the matter was received more than three years after the transaction took place and therefore was beyond the statute of limitations for rescinding the transaction. Therefore Judge Singh held the Kahns could not assert the right to rescind this transaction in their counterclaim in the pending foreclosure proceeding. Summary judgment by BNYM was granted and the Kahns partial summary judgment was denied.

Conclusion

The Kahns in this case created a very innovative defense to the foreclosure proceeding. Their defense basically stated there had been a violation of the Truth in Lending Law, albeit a very small violation, involving $35 by Countrywide Home Loans at the time of the refinance. Therefore because of this violation they were rescinding the entire transaction. The court in this case held there was a three year statute of limitations with regard to rescinding a transaction of this type. Therefore the Kahns had to provide Countrywide Home Loans notice with the rescission within three years from the date of the closing. In this case, the Kahns provided Countrywide Home Loans notice of the rescission as part of a counterclaim alleged more than three years after the date of closing. Judge Singh held the Kahn’s argument that their counterclaim, submitted in the foreclosure lawsuit, should be considered to be related back to the time of the closing.

I like the argument. If I was the judge, I would have upheld it!homeowner advocates

Court Bars Collection of Interest and Fees on Loan For Failure of Mortgage Company to Negotiate in Good Faith

foreclosure settlement attorneysJustice Kenneth Sherman sitting in the Supreme Court Foreclosure Part in Kings County recently had a case before him involving what he felt was the bank’s failure to negotiate in good faith at the mandatory foreclosure settlement conferences. A special referee had written a report requesting all interest be tolled on a loan provided by American Home Mortgage Servicing (hereinafter referred to as “AHMS”) and they be further barred from collecting attorney’s fees related to their initiating a foreclosure legal action. Judge Sherman acknowledged receipt of the report and scheduled the matter for a hearing to decide if American Home Mortgage Servicing had engaged in bad faith negotiations at the mandatory foreclosure settlement conferences.

Statute Requires Good Faith Negotiations

Judge Sherman noted mandatory settlement conferences were required with regard to all foreclosure lawsuits brought concerning residential mortgages. In this case, the defendant was a resident of the property that was being foreclosed on. The enabling statutes creating the mandatory residential foreclosure conference parts mandated all parties negotiate in good faith at these foreclosure settlement conferences. Judge Sherman stated in his decision American Home Mortgage Servicing was represented by an attorney at the settlement conferences. However, the attorney for American Home Mortgage Servicing did not have the appropriate contractual authority to negotiate a loan modification in good faith which would resolve this foreclosure proceeding. The court specifically stated in its decision that on April 23, 2009, and on October 5, 2010, the attorneys for American Home Mortgage Servicing failed to appear by an attorney who had actual knowledge, ability and authority to negotiate a mortgage modification in a meaningful manner. Therefore the Judge ruled AMHS did not comply with New York Civil Practice Law and Rules Section 3408(c). This statute requires all parties to foreclosure court conferences negotiate in good faith. The court therefore barred AHMS from collecting any claimed interest, penalties and attorneys’ fees or costs incurred from the loan from April 23, 2009 to October 5, 2010.

Conclusion

Financial institutions are legally obligated under New York law to negotiate in good faith for the purpose of working out mortgage modifications at the mandatory foreclosure court conferences. Financial institutions who are represented by attorneys who have no real authority to work out reasonable loan modifications can be considered to have acted in bad faith, and in violation of New York State law.

foreclosure advocate for homeownersElliot Schlissel is one of the leading foreclosure defense attorneys in the Metropolitan New York area. For more than 45 years he has helped his clients fight foreclosure proceedings, obtain mortgage modifications and continue to live in their homes. He offers free consultations to all prospective clients.

Bank Fails to Prove it Has Standing on Date Foreclosure Action Started

foreclosure defense lawyerJustice David Schmidt, sitting in the Supreme Court Foreclosure Part in Kings County recently had a case before him concerning a foreclosure on a home where the defendant submitted a lack of standing defense. The foreclosure action was brought by US Bank as the trustee for Morgan Stanley Mortgage Loan Trust (hereinafter referred to as “MSMLT”). During the course of this proceeding, the attorneys for MSMLT brought a summary judgment motion against the defendants. (A summary judgment motion is a motion that alleges there are no questions of fact concerning the issues in the case and therefore the moving party should be entitled to judgment without the necessity of having the case go to trial).

The defendants submitted seven affirmative defenses in their answer. One of those affirmative defenses alleged the bank lacked the standing to bring this foreclosure lawsuit.

Lack of Standing

MSMLT argued that the defendants defaulted on the note due to the failure to make timely mortgage payments. The defendants had not made mortgage payments for a period of two years before MSMLT had started the lawsuit to foreclose on the their home. MSMLT alleged in their pleadings they were the holder of the note and mortgage which had been endorsed in blank and delivered to them before the lawsuit was initiated.

Justice David Schmidt denied the plaintiff’s application for summary judgment. He took the position the attorneys for MSMLT had failed to offer evidence of their standing to bring the foreclosure proceeding against the defendants. They failed to prove they had the note at the time of the commencement of the action. Judge Schmidt found there were triable issues of fact regarding delivery of the note from the original lender and endorser, Hemisphere National Bank, to MSMLT. The court further stated in its decision MSMLT made conclusory statements it had “continuous possession” of the note. These conclusory statements were not sufficient to establish standing in the eyes of the judge. The judge ruled plaintiff’s allegations that equated the possession of the note with the Uniform Commercial Code’s requisite delivery requirements was not convincing and therefore he denied the motion.

Conclusion

In each and every foreclosure lawsuit, the attorneys for the homeowners should allege a lack of standing defense. Our office has had numerous cases where banks have been unable to successfully foreclose on our client’s property due to their failure to prove they had standing to initiate the foreclosure lawsuit.

assistance for homeownersElliot S. Schlissel is one of the leading foreclosure lawyers in the Metropolitan New York area having helped scores of his clients to stay in their homes and fight foreclosure lawsuits.

Mortgage Lenders: Are There Differences Between Them?

foreclosure defense lawyerThe first thing most prospective homeowners think about with regard to a mortgage is, what will be the interest rate? Obviously, the lower the interest rate, the less the mortgage will cost the consumer. However, there are other important issues to think about when applying for a mortgage.

What Type of Institution is Best For You to Deal With

Large national banks in some areas of the country dominate the mortgage marketplace. Examples of these types of banks are, JP Morgan Chase, Citibank, and Bank of America. Large financial institutions set their own guidelines with regard to underwriting requirements for mortgage loans. Most large financial institutions do not pay commissions to third party mortgage brokers. This brings the cost of obtaining a mortgage from a large financial institution down. These banks will, if you take a mortgage out from them, provide you with incentives such as paying you higher rates of interest on savings and checking accounts. If you deal directly with a large banking institution, you should try to develop a rapport with the individual at the bank handling your transaction. This will be helpful to you should there develop problems in the underwriting process.

Online Financial Institutions

The internet provides its own marketplace for financial institutions to advertise regarding mortgage loans. Online financial institutions are better suited to refinancing mortgage loans than initiating mortgage loans on the purchase of a home. Sometimes problems arise when dealing with online lenders because they are not located in the community and may not be familiar with the problems in the local real estate market. There is a benefit from dealing with a financial institution on a face to face basis.

Do You Need a Mortgage Broker?

Mortgage brokers are not technically working for a financial institution. They are middlemen who usually work on a commission basis. They may have contacts with a number of lending institutions. They can be helpful to you with regard to properly filling out the necessary forms required in a mortgage application. They also may be in a position to shop around for the best deal you qualify for. In special situations where you have a problem related to your property or your property is of a unique nature they may be able to find a financial institution to specifically fit your needs. They can also run interference for you with the financial institution and eliminate some of the busy work you may need to do with a direct lender. You should take into consideration however, since they are a middleman, and they will be working for commission, they may bring up the cost of the acquisition of your mortgage.

Conclusion

The purchase of a single family home is usually the largest transaction an individual or family will be involved in. Care should be taken when applying for a mortgage to see that the type of institution and deal you are offered is the most appropriate one for your particular circumstances.

assisting homeownersElliot S. Schlissel is a foreclosure defense lawyer. Elliot has published several hundred articles with regard to foreclosures, mortgage modifications, and other real estate issues. Elliot and his staff of attorneys represent homeowners having financial difficulties and who face foreclosure lawsuits in the Metropolitan New York area. Elliot and his attorneys have developed an expertise in dealing with financial institutions, helping their clients obtain mortgage modifications, and stopping financial institutions from successfully foreclosing on their homes when they fall behind on their mortgage payments. He offers free consultations to prospective clients.

The Facts About Home Loans in Today’s Home Mortgage Market

Obtaining a mortgage is becoming a bit easier. Credit scores required by financial institutions to qualify for a mortgage loan have been coming down. The average credit score for loans that have recently closed is down to approximately 730. This is on a scale which ranges between 300 and 850. Only a year ago, you would have needed a credit score of a minimum of 750 to qualify for a mortgage to purchase a home. You should note, that although the average credit score is approximately 730 on home loans which have recently closed, there are some financial institutions that are now offering mortgages to individuals with credit scores as low as 700. This allows more potential homeowners to have the opportunity of purchasing the American dream, a single family home.

What Are Loan to Value Ratios?

When a bank underwrites a mortgage loan application, one of the significant items they look into is called the loan to value ratio. The loan to value ratio compares the appraised value of your home to the amount of money you seek to borrow. An example of loan to value ratio is, let’s say you wanted to purchase a home that cost $400,000. If you had enough money for a 20% down payment, which would be $80,000, the loan to value ratio you would be looking for would be 80%. This simply means you wanted to obtain a mortgage of 80% of the value of the home.

Debt to Income Ratios

When banks underwrite a mortgage loan, they look into how much money you are earning. In today’s mortgage market, they only count the funds that appear on your income taxes. Money made off the books, which doesn’t appear on a tax return, will not be considered by a financial institution when underwriting a mortgage. The debt to income ratio is sometimes referred to as “DTI”. There are actually two components of the debt to income ratio. The first component is called the “front end” debt to income ratio. This represents the percentage of your total monthly income you will have to utilize to make your mortgage payment. The second debt to income ratio is referred to as the “back end DTI”. The represents the percentage of your total gross monthly income you will pay towards your mortgage plus all other debt obligations. This would include car payments, personal loans, money owed to American Express, Mastercard, Visa, gas station credit cards, store credit cards, and all other financial obligations.

Let’s look at an example of debt to income ratios. Let’s assume your total family income is $8,000 per month. For this example, let’s use a mortgage payment of $2,000 per month and other financial obligations of an additional $2,000 per month. In this example your front end debt to income ratio would be 25% and your back end debt to income ratio would be 50%. Banks are currently using front end debt to earnings ratios of 25% and back end debt to earnings ratios of approximately 38%. These are more liberal percentages than banks were using approximately a year ago.

Conclusion

Although the easy money days regarding mortgage financing are gone, banks are now being more reasonable with prospective homeowners with regard to loosening their standards to obtain mortgages.

helping homeowners stay in their homesElliot Schlissel is a foreclosure attorney. For more than 45 years, Elliot and his associate attorneys have been litigating all types of real estate and foreclosure cases. Elliot’s goal is to help his clients stay in their homes and fight off foreclosure lawsuits brought by financial institutions. He also assists his clients in obtaining mortgage modifications on their homes.

Reducing Your Mortgage

foreclosure defense lawyerLet’s assume for the purpose of this article you own a house and you have a mortgage on your house. Your mortgage may be a 15 year mortgage or it may be a 30 year mortgage. Is there a way you can reduce the term of the mortgage from either the 15 year period or the 30 year period? The answer to that question is yes.

Reducing Your Mortgage Payments

One of the most well known ways of reducing your mortgage payments is to make 13 mortgage payments per year instead of 12. This theory of making an additional mortgage payment once a year has been around for a considerable period of time. What is the best time to make the additional mortgage payment? Experts recommend the additional mortgage payment be made in the month of January. It is estimated if you have a 30 year mortgage and you make 2 payments in the month of January of each and every year, you will reduce the term of your 30 year mortgage to 26 years.

So, how do you find the money to make this extra payment? If you celebrate Christmas or Hanukkah in the month of December, you may be deeply in debt by the month of January. There are two ways of accumulating funds to make this extra mortgage payment. The first is, if you receive a bonus, utilize the bonus to make the extra mortgage payment. The second method is file your tax return early, get your refund quickly and use your tax refund for that extra January mortgage payment.

Lowering Interest Rates

Interest rates on home mortgages fluctuate based on numerous economic factors. You should be aware of the interest rate you are paying on your mortgage. Periodically you should review newspapers or online websites and determine what the current interest rates are. If the current interest rate is more than a point and a half lower than what you are currently paying on your mortgage you should consider refinancing. Over the long run refinancing your mortgage payments may save you tens of thousands of dollars.

Conclusion

homeowner advocatesAlmost all homeowners who purchase a home borrow money from financial institutions for the acquisition of their home. Once the money is borrowed, the mortgage payments start. It is prudent to make those mortgage payments end as quickly as possible.

Knowledge Of False Information In Financial Documents Used In a Mortgage Transaction Bars Recovery

foreclosure defense attorneysJudge Joseph Bianco, sitting in the United States District Court for the Eastern District of New York, recently had a case involving various improprieties concerning the acquisition of a mortgage. Plaintiffs, in this case, had obtained a mortgage on their home from Countrywide Mortgage Company (hereinafter referred to as “Countrywide”) in the year 2004.

After experiencing financial difficulties involving large credit card debt and anticipating a potential bankruptcy and/or foreclosure proceeding, they obtained a second mortgage on their home in the year 2008. Both the first mortgage and the second mortgage were combined in a “Consolidation, Extension and Modification Agreement (CEMA)”. The plaintiffs presented arguments that the 2008 transaction was fraudulent. They claimed Countrywide placed false financial information into their mortgage application in 2008. They also claim Countrywide concealed the 2004 mortgage was “split” from its underlying note as a result of the assigning of the mortgage to the Mortgage Electronic Registration Systems.

Judge Bianco after considering the arguments rendered a split decision. He rendered a decision dismissing the plaintiffs’ allegations of fraud because they had actual knowledge false financial information was contained in the 2008 mortgage loan documents. In spite of the fact they knew the information was false, they executed these documents. He went on further to say although the plaintiffs allege the 2004 mortgage note was invalid, their “splitting” theory was not in compliance with New York State’s “principal-incident rule”. A mortgage is unenforceable if it is detached from its note. However, the note is enforceable even if it is not maintained with the mortgage.

Quiet Title Claim Allowed to Continue

Although Judge Bianco dismissed the plaintiffs’ claims of fraud to set aside the 2004 and 2008 transactions, he did allow the lawsuit to continue under the theory the plaintiffs’ may be entitled to quiet title on this matter. Quiet title means having the mortgage rendered invalid against the property and the removal of the lien from the property.

foreclosure advocate for homeownersElliot Schlissel is a foreclosure attorney representing families who seek to fight foreclosure lawsuits throughout the Metropolitan New York area.

New Mortgage Rules’ Negative Impact on the Housing Industry

foreclosure defense attorneyThere are new rules which affect financial institutions involved in the mortgage business in the United States. Lenders have to be able to verify the individuals they loan money to can repay their home mortgages. This is pursuant to the new rules designed by the Consumer Financial Protection Bureau under the Dodd- Frank Law that regulates Wall Street.

New Consumer Protection Laws

Under the new consumer protection laws, banks have to take into consideration a variety of factors when making mortgage loans. Included in these factors are the income of the borrower, the financial health of the borrower, the borrower’s credit history, and his or her other debts. The purpose of the reform law is to prevent the meltdown in the home mortgage industry that took place between 2000 and 2009 which caused millions of Americans to have their homes sold in foreclosure sales. The new statutes seek to prevent lenders from engaging in loaning funds for home mortgages to individuals who simply cannot afford to pay back the loans.

Other Aspects of The New Consumer Protection Laws

The law deals with a homeowner’s ability to pay their mortgage has created a lot of concern for financial institutions. Mortgage lenders are concerned if the homeowners fail to make their mortgage payments and their homes are foreclosed on by banks they will claim in the foreclosure actions the financial institutions had known or should have known that they couldn’t afford to make the mortgage payments under these loans.

New Regulations Affect Low Income Prospective Homeowners

Experts in the mortgage industry are claiming the new regulations will make it very difficult for low income prospective homeowners to qualify for mortgage loans. They claim the new regulations will give the banks less flexibility in working with low income mortgagors. The regulations also regulate mortgage servicing companies.

helping homeowners stay in their homesElliot S. Schlissel is a foreclosure lawyer representing homeowners facing foreclosure lawsuits throughout the Metropolitan New York area.

Judgment of Foreclosure and Sale Vacated The Case To Be Brought Back to the Foreclosure Settlement Part

foreclosure defense lawyerJP Morgan Chase had initiated a foreclosure legal action and had been granted summary judgment. In addition, a referee was appointed to compute with regard to the sale. The property never was sold at auction. JP Morgan Chase thereafter brought a proceeding before Justice Francesca Connolly in Westchester Supreme Court requesting the Order of Reference and Judgment of Foreclosure and Sale be vacated. They took this action because they claim they were unable to comply with Administrative Order 431-11. Justice Connolly granted JP Morgan Chase’s unopposed application. The Order of Reference and Judgment of Foreclosure and Sale were vacated. Thereafter, Chase brought a motion for summary judgment again and for another Order of Reference. The court decided the defendants were entitled to have the matter sent back to the foreclosure settlement conference part.

Since the property involved was residential which was occupied by the owners of the property, and the action was started before September 1, 2008, and a final judgment had not been entered, it was appropriate that the defendants had a statutory right to request the matter be sent back to the foreclosure conference part to try to settle the matter with the bank.

assisting homeownersElliot Schlissel is a foreclosure lawyer with more than 45 years of legal experience, who has successfully represented homeowners throughout the Metropolitan New York area in foreclosure lawsuits.

Foreclosure Defense in Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick and Bellmore, New York

We represent individuals throughout the New York Metropolitan area with divorce and child custody, personal injury, car accident, wrongful death, estate administration, nursing home and medicaid issues

The information you obtain at this website is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your particular legal issue. This is attorney advertising.

This is attorney advertising. This website is designed for general information purposes only. The information presented on this website shall not be construed to be legal advice. If you have a legal problem you should consult with an attorney.

Copyright © 2018 By The Law Offices of Schlissel DeCorpo. All Rights Reserved.