Archives for May 2014

Owning a Home is Better Than Renting

mortgage modification attorneysThere are a number of factors that should be taken into consideration when comparing the benefits and problems of home ownership versus renting.

No Mortgage vs. No Landlord

When you own a home you are in charge. It is yours! It belongs to you. If something breaks, you fix it. When you rent, you are living in the landlord’s house. If something breaks you need to contact the landlord to fix it. Landlords are not always very responsive to helping their tenants deal with problems in their apartments.

Fixed Rate Mortgages Don’t Go Up: Rent Does!

If you buy a house and obtain a fixed rate mortgage, you will pay the same amount each and every year. If you rent an apartment, periodically the landlord will raise your rent. It should be noted although your mortgage rate won’t go up, taxes on real property go up over time.

Homeowners Obtain Tax Deductions for Mortgage Interest

There are significant tax benefits for owning a home. You can deduct, in your federal and state income taxes, the interest paid on your mortgage. In addition, there are a variety of energy efficient improvements to the home that can be made which are also tax deductible. When you sell your home, the first $250,000 in profit payable to the owner of the home is not subject to capital gains tax.

Managing Your Own Space

When you are in an apartment there are small cosmetic things you can do. However, you cannot customize the space to meet all your needs. If you own a home, you can move walls and do anything you want with it. The space can be modified to meet all of your personal needs and/or whims.

Homeowners Can’t Be Evicted

If you rent an apartment and you don’t pay rent, thirty days afterwards a landlord can bring a summary proceeding and have you removed from the apartment. Eviction proceedings are relatively quick proceedings (although in the City of New York they can take as much as six to eight months). However, if you don’t pay your mortgage, and a financial institution has to bring a foreclosure lawsuit, those proceedings can take as long as three to five years. During that period, you can be living in your home while not making mortgage payments.

assisting homeownersElliot S. Schlissel is a foreclosure lawyer. He represents clients whose homes are going into foreclosure. He helps them stay in their homes, obtain mortgage modifications, and litigate a variety of issues involved regarding foreclosures with financial institutions. Elliot can be reached for a free consultation at 1-800-344-6431, 516-561-6645, and 718-350-2802.

Foreclosure Dismissed: Bank Makes Technical Mistake

foreclosure defense for homeownersIn a case before Justice Wilma Guzman in Bronx County, Judge Guzman dismissed a foreclosure lawsuit. Deutsche Bank had sued for foreclosure. They moved for a judgment of foreclosure and asked that they be allowed to sell the property. The defendant, Samuel Lopez, brought a cross-motion. He asked that the foreclosure proceeding be dismissed. He claimed there was a failure to comply with a condition precedent of Real Property Actions and Proceedings Law sections 1303 and 1304. He argued in his motion the section 1304 notice to the defendants, provided by American Servicing Company, indicated it was a debt collector and informed defendants they had a right to cure their default and failure to do so might result in American Servicing Company starting a lawsuit against them. Deutsche Bank argued it was in full compliance with section 1304. It was pointed out its notice to the defendants did not contain the method in which the notice had been mailed. This is required by this section of the law.

No Evidence of Mailing

Judge Guzman took into consideration in rendering her decision to dismiss the foreclosure action that no evidence was presented of a first class mailing. There was also no affidavit of mailing for a lender, the lender’s agents or any individual with personal knowledge of the transaction. Justice Guzman’s decision stated a mortgagee’s failure to strictly comply with a condition precedent required the dismissal of this foreclosure legal action.

In this case, American Servicing Company did not provide documentation they were the appropriate loan servicing agent for Deutsche Bank. They also did not fully comply with section 1304 of the Real Property Actions and Proceedings Law. Justice Guzman also pointed out in her decision the Home Equity Theft Prevention Act required a notice as a mandatory “condition” before a financial institution could proceed with a foreclosure lawsuit. The failure of Deutsche Bank and its servicing agent to strictly comply with this statute was valid grounds to dismiss this case.

Conclusion

helping homeowners stay in their homesIf a bank doesn’t dot its i’s and cross its t’s, you can get the case dismissed!

Strategic Default

foreclosure assistance for homeownersMortgage Basics

Individuals who take out a mortgage or refinance a mortgage generally execute two types of documents. The first is a promissory note. A promissory note is simply an “I owe you.” It creates a financial liability to repay the amount borrowed. The second item that is executed at the time of the closing is a mortgage. The mortgage is the document that secures the debt obligation. The mortgage provides the bank with a lien on your property. If you don’t make the mortgage payments the bank forecloses and sells your property at auction.

What Banks Do When You Don’t Make Payments

The first thing a bank does if you stop making your mortgage payments is they analyze the value of your home and its liquidation ability to pay the loan off. They then hire an attorney and the attorney files a foreclosure legal action on behalf of the bank.

Deficiency Judgment

If when your home is sold in the foreclosure sale, the amount received by the bank is insufficient to pay off the promissory note, a deficiency exists. A bank can bring a second lawsuit to obtain a judgment against you and force you to pay this deficiency amount. Here is an example. Your home is worth $300,000. But you owe $400,000 on it related to your mortgage. You fall behind and the bank takes legal action against you and eventually they sell your home. At the time of sale a speculator buys your home for $200,000 ($100,000 less than it is actually worth. This often happens because at foreclosure sales, speculators bid cash on homes that they know very little about other than an appraisal from the exterior and review of what other homes in the area sold for).

The bank receives only $200,000 from the transaction when you owe them $400,000. That leaves a deficiency against you of $200,000. The bank can sue you and obtain a judgment for that $200,000. One remedy you would have would be to thereafter file bankruptcy and eliminate the balance of the deficiency.

Strategic Default and How It Works

A strategic default involves taking into consideration whether your home is under water and it may never be worth the value of the mortgage. You simply stopped making your mortgage payments. Thereafter later on you negotiate a short sale, a mortgage modification, or a deed in lieu of foreclosure.

Strategic default means you are simply walking away from your mortgage. It takes place when a borrower decides he or she is going to intentionally not pay his or her mortgage because it no longer is financially practical. This usually occurs when the house is under water (worth significantly less than the amount of the mortgage).

Strategic default should not be undertaken without sound legal advice from an experienced attorney who has handled numerous transactions of this nature. There are a variety of pitfalls that can take place concerning a strategic default. If you are considering walking away from your home and/or mortgage because you can’t afford to pay it, feel free to call our office for a consultation. This is not a matter that should be taken lightly. Although a strategic default may be appropriate in some situations, there are many situations where it is not.

assisting homeownersElliot S. Schlissel is a foreclosure lawyer. He has helped scores of his clients stay in their homes and fight foreclosure proceedings. Elliot sues banks and other financial institutions who have broken laws, failed to obtain appropriate assignments, and who do not have appropriate standing to bring foreclosure lawsuits. His phones are monitored seven days a week. Call for a free consultation.

FHA Gives Homeowners a Second Chance to Buy a Home

foreclosure defense for homeownersThe Federal Housing Authority (FHA) has a new program which will stay in effect until September 30, 2016. This program offers homeowners who have lost their homes due to short sales, whose homes have been sold in foreclosure, or who have given deeds in lieu of foreclosure back to financial institutions, a second opportunity to purchase a home. In the past, if a consumer lost their home related to a foreclosure case, they would have to wait thirty-six months before they could apply for a new FHA loan. However, under this new program, they would only have to wait twelve months after a foreclosure sale or a short sale to apply for a new FHA loan as long as they can document the financial issues that caused them to lose their prior home.

Reduction in Income

If the prospective homeowner can show that they had a loss of income of twenty percent or more for a minimum of six months prior to the loss of their home, it will help them qualify under this new program.

Credit Score

Under the new FHA program, the homeowner will need a credit score with a minimum of 640. In the event the prospective homeowner could not meet this credit score requirement, they must go through a HUD approved counseling agency concerning the issue of home ownership and residential mortgage loans.

The homeowner should be aware that supporting documentation with regard to any financial issues, hardships, illness, loss of employment or other problems that caused the individuals to lose their initial home must be fully documented. A letter explaining the situation will not be sufficient to qualify for this new FHA program.

Conclusion

FHA is extending themselves to homeowners and giving them a second chance that has never previously been offered to families who have lost their homes.

helping homeowners stay in their homesElliot S. Schlissel is a foreclosure defense lawyer. Elliot and his staff of attorneys represent individuals and families throughout the Metropolitan New York area whose homes have been foreclosed upon by financial institutions and mortgage companies. Elliot assists his clients in mortgage modifications. In addition, Elliot brings lawsuits against financial institutions who have broken laws, failed to obtain proper assignments and who do not have standing to bring their foreclosure lawsuits. Elliot has an unparalleled record of success in keeping his clients in their homes after foreclosure proceedings have been initiated against them.

New Federal Mortgage Disclosure Requirements

mortgage and foreclosure attorneyThe Consumer Financial Protection Bureau has propounded new mortgage disclosure requirements. Financial institutions and mortgage lenders will need to provide individuals and families who take out mortgages with much more detailed disclosure material at the time of closing on the loan. The new disclosure requirements replace the existing Truth in Lending Statements, HUD-1 Settlement Statements and the present Good Faith Estimate Disclosure Statements required to be provided by financial institutions.

Three Business Day Requirement

All individuals applying for loans must receive, under these new requirements, loan estimates within three business days. These loan estimate disclosure documents must provide the specific loan terms and the estimated expenses the borrower will incur at the time of closing on the transaction. A second additional disclosure statement will also have to be provided to the individuals taking out a mortgage within three business days before the actual closing takes place. This disclosure document will need to provide a detailed accounting of all aspects of the mortgage loan transaction.

Effective Date August 1, 2015

The new rules promulgated by the Consumer Financial Protection Bureau will go into effect on August 1, 2015. All loans processed after that date will require the dual disclosures discussed above.

Financial institutions and mortgage companies have been modifying their procedures to deal with these new rules and regulations that will go into effect in approximately a year and a quarter. These changes to the disclosure requirements which providers need to give consumers, are the most significant changes and modifications regarding mortgage loan disclosures that have taken place in decades. It is hoped that these new disclosure requirements will educate consumers as to how much they are borrowing, how much it will cost them, and whether they can afford to take the mortgage they seek to obtain.

foreclosure advocate for homeownersElliot S. Schlissel is a foreclosure attorney. He has helped scores of New Yorkers stay in their homes and fight off foreclosures. Elliot and his staff of attorneys also assist their clients in filing Chapter 7 bankruptcies, Chapter 13 bankruptcies, and applying for mortgage modifications. Elliot’s greatest satisfaction is when he can help the families he represents continue to live in their homes.

Rabbi Unable to Stop Foreclosure on Synagogue

foreclosure advocate for homeownersValley National Bank brought a foreclosure lawsuit with regard to a synagogue in Brooklyn. In 2008, the synagogue borrowed $500,000 from State Bank of Long Island. This bank thereafter merged with Valley National Bank. The congregation of the synagogue alleged that the synagogue had two functions. It was a place of prayer and it was the principal residence of the rabbi and his family. They claim “this dual property function had existed since 1970 when the present rabbi’s grandfather established a congregation at its present location.

In such Hasidic Sects, the Shtiebel is the rabbi’s home and his presence is the essence of the Shtiebel.” The congregation alleged in their papers when the mortgage was taken out, the bank was made aware Rabbi Teitelbaum’s residence was located on the site of the synagogue.

A Residential Foreclosure?

The congregation argued that the foreclosure was therefore a residential foreclosure. It should therefore have been in a residential foreclosure part and not in a commercial foreclosure courtroom. As a residential foreclosure, Rabbi Teitelbaum was entitled to notice pursuant to New York Real Property Actions and Proceedings Laws concerning the residential foreclosure.

Bank Argues Rabbi Teitelbaum Has No Standing

The foreclosing bank’s position was that Rabbi Teitelbaum was not a necessary party to the foreclosure lawsuit. They claimed it was a commercial loan and he was not a signatory on the loan. The bank’s attorneys stated in their papers, “instead of presenting a modified defense to [Valley National Bank’s] claims, borrower obfuscates by mischaracterizing the facts in attempts to divert attention from its acknowledged commercial loan default by repeatedly alleging that the rabbi and his family actually reside in the synagogue that is the mortgaged commercial premises.”

Judge Holds Property is Not Residential

The judge on the case rendered a decision that the property at issue was a religious structure and not residential property. The judge went further on to hold Rabbi Teitelbaum was not an indispensable party to the lawsuit. Judge Carolyn Demarest rejected the argument submitted by Teitelbaum. She held that even though he lived on the premises, he was not a signatory to the loans, promissory note, or the mortgage. He therefore was not an indispensable party to the lawsuit.

When Judge Demarest was presented with a similar case where the Appellate Division, Second Department made a different ruling, she stated, “in this action, defendant does not establish that Teitelbaum has a lease to the property and even it Teitelbaum does have a lease he may not be dispossessed by a purchaser at a foreclosure sale absent further proceedings.” With this, she was referring to the fact in the event the bank took title to the property they would still have to bring an eviction proceeding to get Rabbi Teitelbaum, his wife and eight children, off the property.

Conclusion

This is a very close call made by Judge Demarest. I would suggest Rabbi Teitelbaum appeal this decision to the Appellate Division of the Second Department. He may be able to persuade them that he should be named as a party because he was a tenant, even without a lease. Month to month tenants are still tenants and they should be named in all foreclosure lawsuits as interested parties.

helping homeowners stay in their homesElliot Schlissel is a foreclosure attorney representing individuals and families in residential or commercial foreclosure lawsuits throughout the Metropolitan New York area. Elliot and his staff of dedicated lawyers have an excellent success rate in keeping families in their homes and stopping foreclosure lawsuits in their tracks.

Uniondale Marriott Hotel on Long Island in Foreclosure

foreclosure assistance for homeownersOne of Long Island’s largest hotels has had a foreclosure lawsuit initiated against it. The Long Island Marriott Hotel and Conference Center located in Uniondale, New York is in foreclosure. The hotel is owned by the New York Islanders’ owner, Charles Wang.

The financial institution that loaned the New York Islanders and Charles Wang $103,000,000 in 2007 has brought a foreclosure proceeding in the Supreme Court in Nassau County located in Mineola, New York.

It is estimated the amount owed on the mortgage loan on the Marriott Hotel is more than $125,000,000. The hotel had been valued in the year 2010 at approximately $150,000,000. In a recent appraisal, it was valued at $63.4 million.

Mr. Wang had initially purchased the hotel in 2005 from Marriott. He took this action as part of his Lighthouse plan to revitalize the area around the Nassau County Coliseum. In 2007, Scott Rechler of RXR Realty purchased the hotel. He was a partner of Wang with regard to the project. The Lighthouse Project which was proposed to revitalize the area around the hotel never came to fruition. Eventually, Wang bought the hotel back from Scott Rechler.

Wang had proposed to Nassau County they fund the renovation of the Coliseum. However, when this was submitted through a referendum, the voters in Nassau County voted it down. In 2012, the New York Islanders announced they were moving to the Barclays Center in Brooklyn and they would be permanently leaving Nassau County.

In 2013, Nassau County Executive Mangano entered into an agreement with Bruce Ratner, whom he had selected to renovate the Coliseum.

Conclusion

It is a sad state of events when the largest hotel in Nassau County is in foreclosure.

helping homeowners stay in their homesElliot Schlissel is a foreclosure attorney. He represents individuals in foreclosure lawsuits and mortgage modification applications throughout the Metropolitan New York area. He has been helping homeowners stay in their homes and fight foreclosure lawsuits for more than 45 years.

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