Archives for February 2016

Mortgage Time Barred And Therefore Cancelled and Discharged

foreclosure attorney Long IslandIn a case before Justice Yvonne Lewis sitting in the Supreme Court Foreclosure Part in Kings County, defendant Ellery Beaver LLC brought an application for summary judgment seeking the discharge of HSBC’s mortgage on their property. HSBC brought a cross application for dismissal of the action by the plaintiff.

In this case, Renee took out a mortgage on her property. The mortgage was assigned to HSBC from the prior financial institution. HSBC brought a foreclosure action in 2006 claiming Renee defaulted in making the mortgage payments. HSBC’s original lawsuit was dismissed. In 2009, a second foreclosure action was started by HSBC. This was also conditionally dismissed in 2013 for failure to prosecute by HSBC.

Renee eventually sold the property to Ellery. More than a year passed and thereafter HSBC brought an application to restore the 2013 lawsuit which had been dismissed. Justice Yvonne Lewis denied this request. HSBC took the position the statute of limitations hadn’t run. However, the court took the position since HSBC accelerated the debt upon the filing of the first lawsuit, the statute of limitations had run and therefore any attempt to foreclose was time barred. The judge took the position Ellery was entitled to a judgment dismissing the mortgage because HSBC failed to successfully commence a foreclosure lawsuit within the six year statute of limitations time period. The judge ordered HSBC’s mortgage be dismissed and discharged.

Conclusion

This is a major win for homeowner’s rights. Even though lawsuits can be held to be time barred under the statute of limitations, it is very unusual a judge will go so far as to remove the mortgage lien from the property even though action upon the note is time barred.foreclosure defense lawyer

Suing Large Financial Institutions

foreclosure defense attorneyThe Consumer Financial Protection Bureau is reviewing new regulations which will put the brakes on a contentious practice called mandatory arbitration. Under mandatory arbitration rules, consumers must take disputes they have with financial institutions to third party mediators. This prevents them from going into courts and presenting their issues to judges. Consumer advocates feel this practice benefits large financial institutions, credit card issuers and financial service providers to the detriment of consumers.

Fine Print in Consumer Contracts

Most Americans are unaware that there is fine print in many consumer contracts which requires they submit complaints concerning issues, such as disputed charges on financial accounts, to arbitration. Consumer advocates claim arbitrators are often biased and rule against consumers. It should be noted, in many situations, rulings by arbitrators are not appealable.

Arbitration Process

The arbitration process started out as a good idea. Its intent was to give consumers an inexpensive way to challenge bank practices. However, financial institutions have manipulated the arbitration process. When they feel an arbitration firm does not rule in their favor on a regular basis, they shop around for other arbitration companies. This gives arbitration companies a reason to rule in favor of banks so they will hire them again and again.

George Slover with the Consumer’s Union, the public policy and advocacy arm of Consumer Reports Magazine, stated “this proposal is a tremendous step towards cleaning up a system that has heavily favored companies over consumers who were wronged.”

The new proposal before the Consumer Financial Protection Bureau does not create a complete ban on arbitration. It proposes new rules which would allow unhappy consumers to start lawsuits against banks or other financial institutions as a group, through class actions, if they feel it is appropriate instead of submitting to arbitration.

foreclosure defense lawyerElliot S. Schlissel is a foreclosure lawyer representing consumers throughout the Metropolitan New York area. He litigates foreclosure cases against financial institutions. His goal is to keep his clients in their homes.

Bank’s 4 ½ Year Delay In Entering Judgment in a Foreclosure Case Are Grounds to Dismiss the Lawsuit

foreclosure attorney New YorkJustice Phyllis Orlikoff Flug sitting in a Foreclosure Part in Queens County Supreme Court recently had a case where the defendants moved to dismiss the bank’s lawsuit in a foreclosure legal action. The lawsuit had been initiated against the defendants Michael Pertab and Cholying Pertab in 2010. Michael had been served by personal service in July 2010 and Cholying had been served by substituted legal service in August 2010.

After more than 4 ½ years after the lawsuit was initiated the defendants appeared in this lawsuit. The court took notice the lawsuit was more than 4 ½ years old before the defendants decided to appear in the case.

Law Requires Entry of a Default Judgment Within One Year

Justice Flug took note that New York Civil Practice Law and Rules Section 3215(c) stated that if a plaintiff failed to take action to enter a judgment within one year after the default took place no entry should be made, but instead, the claim should be dismissed as being abandoned. The only exception to this rule was if there was sufficient cause shown why the dismissal should not be warranted. In this case Judge Flug found the plaintiff’s excuses for the delay in entering the judgment included a change of their lawyer, issues concerning the assignment of the mortgage to a new party, and administrative order 431/11. However, Justice Flug found that none of the explanations justified their delay of 4 ½ years with regard to moving forward to enter a default judgment. Justice Flug therefore granted the defendants’ (homeowners) motion to dismiss the case.

Conclusion

If a bank brings a lawsuit against you and they fail to enter a judgment within one year you have a basis for moving to have the action dismissed. A one year delay in banks moving forward to enter judgment is not unusual!

foreclosure defense lawyerElliot S. Schlissel is a foreclosure defense lawyer representing homeowners with regard to obtaining mortgage modifications and fighting foreclosure lawsuits throughout the Metropolitan New York area.

Foreclosure Defense Advice for 2016

foreclosure attorney New YorkIn many parts of the country, the real estate crisis which has caused the high rate of foreclosures is easing. Unfortunately, this is not the case in the Metropolitan New York area. There is expected to be a large flow of new foreclosure cases coming into the courts in 2016. Here is my New Year’s advice for foreclosures which start in the year 2016.

Don’t Ignore the Foreclosure

In my decades of representing homeowners whose homes go into foreclosure, I am shocked by the number of homeowners who simply put their heads into the ground and ignore the fact that their financial institution is taking legal action against them. There are many things that can be done to stop foreclosures from moving forward, to obtain mortgage modifications, to get banks to pay attention to your situation, to tie cases up in court and to challenge the appropriateness, the standing, the basis of the lawsuit and to move to set the mortgage aside. Do not be an ostrich if your home is going into foreclosure. Obtain the legal services of a competent, experienced foreclosure defense attorney.

Look Into Your Legal Options

As stated in the prior paragraph, ignoring the situation is not a smart option to take. If you haven’t applied for a mortgage modification, apply for one. God helps those who help themselves. The worst that can happen is you will get turned down.

Disaster Situations

If you have been subject to a natural calamity or disaster, which has caused a hardship for you or your family, contact your lender and put them on notice of the situation. They may be able to provide you with a forbearance agreement to help you get on your feet.

Refinancing the Loan

If your mortgage loan is not working out for you, before you fall far behind look into the possibility of refinancing your mortgage. Don’t wait until you are many months behind to consider this option. By then it will be too late!

Sell Your Home

If your home has equity in it, and you can’t afford it, selling your home is an option. You can sell the home and keep the equity which exists in your home. Although many homes are going into foreclosure in the Metropolitan New York area, real estate values are increasing. Your home may be worth more than you think it is worth. This is something you should look into.

Bankruptcy

Bankruptcy should be the last option you look into, not the first. There are two types of bankruptcies a homeowner can file. A Chapter 13 bankruptcy is a repayment plan which can help you become current on your existing mortgage over 5 years. A Chapter 7 bankruptcy eliminates the personal obligation on your debt. The filing of either of these bankruptcies creates an automatic stay received from a federal court. This stops foreclosure lawsuits from going forward during the pendency of the bankruptcy.foreclosure defense lawyer

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