Archives for March 2016

Loan Modifications: What Are They Really? Part 1

An Hour GlassA loan modification can be defined as an agreement between a homeowner and a financial institution that changes the terms of the original mortgage loan. Homeowners who have fallen behind on their mortgage payments or who are having financial difficulties should seek to modify their mortgage loan for the purpose of obtaining a reduction of their mortgage payments that fits into their financial circumstances. It should be noted that a loan modification application does not stop a foreclosure lawsuit from moving forward. Whenever a homeowner is sued in a foreclosure lawsuit they must file a written Answer to the Summons and Complaint with the court and with opposing counsel within twenty days if served personally and thirty days if served by any other means. Failure to submit an Answer, even if a mortgage modification application is submitted, is considered a default and an admission of the allegations in the lawsuit which allows the lawsuit to move forward unopposed.

Various Mortgage Modifications

There are a variety of ways in which a mortgage can be modified. Examples of the types of manners in which a mortgage can be modified are as follows:

  1. The interest rate can be reduced.
  2. Payment terms, which are usually over a thirty year period, can be extended to as long as forty years.
  3. The arrears on the mortgage can be placed at the end of the mortgage and the payment terms extended by the amount of months in which payments were missed.
  4. Penalties and attorneys fees concerning the mortgage can be waived.
  5. Interest and late fees concerning the mortgage payments can be waived.
  6. An adjustable rate mortgage can be converted to a conventional mortgage.
  7. An adjustable rate mortgage can be converted into an interest only mortgage or a fixed rate mortgage.

All of the aforementioned ways of modifying a mortgage can be used individually or in combination with each other to create a lower cost, more affordable, monthly mortgage payment for the beleaguered homeowner.

Elliot S. Schlissel is a foreclosure attorney representing homeowners throughout the New York Metropolitain area.

Defendant in Foreclosure Lawsuit Found Not Liable to Pay the Mortgage Debt

Law books on tableIn this case, the plaintiff, Wells Fargo Bank NA, brought a residential foreclosure lawsuit against the defendant Seibold. During the course of the foreclosure proceedings, both parties brought motions before the court. Wells Fargo sought summary judgment authorizing them to sell the property and holding defendant Seibold liable. Seibold brought a motion requesting the case be dismissed and he be held not liable.

Judge Finds Problems With Mortgage Industry Practices

Justice Philip Straniere heard the case in a Supreme Court Part located in Richmond County, New York. Judge Straniere had problems with a variety of practices of the mortgage industry, and specifically with Wells Fargo with regards to defendant Seibold in this case. He questioned the circumstances under which Seibold, who did not sign the note, was added to the mortgage. He didn’t understand why the estate in this case was not made a party to the lawsuit. He questioned certain allegations with regard to the ownership of the property which was excluded from the pleadings of the plaintiff in their Complaint. In addition he wanted to know why the original transaction was scheduled as a first and second mortgage when really it was simply a single mortgage. He found that the setting up this transaction as two mortgages may have been the cause of the default on this obligation. He took the position that the lenders were engaged in deceptive practices in violation of New York’s General Business Law Section 349.

Justice Straniere concluded the defendant Seibold was not liable for the payment of this mortgage. He found he did not sign the note. He also found that Seibold had raised an issue of fact with regard to questions concerning an escrow shortage.

Conclusion

I find this to be a very troubling case. Here is a situation where a judge has basically accused Wells Fargo of a variety of improprieties. Unfortunately, my office has seen numerous cases where banks have been involved in improprieties. When we bring these improprieties to the attention of judges, more and more homeowners are relieved of their financial obligations by the judges leading these cases.

Elliot S. Schlissel is a foreclosure attorneys representing homeowners throughout the New York Metropolitain area.

Homeowner Defaults in Foreclosure Lawsuit:

gavel

CitiMortgage Forced to Vacate Default and Accept Untimely Answer

Mr. Pollard had a mortgage with CitiMortgage. He had failed to make payments and CitiMortgage initiated a foreclosure proceeding. The case moved forward without Pollard participating in the case. Eventually, CitiMortgage moved for an Order of Reference. Mr. Pollard opposed the motion and brought a cross application to vacate the default in answering and to force CitiMortgage to accept his late Answer.

No Personal Service of Foreclosure Lawsuit Papers

Mr. Pollard took the position he did not intend to default in the lawsuit and waive his claims and defenses against CitiMortgage. He indicated in his moving papers he travels frequently related to his business situation. On the day the lawsuit was initiated, his wife Odessa was home in the house. However, she claimed she was not personally served with the foreclosure lawsuit Summons and Complaint.

Judge Agrees With Homeowner

Justice Janice Taylor sitting in the Supreme Court Foreclosure Part in Queens County was assigned to hear and determine the case. She found Mr. Pollard adequately demonstrated he did not receive actual notice of the start of the foreclosure proceeding by CitiMortgage. Justice Taylor took into consideration Mr. Pollard, although he was in default in responding to the Summons and Complaint, the period of default was only a relatively short period of time. She found in her decision that Mr. Pollard lacked any intent to abandon his claims and defenses to the foreclosure lawsuit brought by CitiMortgage. She also found that due to the short period of time that had gone by since Mr. Pollard had defaulted in answering the Summons and Complaint that CitiMortgage was not prejudiced by this delay. She also found the documents submitted by Pollard and his attorney demonstrated that he had a meritorious defense to the foreclosure based on the issue of lack of standing and the failure of CitiMortgage to comply with the Real Property Actions and Proceedings Law Sections 1304 and 1306 with regard to providing him with ninety days notice before bringing the foreclosure lawsuit. Pollard’s request to vacate the default in answering the Summons and Complaint and compelling CitiMortgage to accept the service and filing of an untimely Answer was granted.

Conclusion

Even if you ignore a foreclosure lawsuit, if the proper applications are presented to the court, the case can be reopened and brought back procedurally to the point in time when it was actually initiated.

Elliot S. Schlissel is a foreclosure defense lawyer representing homeowner throughout the Metropolitan New York area. He has represented hundreds of homeowners in foreclosure cases and helped numerous homeowners obtain mortgage modifications.

Foreclosure Sale Stopped: Bank Failed to Serve Proper Notice

A clock

In a Supreme Court proceeding in Kings County, Justice Yvonne Lewis stopped a foreclosure sale from moving forward. The owner of the property brought an application to stop the sale of his cooperative apartment. He took the position he had never received proof the foreclosing bank was the owner and/or holder of the note and mortgage concerning his cooperative apartment. He claimed the position the financial institution did not send him a notice of default with regard to the mortgage. The notice of default would also require written notice the financial institution intended to accelerate the mortgage loan and call the entire balance due. When the challenge was made, the financial institution was not able to produce evidence they had legal standing to bring the foreclosure lawsuit.

The bank claimed they were not required to comply with the notice requirements concerning the mortgage because this was a security interest in a coop apartment which is not real estate. Justice Yvonne Lewis disagreed. She found upon review of the submission made by the financial institution they had failed to comply with the notice requirements. Her decision stated the notice requirements were a condition precedent that needed to be accomplished prior to the initiation of a foreclosure lawsuit. The financial institution had to provide the homeowner with ninety days notice they intended to foreclose. In addition, in this case, Judge Lewis found the foreclosure sale of the property could not go forward and they homeowners could not be evicted.

Conclusion

There are dozens of defenses to foreclosure lawsuits. If the appropriate defenses are stated in the proper manner, foreclosure lawsuits can be stopped in their tracks.

Bank Denied Interest on Note Due to Bad Faith Negotiations

Bank Denied Interest on Note Due to Bad Faith Negotiations

In a case recently decided in Kings County, New York, Justice Donald Kurtz, sitting in the Supreme Court Foreclosure Courtroom, ordered that all interest accrued on the note be forfeited because of the bank’s failure to negotiate a mortgage modification in good faith.

History of the Case

Wells Fargo Bank had started a foreclosure lawsuit. The case appeared on the Court’s calendar in Brooklyn before a referee. The referee determined the homeowner had submitted adequate documentation of his income to qualify for a mortgage modification under the Home Affordable Mortgage Program, also known as “HAMP” mortgage modification program guidelines. The bank had all of the necessary documents to review the loan modification application, however, the bank refused to grant a mortgage modification. The referee involved asked the bank to again consider reviewing the homeowner’s HAMP mortgage modification application. The bank again denied the HAMP mortgage modification. They also denied a traditional loan modification claiming the property was not being utilized as the principle place of residence as the owner.

Bank Representative Ordered To Appear In Court

The referee ordered the bank to produce a representative from its servicing organization in court to explain to the judge why they would not grant a mortgage modification. The referee took this action because he felt the homeowners were denied a mortgage modification even though they qualified for one.

The referee wrote a report stating the bank violated his directions which recommended they grant the homeowner a mortgage modification. The bank took the position they were not required to negotiate in good faith. Judge Donald Kurtz disagreed with the bank. He ruled the bank had a duty to negotiate in good faith under New York Civil Practice Law and Rules Section 3408(f). The judge confirmed the referee’s report and stopped all interest which accrued on the mortgage and note from the start of the mandatory foreclosure court conferences going forward.

Conclusion

If you take aggressive action with regard to mortgage modifications in front of judges or referees, you can put pressure on the banks to be cooperative and grant mortgage modifications.

Foreclosure Dismissed for Violation of Statute of Limitations

Foreclosure Dismissed

A family in Mastic, New York has had a foreclosure case dismissed against them for violation by the bank of New York’s six year statute of limitations deadline to file a foreclosure lawsuit. The decision in this case allowed the homeowners to eliminate their mortgage and own their home free and clear.

In the case brought by US Bank National Association, Judge William Rebolini, sitting in the Supreme Court Foreclosure Part in Riverhead, NY, which is located in Suffolk County, stated “the bank’s lawsuits was ‘untimely’.”

The Case

Randy Richmond had co-owned a three bedroom home since 2003. In May 2006, she and another family member refinanced the home and borrowed $250,000. The funds were used on repairs to the home. Due to a family member leaving the home and having two difficult surgeries, Ms. Richmond was unable to make her mortgage payments starting in October 2006. She applied for loan modifications with her two daughters but the lender kept selling the mortgage to other institutions where she was continually turned down for mortgage modifications. Ms. Richmond stated, “it was a run around with every single one of the banks.”

Mortgage Declared Due (Accelerated)

In March 2007, the financial institution holding the mortgage declared the entire mortgage balance due. This started the clock running on New York’s six year statute of limitations.

Case Dismissed

In January 2013, Judge Rebolini dismissed the case after the bank claimed it could not comply with New York’s more stringent court foreclosures rules imposed on financial institutions. Now that the foreclosure lawsuit has been dismissed, the homeowner can bring a lawsuit to have the mortgage lien removed from the title to their property because it is unenforceable.

Dismissing of Foreclosures

The number of foreclosure lawsuits being dismissed in New York under statute of limitations and other grounds is growing. Consumers and their attorneys are becoming more educated and sophisticated as to the techniques involved in successfully defending foreclosure lawsuits.

Mortgage Modifications

If banks seek to avoid having their cases dismissed by sophisticated foreclosure defense lawyers, there is one technique they can use which is often successful. They can simply offer the beleaguered homeowners reasonable, cost efficient, mortgage modifications!

“The Force Returns” – Suing the Mortgage Loan Servicing Company

suing mortgage loan servicing company

The majority of banks and mortgage companies which provide mortgages in the United States have been subcontracting out the servicing of their loans to mortgage loan servicing companies. There is now a new weapon which aggrieved homeowners who have not been properly treated by their banks or mortgage servicing companies can use in defense and as an offensive tactic against mortgage loan servicing companies. In January 2014, the Consumer Finance Protection Bureau (“CFPB”) was established pursuant to the Real Estate Settlement Procedures Act (“RESPA”). It is also established under the Truth in Lending Law. This statute provides consumers with a private right to bring a lawsuit against a mortgage loan servicing company. The basis of the lawsuit by homeowners deals with the failure of the mortgage loan servicing company to properly investigate, underwrite and review the mortgage loan application submitted by the homeowner. In short, the homeowner can sue the mortgage loan servicing company for their failure to do their job properly. This statute provides homeowners with monetary damages of between $500 and $2,000 for each violation made by the mortgage loan servicing company. In addition, the homeowner can ask that the mortgage loan servicing company pay their attorney’s fees and other actual damages they have incurred as a result of the mortgage loan servicing company’s failure to act in good faith and properly underwrite their mortgage modification application.

Errors by Mortgage Loan Servicing Companies

There are numerous errors which mortgage loan servicing companies make. To start with, they fail to properly review the application made by the homeowner. They inaccurately calculate the amount of money due and owing to the financial institution. Sometimes, they don’t properly apprise the homeowner with other mortgage mitigation loss options. There are also a variety of other mistakes, inaccuracies, omissions, miscalculations, and problems which are caused by the mortgage loan servicing companies.

Putting the Servicer on Notice

The statute provides a roadmap with regard to the notification of the servicing company with regard to obtaining information concerning their underwriting processes as well as for making claims against the mortgage servicing companies.

Enhancing the Mortgage Modification Process

My experience is when the mortgage servicing company understands you are aware of your statutory rights under this new statute and you are seeking financial damages and snooping around and investigating their processes, they become a lot more reasonable with regard to offering modifications to mortgages that are realistic and affordable by homeowners.

Elliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the Metropolitan New York area for more than 45 years.

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.