Archives for September 2016

Case Dismissed: Bank Didn’t Provide 90 Day Pre Foreclosure Notice

Person holding an orb with a home inside

A foreclosure legal action was brought by M&T Bank. Dr. Colleen Farrell submitted an answer to the foreclosure lawsuit. In it she claimed she had not been served with the preliminary notice the bank was putting the property into foreclosure required under New York Real Property Actions and Proceedings Law section 1304.

Motion to Dismiss Lawsuit

The bank made a motion for summary judgement and Dr. Farrell opposed the motion and moved to dismiss the bank’s complaint for failure to properly serve a 90 day notice prior to initiating the foreclosure lawsuit. In the application, Farrell claimed the service on his receptionist of the 90 day notice was invalid. He took the position she was not authorized to accept the service of this document. M&T Bank took the position Dr. Farrell was properly served. They claimed it was irrelevant as to whether his receptionist was authorized to accept service. In addition the bank claimed Farrell wasn’t even entitled to a 90 day notice under Real Property Actions and Proceeding Law section 1304. They took this position because the doctors office was not his principal place of residence. The court took into consideration that while Dr. Farrell claimed his receptionist was not authorized to accept service, she did not deny that she had been served. The court ruled whether or not she had authority to accept service was irrelevant since she had been served.

90 Day Pre Foreclosure Notice was Required

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The court ruled however that section 1304 90 day pre foreclosure service requirements applied to Farrell even if he was not living at the premises. Since the bank failed to show strict compliance with the 90 day pre foreclosure notice requirement the court granted Farrell’s cross motion to dismiss the complaint due to the bank not having met its minimum statutory requirements prior to initiating the foreclosure lawsuit.

Reverse Mortgage Foreclosures

A briefcase full of money

Many seniors in New York are facing reverse mortgage foreclosures. These seniors often are at a stage in their life where they are on fixed incomes. If they lose their homes they may end up living in the street!

Unpaid Property Taxes

The failure of seniors to pay their property taxes has been the reason for the recent increase on reverse mortgage foreclosure proceedings. In many cases the homeowner does not know how much is owed in property taxes and homeowners insurance payments. Many of these foreclosures are triggered by outstanding financial obligations by the homeowners of only $10,000.00.

There are many consumer oriented protection statutes which protect homeowners in regular mortgage foreclosures but do not apply to reverse mortgage foreclosures. There are no mandatory foreclosure settlement conferences with regard to reverse mortgages. In addition there is no 90 day notice requirements prior to the initiation of the reverse mortgage foreclosure, as would be required in a traditional bank foreclosure.

Lump Sum Reverse Mortgage Payments

Many of the problems faced by seniors result from their taking lump sum payments on their reverse mortgage and thereafter spending all of the money. A better route is for seniors to receive steady payments over a period of time from the funds from the reverse mortgage. This will enable them to pay for the homeowners insurance on their home and the taxes on their property.

In 2015 New rules went in to effect designed to ensure seniors have the financial ability to repay the tax expenses on their homes.

Conclusion

Under certain circumstances a reverse mortgage is a reasonable option for a senior to take. It allows the senior to utilize the equity in his/her home to support themselves. However it is usually a bad idea for the senior to take all of the funds out of the reverse mortgage in lump sum. Reverse mortgages work properly when the seniors receive periodic payments that allows them to live with dignity and to pay the taxes and homeowners insurance on their homes.

NY Foreclosure Defense Attorney Elliot Schlissel

Elliot S. Schlissel and his associates are foreclosure lawyers representing homeowners throughout the Metropolitan New York area.

Bank Does Not Establish Legal Standing to Bring a Foreclosure Lawsuit

A bank vault

In a case before justice Maryann Brigantti, sitting in a foreclosure part, in Bronx county US bank moved to strike a defendant’s answer. They brought a motion for summary judgement in their foreclosure lawsuit. This type of application urges a court to eliminate the need for a trial in a foreclosure case. They claimed in their motion for summary judgement they produced a copy of the mortgage. In addition they produced a written assignment of the mortgage. They also submitted an affidavit by an individual named Wild. This affidavit asserted the defendants defaulted on the loan and the bank was in physical custody pf the note.

The defendants claimed they never received communication from the bank regarding the foreclosure settlement conferences. They requested to have the case transferred back to the foreclosure mediation settlement conference part.

Challenge to the Bank’s Standing to Sue

The homeowners also claimed the bank did not have legal standing to bring the lawsuit. They claimed that Wild’s affidavit only stated that before the action was commenced the bank was in physical possession of the note the affidavit did not provide factual allegations regarding the physical delivery of the note. The affidavit did not establish that Wild personally inspected the note. Justice Brigantti stated without having further details the bank failed to establish it was the holder of the note before the commencement of the foreclosure lawsuit. Therefore the bank did not sufficiently establish they had standing to bring the foreclosure lawsuit.

Homeowners Resided in the Home

NY Foreclosure Defense Attorney Elliot Schlissel

Justice Brigantti pointed out the homeowners resided in the home. They only missed one court conference and that public policy considerations required the matter to be returned to the foreclosure conference part for the parties to negotiate in good faith to work out a reasonable mortgage modification.

The Dead Borrower Issue

Dead Borrower Issue

In a case pending in Supreme court in Westchester county, justice William Glacomo sitting in a foreclosure part dealt with an unusual issue.  US Bank had brought a foreclosure proceeding. In the foreclosure case they had moved for summary judgement (this is a motion requesting a foreclosure order without the need for trial).  They claimed Eisman, who is now deceased did not make his mortgage payments.  An estate was formed for the decedent Eisman. The executor of the estate argued the estate didn’t receive the appropriate notice the home was going into foreclosure under the Real Property Actions and Proceedings Law section 1304.  This section requires a financial institution to give 90 days notice to a homeowner prior to initiating the foreclosure lawsuit.

90 Day Notice Required

Justice William Giacomo found the 90 day notice required under Real Property Actions and Proceedings Law section 1304, only applied to living persons not to estates.  Because Eisman was dead he did not have to be served at the cemetery and the executor of the estate also did not have to be served.

Judge Giacomo’s rational was since the borrower was dead, there was no longer a notice requirement which needed to be given to this borrower. He therefore held that Real Property Actions and Proceedings Law section 1304 no longer applied.

The Estate Issue

When someone dies an estate is created, the executor if there is a will and the administrator, if there is no will, stands, in the shoes of the decedent.  If an obligation was owed to decedent to provide 90 days notice prior to initiating a foreclosure lawsuit, why shouldn’t this also apply to the estate of the decedent?  I believe this issue should be taken up on appeal.

Elliot S Schlissel and his associates are foreclosure lawyers who defend homeowners in the Metropolitan New York area.

NY Foreclosure Defense Attorney Elliot Schlissel

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

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