Archives for September 2013

Foreclosure Abuse

September 30, 2013 by Elliot S. Schlissel

The fifty states and the federal government sued the largest five banks in the United States in 2012. The lawsuit dealt with numerous improper practices, foreclosure abuses, and failures by these institutions to deal with consumers in a fair and reasonable manner. Unfortunately, even though this lawsuit has been settled, foreclosure abuses still continue.

Lisa Madigan, the Attorney General for the State of Illinois, has recently brought another lawsuit against large financial institutions related to continuing foreclosure abuses that were supposed to have been eliminated by the prior lawsuit.

Property Management Company Abuses

Banks hire property management companies to maintain homes that have been left vacant by the homeowners. These property management companies first have to determine whether the home has been abandoned.

The largest property management company is called Safe Guard. The lawsuit brought by the Attorney General of Illinois claims Safe Guard breaks into homes which are occupied. When they break into homes they cause extensive damages and they improperly remove personal property. They also change the locks. They contact the utility companies and turn off the utilities. In addition, Attorney General Lisa Madigan claims, in her lawsuit, they force occupants into leaving their homes even though they have the legal right to stay. There are economic reasons for these property management companies acting improperly. It turns out the property management companies make more money taking care of vacant homes than dealing with homes that have not been abandoned. The reason for this is vacant homes that have been abandoned, by their homeowners, require more supervision. They need to be boarded up, locks need to be changed, the grass needs to be cut, the homes need to be secured against vagrants moving in, and they need to be looked after on a regular basis.

Illegal Eviction

Eviction involves a legal proceeding where a homeowner takes action through a court to remove a tenant. Even if a bank obtains title to a house in a foreclosure lawsuit it cannot send some men to the house to use strong arm tactics to force the homeowner to leave. The bank, if they want to obtain occupancy of the house, has to bring a landlord/tenant proceeding in a landlord/tenant court. Tenants have rights!

Banks must observe the rights of the occupants of homes. Even after a bank takes title to a home in a foreclosure case the former homeowner becomes a tenant and is subject to all types of tenants rights. Banks must observe these rights!

Elliot S. Schlissel is a foreclosure attorney. For more than 45 years he has represented homeowners in disputes with financial institutions. His office litigates matters against banks and other financial institutions throughout the metropolitan New York area.

Filed Under: Foreclosure, Foreclosure Defense

Refinancing Your Home

September 27, 2013 by Elliot S. Schlissel

The refinancing of a home involves the obtaining of a new mortgage to pay off an old mortgage. This is usually undertaken when you can secure better terms or a lower interest rate on the new mortgage. If you have built up equity in your home, you can refinance your home to pull some of the cash out. This can be done through a home equity loan or obtaining a line of credit to get cash out of the equity you have built up in your home. These funds can be used for home improvements, paying off credit card debts, funding college education for your children, and for other reasons.

Should You Refinance?

There are pros and cons for refinancing. You may get a better deal and lower interest rates, however, refinancing can destroy the equity you have built up in your home and create a new longer burden with regard to your mortgage payments. On the plus side, if you can refinance for a lower monthly interest rate, and minimize your closing costs, you may be able to put yourself in a better financial position on a month to month basis. Care should be taken upon refinancing to consider the long term impact on your life situation of undertaking this new indebtedness.

Elliot S. Schlissel and his associates are foreclosure defense attorneys. They have been assisting their clients regarding foreclosure and mortgage issues for more than 45 years.

Mortgage Servicing Agencies’ Failure to Perform Their Duties

September 26, 2013 by Elliot S. Schlissel

The Consumer Financial Protection Bureau is the new agency that is supposed to regulate mortgage servicing companies. In a recent review of mortgage servicing companies this agency found some services to be “sloppy” when dealing with transferring paperwork when loans are sold. They also found misapplication of payments on mortgages and the failure of mortgage servicing companies to pay the taxes on the homeowners’ homes on a timely basis.

Homeowners Don’t Know Whom They Are Supposed To Pay

When the average homeowner purchases his or her home they take out a mortgage. Often shortly after they take out their mortgage the mortgage is sold by one lender to another. The second lender thereupon hires a mortgage servicing company to service the loan. Sometimes, a few months later, the second lender sells the mortgage to a third lender. This leaves the homeowner unsure of where, and to whom, they should pay their mortgage. This causes consumers consternation as to whether they are making their payments to the correct entity and if they are receiving the full credit for their payments.

Consumers Financially Injured By Mortgage Servicing Companies

Tax payments on real estate are usually due and owing in December. There have been mortgage servicing companies that have delayed making these payments until January. When a mortgage servicing company pays the taxes in the following year, the homeowner loses the important tax deduction for the mortgage payment in the prior year. This causes the homeowner to pay higher income taxes due to the loss of this tax deduction.

The Consumer Financial Protection Bureau has set up a new mandated set of rules financial servicing companies must comply with. These rules go in effect in January of 2014. The purpose of these rules is to deal with issues that have come up during the mortgage loan modification process which have been exposed under the HAMP program. The following are a list of some of the problems that have been uncovered by this agency concerning mortgage services:

Abnormally long application processes.
The lack of quality control standards and the supervising of underwriters.
The failure to send out denial notices to homeowners.
The failure to have written policies and procedures related to mortgages.
Disorganization and understaffing by mortgage servicing companies.

Mortgage Modifications

Many homeowners have been living with the panacea that they can obtain a mortgage modification for their home under the HAMP program only to find out that only a small number of the applicants get final approval of mortgage modifications. Hopefully this agency will deal with the numerous problems that exist today.

Elliot S. Schlissel, Esq. is a foreclosure attorney who has published more than fifty (50) articles related to foreclosure defense.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings

Wells Fargo Sanctioned By Court For Bad Foreclosure Practices

September 20, 2013 by Elliot S. Schlissel

Justice Yvonne Lewis, sitting in Supreme Court in Kings County recently sanctioned Wells Fargo for “wantonly flagrant” bad faith involved in a residential foreclosure lawsuit. Justice Lewis in her decision stated that Wells Fargo had repeatedly frustrated the efforts by two brothers, Francis Ruggiero and Michael Ruggiero to obtain a mortgage modification. They continually demanded more and more financial information.

The Ruggiero brothers owned a home in East New York. They refinanced their home in 2006 with Wells Fargo. They fell behind in their mortgage in 2007. In May of 2007, Wells Fargo initiated a foreclosure action against them.

Court Settlement Conference

At a court settlement conference, the parties agreed to a three month trial mortgage modification. The Ruggerio’s made the first payment under the modification and then missed the next two. At subsequent settlement conferences, the Ruggerio’s claimed they had not been given a trial mortgage modification. Wells Fargo claimed they needed more information for a final determination on their mortgage modification for the Ruggerio’s. Wells Fargo, at the foreclosure conference, requested the Ruggiero’s make further payments under the temporary mortgage modification. However, every time the Ruggerio’s made the payments, they were rejected by Wells Fargo.

In the end, Wells Fargo denied the mortgage modification application. However they offered to modify the mortgage for $2,672.70 per month. This was $600 a month more than the amount under the trial modification by Wells Fargo.

There were further additional settlement conferences before the court. The Ruggiero’s submitted a further package of financial information to Wells Fargo but Wells Fargo took no action concerning this new information. Eventually, Wells Fargo said it would not offer a loan modification, but would reconsider if the Ruggiero’s again submitted a financial package. In the end Wells Fargo never approved a mortgage modification for the Ruggiero’s.

Lack Of Good Faith By Wells Fargo

Judge Lewis in her ruling stated the case is “replete with pervasive indicia of the plaintiffs lack of good faith, evidenced by conflicting information, a refusal to honor agreements, unexcused delays, unexplained charges and misrepresentations and sets forth, in no small measure, a failure to deal honestly, fairly and openly.” The Judge went on to state, “more to the point, it is irrefutable on the proof adduced that the defendants, despite being subjected to ten to twelve arbitrary submissions, successfully established their occupancy of the subject premises, successfully completed the plaintiff’s trial HAMP period, and submitted all required documentation in order to accord themselves a modified loan agreement in the amount of $2,061.50 which the plaintiff in turn, arbitrarily and capriciously increased by $611.20 under false pretenses without any justifiable basis, and ingenuously denied.”

Justice Lewis went on to state that the monetary penalty’s she was imposing on Wells Fargo was necessary because of Wells Fargo failure to comply with the HAMP program.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, mortgage modification, mortgage modification attorneys, mortgage modification denied, mortgage modification denied new york, Mortgage Modifications attorney

City Seeks To Save Homes Through Eminent Domain

September 18, 2013 by Elliot S. Schlissel

The City of Richmond, California has come up with a unique plan. The city sent notices to the institutions holding more than 600 underwater mortgages. The city asked these institutions to sell the mortgages to the city. The city offered to buy the mortgages for 80% of the fair market value of the homes. The City intended on writing down the mortgages for the purpose of helping the homeowners refinance their properties.

Investment Group Brings Lawsuit To Stop The City

An investment group filed a lawsuit in a Federal Court in California. They seek to prevent the City from using Eminent Domain to seize mortgages of local residents who owe more than the value of their property. The investment group claimed “the purpose of the lawsuit is to protect retirees and save them from an unlawful and unconstitutional seizure of private property and to prevent severe damage to the country’s home mortgage market.” The investment group requested the court stop Richmond, California from moving forward with its program and to declare its plan to seize mortgages as being unconstitutional. The City of Richmond claimed the lawsuit is without merit and their plan is appropriate.

Since the case is in its infancy, we’ll see how things work out in the future. However if the city is willing to seize its resident’s underwater mortgages, make a deal with the institutions holding those mortgages to pay them a fair amount for the mortgages and thereafter the homeowner’s refinance their homes for a lesser amount, it looks like a win-win situation for all parties involved.

Foreclosure Defense Lawyer

Elliot S. Schlissel, Esq. is a prominent foreclosure lawyer representing homeowner’s against financial institutions throughout the metropolitan New York area. Elliot and his associates aggressively litigate foreclosure lawsuits and assist their clients in obtaining mortgage modifications.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure attorney, foreclosure defense, mortgage modification, mortgage modification attorneys, Mortgage Modification new york attorney

Foreclosure Lawsuit Dismissed

September 16, 2013 by Elliot S. Schlissel

In a recent case, Justice François Rivera sitting in the Supreme Court Foreclosure Part in Bronx County dismissed a foreclosure lawsuit brought by HSBC Bank as Trustee. In this case, HSBC claimed the homeowner had two mortgages on the property. Both mortgages were combined by a consolidation agreement. HSBC claimed the homeowner’s defaulted by not paying the mortgages. HSBC stated the mortgages were assigned by an Affidavit of Lost Assignment.

HSBC Seeks The Appointment Of A Referee To Sell The Property

HSBC brought an application to the Court. They sought to change the caption of the proceeding from the then current defendant, Brunson, and replacing her name with the co-administrators of her estate. It turns out that Brunson died two years before the action was commenced by HSBC. Simply speaking, HSBC sued the homeowner two years after the homeowner died. Judge Rivera took the position the entire lawsuit was a nullity from its very start. The application by HSBC to modify the caption could not be granted. The court’s decision was that the court didn’t have jurisdiction to even entertain the motion made by HSBC.

Conclusion

Banks shouldn’t sue dead people. Banks can only sue the Estate or the Administrators or Executors of an estate after someone dies.

About The Author

Elliot S. Schlissel, Esq. and his associates diligently and aggressively represent homeowners in mortgage foreclosure lawsuits. Elliot and his associates provide foreclosure legal defense in the courts throughout the metropolitan New York area.

Foreclosure Dismissed: No 90 Day Notice

September 9, 2013 by Elliot S. Schlissel

Justice Yvonne Lewis, sitting in the Supreme Court of Kings County, recently dismissed a foreclosure proceeding brought by LaSalle Bank. LaSalle Bank brought a proceeding to foreclosure on a mortgage against Deanne Legier and Joyce Legier. The bank claimed both of the defendants had been served with legal process (a summons and complaint) at the real property’s address in Brooklyn. Deanne claimed she had never been served with the Summons and Complaint. She alleged that she did not reside at the address where the Summons and Complaint was served. Although Joyce was served, Joyce did not give Deanne a copy of the Summons and Complaint.

The Court, in its decision, found New York Real Property Actions and Proceedings Law section 1304 contained a requirement that a lender must comply with prior to bringing a foreclosure proceeding. This section of law required a lender to give a borrower 90 days’ notice before bringing a foreclosure proceeding on what was called a non-traditional mortgage.

Judge Lewis found that LaSalle Bank failed to show it provided the defendant’s with a Notice of Default before demanding payment in full on the underlying mortgage loan. Judge Lewis’ decision stated LaSalle Bank did not “unequivocally show compliance with section 1304 of the New York Real Property Actions and Proceedings Law.” They merely stated in their paperwork Joyce Legier failed to raise a triable issue of fact in a Summary Judgment Motion. The Judge, in her decision, stated LaSalle Bank had to comply with a condition precedent prior to bringing its lawsuit or making a Summary Judgment motion. She dismissed the foreclosure proceeding! Banks must fully comply with statutory compliance before initiating foreclosure lawsuits.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure attorney, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, New York foreclosure defense lawyers

Part III: Bank Of America Had Been Sued For Improperly Handling Mortgage Modifications Before

September 6, 2013 by Elliot S. Schlissel

In 2012, Bank of America settled a lawsuit brought by a former employee of a contractor who worked with the bank. This employee had accused Bank of America of mishandling HAMP applications. The Bank has also settled two major Federal lawsuits related to improper foreclosures practices.

Consolidation of Lawsuits

The pending lawsuit against Bank of America is part of a consolidation of 29 separate suits brought against the bank. The lawsuits come from across the country and have been certified as a class action. The lawsuit deals with homeowners who received trial modifications, and made all of their payments on a timely basis. However these homeowners did not receive timely responses from the bank as to whether they would be given a permanent mortgage modification. Pursuant to the HAMP program, the initial trial period was supposed to last for three months. However with Bank of America, it often lasted much longer. The problem was that Bank of America, as well as other banks, refused to properly fund their mortgage servicing operations under the HAMP program. Unfortunately there was not sufficient government oversight of these programs to pick up these problems right away.

It is estimated there are 800,000 mortgages that would have qualified for HAMP mortgage modifications if Bank of America and other large financial institutions had properly funded the HAMP program and supervised the program in the manner in which it was intended. This program was intended to help homeowners during the mortgage crisis in America. Unfortunately, since it was a voluntary program that was underfunded, it did not accomplish its goal!

The Purpose Of The HAMP Program

The purpose of the HAMP program was for the government to give cash incentives to financial institutions to modify home mortgages pursuant to specific standards. This was supposed to provide a streamlined process to help the 4 million homeowners having difficulties in the United States. Instead of accomplishing its goal, Bank of America utilized this program as a means, pursuant to statements of former employees, to obtain as much money as possible from the struggling homeowners and then foreclose their homes. Under the program, buyers were supposed to make trial payments for three months. However in many instances, the trial payments lasted for as long as a year and sometimes even longer. After making as much as a year or more of trial payments, instead of the mortgage modification becoming permanent, the homeowners were denied mortgage modifications. To make matters worse, they then found they owed the difference between the amount of the payments under the trial modification and their original mortgage payments. The Bank of America employees, in statements they had given stated that many of them were given no training whatsoever with regard to the requirement of the HAMP program.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, mortgage modification, mortgage modification denial, Mortgage Modification new york attorney

Part II: Other Financial Institutions Deny Mortgage Modifications For Fictitious Reasons

September 4, 2013 by Elliot S. Schlissel

Chris Wyatt, who had previously worked for Goldman Sacks subsidiary, Litton Loan Servicing, claimed the company occasionally conducted “denial sweeps.” The purpose of the denial sweep was to reduce the backlog of pending applications for mortgage modifications. In these cases, the mortgage modifications were also denied for fictitious reasons.

The Bank of America employees claimed their supervisors encouraged them to provide false information to homeowners. Simone Gordon stated “we were told to lie to customers and claim that Bank Of America had not received documents it had requested.” “We were told that admitting that the bank received documents would open a can of worms.” She claimed the problem that would occur is that the bank would look to be deficient in its underwriting of mortgage modifications.

These mortgage modification applications were supposed to be underwritten within 30 days. The Bank did not have the appropriate staffing to handle the volume of modifications. It was simply easier to just deny them and make up a reason. Simone Gordon worked for Bank of America from 2007 to 2012 as a senior collector. Simone further advised the court that homeowners who were anxious to find out the status of their mortgage modification applications were told their applications were “under review.” They were told this even though nothing had been done for many months with regard to the processing of their applications. In some situations, the homeowners were told their mortgage modification applications were under review when they had already been denied.

Employee’s Rewarded For Denying Mortgages

Simone Gordon’s affidavit states the employees of Bank of America were rewarded when they denied applications and sent the homeowner’s homes to be foreclosed upon. She stated that collectors “who placed ten or more accounts into foreclosure in a given month received a $500 bonus.” There were additional incentives given to employees. They received gift cards to retail stores and restaurants.

Filed Under: Bankruptcy, Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure defense, foreclosure defense lawyers, foreclosure related bankruptciy, mortgage modification, mortgage modification attorneys, mortgage modification denial, mortgage modification denied new york, Mortgage Modifications attorney

Part I: Bank of America Employees Lied To Homeowners

September 2, 2013 by Elliot S. Schlissel

In a lawsuit filed against Bank of America, six former Bank of America employees and one outside contractor working for Bank of America, filed affidavits with the court, claiming they regularly lied to homeowner’s seeking mortgage loan modifications. The mortgage modifications were denied for made up reasons. These employees were rewarded for denying mortgage modifications and putting the homes into foreclosure. The lawsuit is pending in a United States District Court in Boston, Massachusetts. It is part of a class action brought on behalf of homeowner’s who were trying to avoid foreclosures on their homes pursuant to the governments Home Affordable Modification Program (HAMP).

Bank Of America Denies The Allegations

Bank of America has given a statement through a spokesperson. The statement indicated the affidavits of the employees were “rife with factual inconsistencies.” Bank of America claims to have modified more loans than any other bank in the country.

William Wilson, Jr., who worked as an underwriter for Bank of America and as a manager between the years 2010 and 2012 stated homeowners had to submit documentation of financial information with their mortgage modification applications. Wilson stated that twice a month, the bank required all files that were more than 60 days old had to be denied. This was called “a blitz.” During this period, one team would deny between 600 and 1500 mortgage modification applications all at the same time.

The manner in which the employees justified the turning down of these mortgages was to create fictitious reasons for these mortgage denials. The most common fictitious reason for denying the mortgage was claiming the homeowner had not sent in the appropriate financial documents requested by Bank of America. The Bank of America employees claimed these financial documents were not sent in when the documents were right in front of them!

Erica Brown, a former Bank of America employee, has made statements indicating “Bank of America’s practice was to string homeowners along with no apparent intention of providing the permanent loan modification it promises.” Bank of America and its executives should be subject to criminal investigations with regard to their actions under the HAMP program.

Filed Under: Bankruptcy, Foreclosure Defense, Mortgage Modification Tagged With: Bankruptcy mortgage modification, defective mortgages, mortgage modification, mortgage modification attorneys, mortgage modification denial, mortgage modification denied new york

Archives for September 2013

Foreclosure Abuse

Refinancing Your Home

Mortgage Servicing Agencies’ Failure to Perform Their Duties

Wells Fargo Sanctioned By Court For Bad Foreclosure Practices

City Seeks To Save Homes Through Eminent Domain

Foreclosure Lawsuit Dismissed

Foreclosure Dismissed: No 90 Day Notice

Part III: Bank Of America Had Been Sued For Improperly Handling Mortgage Modifications Before

Part I: Bank of America Employees Lied To Homeowners

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