Archives for November 2013

How Good Does Your Credit Score Have To Be To Obtain a Low Interest Rate Mortgage?

November 29, 2013 by Elliot S. Schlissel

If you are in the market to buy a new home or an existing home, one of the most important issues is whether you can afford the mortgage payments. But before you can consider whether you can make your mortgage payments, you need to obtain the mortgage. Credit scores are the most important factor financial institutions look into with regard to underwriting mortgage loans. Today it is recommended individuals applying for a mortgage have a credit score of 740 or above. Credit scores are based on a total potential perfect credit score of 850 points. The 740 credit score that is requested by financial institutions today is among the highest asked by banks at any point in time. Pursuant to www.zillow.com, a mortgage information company, approximately 40% of Americans have credit scores high enough to obtain the best possible mortgages.

Mortgage Rejection Rate

There is currently a 30% rejection rate by financial institutions for those individuals applying for a mortgage. When you take into consideration the housing market has been improving in the United States, and foreclosure rates have been going down in most metropolitan areas, a 30% rejection rate is very high.

So what do you do if you do not have a 740 or above credit score? You can still obtain a mortgage. However, you will most likely have to pay a higher interest rate for the mortgage.

Credit Reports

Before going into the housing market to look for a home to purchase you should check your credit score. You can obtain a copy of your credit report on the internet. Carefully look at your credit report to determine if all the material on your report is accurate. If there are inaccuracies in your credit report contact the credit reporting agency in writing to correct these inaccuracies. Your credit report will also show you the balances on credit lines, personal loans, and credit cards. It will be helpful to bring the balances on your indebtedness down prior to submitting a mortgage application. Banks take into consideration all of your overall debt when they underwrite a mortgage.

Elliot S. Schlissel is a foreclosure attorney with extensive experience in representing clients regarding foreclosure lawsuits, mortgage modifications and fraudulent mortgage practices of banks. His goal is to help clients stay in their homes.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, defective mortgages, financial crisis, foreclosure, foreclosure attorney, foreclosure crisis, foreclosure defense, mortgage modifications, predatory lending

Mortgage Terms – Part II

November 27, 2013 by Elliot S. Schlissel

Differences Between the Note and Mortgage

A note is signed by the person obligated to make the payments pursuant to the terms of the contract of the promissory note. The person who is obligated to make the payments is not necessarily the same person that owns the property. In some situations a guarantor or other individual who has better credit than the homeowner is required to be on the note. In some transactions where there are two people involved, whether it is a husband and wife or just two individuals are the owners of property, whose names are on the deed and one of those individuals has bad credit only the individual with good credit may be on the note.

A mortgage is a document that is signed by the individuals who own the property. In the large majority of situations, the homeowners execute both the note and the mortgage. However, this is not always the case. Where corporations are involved, the corporate entity that owns the property will usually sign the mortgage. However, the principals of the corporate entity will execute the note.

Mortgages are Recorded

A mortgage needs to be recorded in the county seat of the county where the property is located. The recording of the mortgage creates a record for all those individuals making inquiry as to whether the home is owned free and clear of financial impediments and to ascertain who the lender is.

Elliot S. Schlissel, Esq., is a foreclosure attorney representing individuals throughout the metropolitan New York area whose homes are threatened with foreclosure or in foreclosure. He strives to keep his clients in their homes by litigating the foreclosure proceedings asserting technical defenses and assisting his clients in obtaining mortgage modifications.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure attorney, mortgage, mortgage modification, Mortgage Modifications attorney, mortgage payments, New York foreclosure attorney

Mortgage Terms – Part I

November 25, 2013 by Elliot S. Schlissel

Most homeowners in the State of New York hire an attorney to represent them when buying or selling a house. The attorney handles the paperwork, deals with the bank lawyer, and the other parties’ attorney. Unfortunately when homeowners fall behind on their mortgage payments, the banks bring foreclosure lawsuits against them. Homeowners will sometimes research their rights on the internet to determine whether they have viable defenses to their foreclosure proceedings. When reviewing the terms of either a summons and complaint in foreclosure or with regard to the financing of a home through a financial institution, at the time of purchase, it is important to know actually what the specific terms utilized by financial institutions mean.

The Note

The loan document or note refers to a promissory note given by the borrower to the lender. The promissory note creates a contract wherein the borrower agrees to pay a certain amount of money to the financial institution pursuant to specific terms. With regard to notes involved in real estate transactions, the length of the repayment obligation is usually 15 or 30 years. The interest rate on the financial obligation determines how much the borrower will have to pay the financial institution each month. In addition to repaying the interest and principal on the loan, taxes and insurance on the residence are usually added to the monthly payment costs.

A simplified way to look at the promissory note is that it is basically an “IOU”. The note actually does not specifically relate to the property involved. It exists on its own as a financial obligation between the borrower and the financial institution. If the borrower does not make timely payments pursuant to the terms of the promissory note the lender can sue the borrower on the note for breach of contract.

The Mortgage

Let’s start with what a mortgage is not. A mortgage is not a “promise” to pay the loan on the property. The mortgage is not any type of promise. The mortgage is attached to the property by the debt created by the note. The mortgage contains language similar to a deed that gives the lender the right to take the property back if the borrower does not make the timely payments pursuant to the promissory note. In effect the mortgage attaches the note to the property and gives the lender a remedy to sell the property in the event the terms of the promissory note are not adhered to by the borrower.

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

Issue of Standing in Foreclosure Lawsuit is Waived By Failure to Plead It In The Defendant’s Answer

November 22, 2013 by Elliot S. Schlissel

Columbia Capital had loaned Mr. Cuervo $130,000. They had received a mortgage against real estate owned by Mr. Cuervo as security for this loan. Mr. Cuervo had executed a note and a mortgage to Columbia Capital at the time of the closing on the purchase of the property.

Summary Judgment Motion

Columbia had made an application for summary judgment. Their application was based on their cause of action for foreclosure. (A summary judgment motion sought to have the court render a decision there was no question of fact that the plaintiff, in this case, was entitled to a judgment based on their allegations and no trial was necessary). In their summary judgment application Columbia asked the court to strike all of the affirmative defenses made by the defendant.

Columbia Claims Mortgage is in Arrears

Columbia claimed that Mr. Cuervo did not make his mortgage payments pursuant to the note and mortgage and that they were entitled to summary judgment because there were no issues of fact in the case. The opposition papers submitted by Mr. Cuervo’s attorney alleged Columbia did not have standing to bring this lawsuit. (Lack of standing means Columbia was not the appropriate party to move forward with this foreclosure lawsuit).

Justice Peter Mayer sitting in the Supreme Court in Suffolk County held the opposition submitted by Cuervo’s attorney did not raise any questions of fact. It did not rebut Columbia’s prima facie showing of entitlement to summary judgment. Judge Mayer went on to state the failure to raise as an affirmative defense the issue of standing by Mr. Cuervo’s attorney acted as a waiver concerning this potential defense to the lawsuit. In other words, since Cuervo didn’t plead a lack of standing, the Court would not hear arguments as to whether there actually was a lack of standing for Columbia to bring this foreclosure proceeding.

Columbia’s application for summary judgment was granted by Judge Mayer.

Conclusion

Defense counsel should allege a lack of standing in all foreclosure lawsuits. At the time the answer is submitted by the defendant, the defendant is usually not in a position to know whether the plaintiff has standing. These issues are clarified during the discovery process of the lawsuit.

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

Federal Government Seeks $863 Million from Bank of America For Defective Mortgages

November 20, 2013 by Elliot S. Schlissel

The United States government has gone into the Federal District Court in New York City requesting Bank of America pay $863.6 million dollars in monetary damages related to fraudulent activities concerning defective mortgages which were sold by Countrywide Financial Services in 2008. It is claimed Bank of America defrauded Fannie Mae and Freddie Mac, government controlled mortgage companies, with regard to the sale of loans purchased from Countrywide in 2007 and 2008. These mortgage loans generated $1 billion dollars in losses.

The Hustle

The case filed in United States District Court in Manhattan claims Countrywide operated a program called high speed swim lane or HSSL, nicknamed the “Hustle”. The Hustle program was set up to provide financial incentive for employees to make as many loans as possible. The program eliminated many underwriting requirements to ensure loans met minimum standards. The government’s position is penalties are necessary “to send a clear and unambiguous message that mortgage fraud for profit will not be tolerated” stated Judge Jed S. Rakoff, who presided over the trial in this matter. The amount of the penalties requested is based on the losses Fannie Mae and Freddie Mac incurred.

Elliot Schlissel, Esq. is a foreclosure attorney representing homeowners concerning mortgage modifications and foreclosure litigation.

US Bank and Wells Fargo Violate Duty to Negotiate in Good Faith at Mandatory Foreclosure Settlement Conference

November 19, 2013 by Elliot S. Schlissel

Justice Robert Torres, sitting in Supreme Court in Bronx County, recently ruled US Bank and Wells Fargo were barred from collecting any interest, unpaid late fees or attorney’s fees until a homeowner was given an appropriate review and determination of his mortgage modification application. A foreclosure action was brought against a homeowner named Rodriguez in Bronx County.

Rodriguez brought an application to find that US Bank and the loan servicer on this mortgage, Wells Fargo Bank, had violated their duties and obligations under the HAMP guidelines to negotiate in good faith at a foreclosure settlement conference. Rodriguez took the position Wells Fargo mishandled and misapplied the HAMP guideline with regard to his application for a mortgage modification. He further argued both US Bank and the loan servicer, Wells Fargo, had failed to act in good faith as required by financial institutions under the HAMP program.

Court Rules Against the Banks

Justice Torres found that Rodriguez had provided sufficient documentation to his allegations concerning the violation of the good faith requirement by the financial institutions at the settlement conference. His decision stated in this foreclosure proceeding, the financial institutions did not follow HAMP guidelines such as violating section 3408(f) regarding the duty to proceed in good faith. The Court took into consideration the presentation by Rodriguez’s representative that Wells Fargo did not explain why they refused to evaluate him under Tier 1 and Tier 2 programs. Under the HAMP guidelines a loan servicer must evaluate the homeowner pursuant to these guidelines. Judge Torres’ ruling stated Wells Fargo had not complied with the current HAMP directive and failed to work towards a loan modification in good faith.

Conclusion

Financial institutions must cooperate and work with homeowners and evaluate mortgage modification applications pursuant to the HAMP guidelines.

Elliot S. Schlissel is a foreclosure attorney representing homeowners in foreclosure lawsuits. His office seeks to keep their clients in their homes by helping them obtain mortgage modifications and by challenging the foreclosure lawsuits brought by financial institutions, and countersuing them for violating federal and state laws.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: Bankruptcy mortgage modification, defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, mortgage modification attorneys

The Foreclosure Process in New York

November 18, 2013 by Elliot S. Schlissel

The foreclosure process in New York is much more complicated than most homeowners understand it to be. It is a process that involves a number of steps to complete. The purpose of this article is to inform homeowners about the foreclosure process and the options homeowners have to stop foreclosures from moving forward.

Time Frames for Foreclosure

The foreclosure process in New York can be discussed with regard to two types of time frames. If the homeowner ignores the Summons and Complaint, takes no legal action and does not hire an attorney to defend them, the process can take approximately 18 months and depending on how aggressive the financial institution is, even longer. However, if the homeowner hires an attorney, files a formal Answer, contests the proceedings, engages in the discovery process and opposes a summary judgment motion, the foreclosure process can be extended to 3 years or more.

Missing Mortgage Payments

In the event you are unable to make your mortgage payments on a timely basis, the best means of dealing with the situation is to notify your financial institution. Many of the lenders in New York are willing to work out payment plans during financial hardship situations for homeowners. You can apply for a mortgage modification or a forbearance agreement. In the event you realize you will not be able to make your mortgage payments over the long run, it is necessary to hire a foreclosure attorney to represent you in the foreclosure proceeding that will be forthcoming.

Banks do not, in New York State, take action to initiate foreclosure proceedings until the homeowner is a minimum of 3 months behind in their mortgage payments. Some banks will wait as long as 6 to 9 months before they will consider taking legal action. If there are problems with the paperwork, issues involving assignments, robo-signers, violations of truth in lending or New York State laws, the banks may wait years before they initiate a foreclosure proceeding.

Pre-Foreclosure Notice

In New York State a lender must notify the homeowner in writing 90 days before beginning legal proceedings. This pre-foreclosure notice advises the homeowner the bank is accelerating the mortgage. This means the bank is calling the entire amount of the mortgage due and owing. Once the mortgage is accelerated, if the homeowner makes a mortgage payment, the banks will usually reject the payment and demand the entire mortgage be paid in a lump sum.

Foreclosure Legal Proceeding

The foreclosure process is started by the attorney for the financial institution drafting a summons and complaint, filing the summons and complaint, and hiring a process server to serve the summons and complaint on you. If the summons and complaint is served on you personally, you have 20 days to hire an attorney and submit a formal written answer. If it is served on you in any other manner other than through personal delivery, you have 30 days to respond by submitting a written Answer to the summons and complaint.

Mortgage Modification

Some homeowners have the mistaken idea that submitting a mortgage modification application acts as a response to the summons and complaint. This is not true. If served with a summons and complaint in a foreclosure, you need to submit a written answer admitting or denying the allegations in the complaint alleging affirmative defenses and possibly countersuing the bank.

End of Foreclosure Proceeding

A foreclosure proceeding ends by the sale of the home by a referee in an auction type sale. Don’t wait for this to happen. Hire a competent foreclosure defense lawyer to represent you if you want to stay in your home!

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, mortgage modification attorneys, mortgage modifications, New York foreclosure attorney

Losing Your Home

November 15, 2013 by Elliot S. Schlissel

When you have financial problems it can turn your life upside down. Financial problems cause anxiety and stress. One of the worst and most problematic financial problems is when you cannot make your mortgage payments. Failing to make mortgage payments over a period of 3 months or more can result in the financial institution that holds the mortgage on your home bringing a foreclosure lawsuit. Foreclosure is the bringing of a lawsuit for purposes of the financial institution reclaiming the ownership of the home. In the end, if the financial institution is successful in the foreclosure proceeding, they can evict the homeowners from their home.

Under Water Homes

Many homeowners bought their homes in the years 2002 through 2008 when home prices were rising. Many of the homes facing foreclosure today are worth less than the amount of money due and owing on the mortgages.

Fighting Foreclosure Lawsuits

A foreclosure lawsuit is initiated by the attorneys for the bank filing, in the County Clerk’s office in the County where the home is located, a Summons and Complaint in Foreclosure. Simultaneously with filing the Summons and Complaint in the County Clerk’s Office, the financial institution also files a Lis Penden which notifies anyone who conducts a title search the house is now involved in a foreclosure lawsuit. After the summons and complaint is filed with the county clerk’s office, the attorney for the financial institution hires a process server who serves the summons and complaint on the homeowners. The summons and complaint can be served personally on the homeowners, by nailing it to the door and mailing it to them, and/or by serving a person of suitable age and discretion at the homeowners residence or principal place of business. So, what do you do if you are served with a summons and complaint?

Foreclosure Defense Lawyers

There are attorneys who have extensive experience in litigating foreclosure lawsuits. Foreclosure lawyers can explain the process to you. They can investigate and see whether the financial institution that is suing you actually has the right to sue you. They can look into whether Truth in Lending Laws were complied with. They can investigate as to whether New York Laws concerning the assignment of mortgages and the execution of affidavits related to the foreclosure lawsuit have been properly undertaken. Homeowners are consumers and there are consumer protection laws in the State of New York and Federal Laws that protect homeowners from unfair practices by financial institutions.

Mortgage Modification

Many homeowners apply for mortgage modifications get rejected and assume that there is nothing that can be done. That is not correct. The first stage of a foreclosure lawsuit is the attendance by the financial institution and the attorney for the homeowner at a foreclosure court conference. At this time, pressure can be brought on the financial institution of cooperate and to act in good with regard to the underwriting of a mortgage modification application. Even if the homeowner has been turned down in the past, the homeowner can file a new mortgage modification at no cost as part of this process.

Procedural Defenses

There are a number of procedural defenses that can be raised in a foreclosure lawsuit by a sophisticated foreclosure defense lawyer. The writer understands that the homeowner actually received the money and purchased the house. This does not prevent the homeowners from protecting their legal rights under Federal and State consumer protection laws with regard to unfair banking procedures, fraudulent foreclosure practices and being defrauded regarding misleading documents.

Conclusion

Don’t despair. If your home goes into foreclosure, hire the right lawyer and you may be able to stay in your home longterm!

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

New York’s Backlog of Foreclosure Cases

November 7, 2013 by Elliot S. Schlissel

The foreclosure process in New York, even under optimum circumstances, can take as long as three years. New York has enacted legislation regarding the robo-signing scandal that was uncovered in 2010. There are new court imposed rules affecting attorneys representing banks that seek to bring foreclosure lawsuits.

New Foreclosure Requirements

The attorneys for financial institutions must prepare an affidavit or swear under penalties of perjury that the foreclosure documents being submitted are accurate. Consternation by lender’s attorneys with regard to the accuracy of notes, mortgages and assignments of mortgages have caused delays as long as two years in the New York foreclosure process.

Lenders themselves must verify, when a foreclosure action is initiated, that the lender has the right to sue. This deals with the issue of standing. Notes and mortgages are sold as commercial paper. If the sale is not accompanied by an appropriate assignment from one bank to another, the second bank has no right to bring a foreclosure lawsuit.

The delays in foreclosure proceedings can cause interest and penalties to accrue against the homeowner.

Foreclosure Settlement Conferences

When a foreclosure lawsuit is initiated in the State of New York, the homeowner is entitled to attend a foreclosure settlement conference. At these conferences, judges and their staff seek to mediate foreclosure issues and assist homeowners in obtaining mortgage modifications. Unfortunately, the reality is many of the homeowners whose homes have gone into foreclosure could not afford, when they bought the homes, to pay the mortgages and due to the economic crisis facing America have even less capability today of paying their mortgages.

Elliot S. Schlissel, Esq. is a foreclosure defense lawyer representing homeowners throughout the metropolitan New York area who seek to fight foreclosure lawsuits.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, defective mortgages, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure proceedings, mortgage modification, New York foreclosure defense lawyers

Surging Foreclosures on Long Island

November 5, 2013 by Elliot S. Schlissel

As the mortgage crisis is fading in many parts of the United States, it is still heating up on Long Island. More than 1,300 foreclosure cases have been filed in the first eight months of 2013. This is more than a 50% increase during the same eight month period of 2012. Foreclosures have been increasing on Long Island even while there have been significant drops in foreclosure proceedings brought in other areas of the country.

Darren Blomquist, the Vice President of RealtyTrac, recently stated “we’re definitely seeing the Long Island area buck the national trend when it comes to foreclosure activity.” Long Island has more than double the national average of mortgages that are significantly behind on their payments. In July of this year, more than eight percent of all homes in Suffolk County and six percent of all homes in Nassau County were either in foreclosure or moving towards being sued in a foreclosure proceeding.

Why Foreclosure Persists on Long Island

There are numerous reasons why Long Island has had a higher level of foreclosures than the rest of the country. The foreclosure process is long and drawn out in the State of New York. Long Island was an area that had more than the national average of high risk home mortgage loans. Long Islanders also lost many high paying jobs. The new jobs that have been created in the past few years on Long Island tend to be minimum wage or low wage positions.

Mortgage Modification Problems

Long Islanders are facing similar problems to homeowners in other states facing foreclosure. The mortgage modification process does not work well. There are approximately 45,000 homes facing foreclosure on Long Island. For those families, the recent rise in the sales price of homes is not helping them out of their financial difficulties.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure attorney, foreclosure crisis, mortgage modification, mortgage modification attorneys, New York foreclosure attorney, New York foreclosure defense lawyers

Archives for November 2013

How Good Does Your Credit Score Have To Be To Obtain a Low Interest Rate Mortgage?

Mortgage Terms – Part II

Mortgage Terms – Part I

Issue of Standing in Foreclosure Lawsuit is Waived By Failure to Plead It In The Defendant’s Answer

Federal Government Seeks $863 Million from Bank of America For Defective Mortgages

US Bank and Wells Fargo Violate Duty to Negotiate in Good Faith at Mandatory Foreclosure Settlement Conference

The Foreclosure Process in New York

Losing Your Home

New York’s Backlog of Foreclosure Cases

Surging Foreclosures on Long Island

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