Archives for December 2013

Stopping Foreclosure in Its Tracks

December 27, 2013 by Elliot S. Schlissel

Times are tough in New York right now. Many businesses have downsized their employees. This has caused layoffs. It is harder to make a living in New York today than it was in earlier decades. Financial difficulties can cause stress. The ultimate problem consumers face is when they receive notice the bank is going to foreclose on their home and put them on the street. Receiving notice your home is going into foreclosure can be deflating. However help exists.

You can take legal action to stop foreclosures from moving forward in New York. You do not have to surrender to the financial institutions and be forced out of your home at a time when your credit is at its lowest point. Hiring an experienced, dedicated foreclosure attorney can make the difference between continuing to live in your home and being forced out of it.

There are numerous steps a foreclosure defense lawyer can take to help homeowners. Forbearance agreements can be negotiated. Mortgage modifications can be submitted. Mortgage modifications can sometimes reduce the principal, provide lower interest rates and more flexible terms. Some lenders are willing to defer significant portions of the mortgage indebtedness to later points in time. When applying for a mortgage modification, it is important the homeowner show financial difficulties. Mortgage modifications are designed to help homeowners who are in distress. Our foreclosure defense lawyers can counsel you with regard to the best route to take with regard to mortgage modifications.

Federal House Authority (FHA) Mortgages

There are special programs set up by the Federal House Administration with regard to homeowners who lose their jobs and have financial difficulties paying their mortgages. The program for unemployed homeowners can excuse the homeowner from paying their mortgage for a period of up to one year. During this period of time, the bank will be unable to foreclose. Our foreclosure attorneys can help you prepare the necessary paperwork and make the application to participate in this program. We can also intercede with regard to the bank or financial institution to help you deal with your current financial difficulties.

Foreclosure Court Proceedings

Foreclosure lawsuits are started by the service of a Summons and Complaint by the financial institution’s attorneys on the homeowner. When a homeowner receives a Summons and Complaint they have between twenty and thirty days to take action to stop the foreclosure in its tracks. Our law firm, when defending a homeowner, immediately files between eighteen and twenty five affirmative defenses. We also regularly countersue (sue the bank) as part of the lawsuit. The squeaky wheel gets more grease is an expression. We stand out from the crowd when defending our clients in foreclosure lawsuits. We pressure the financial institutions to make mortgage modifications and/or withdraw their lawsuits. Legal action can be taken to tie the cases up in court any where from three to six years in the Metropolitan New York area.

In Foreclosure? Do Not Despair

The worst thing you can do if your bank threatens to sue you in foreclosure or serves a Summons and Complaint upon you is to do nothing! If you take no action to defend yourself in the court by submitting a written answer to the bank’s lawyer and to the court, you default. By defaulting, you give the financial institution a win. It is like lying down to die. Don’t do it.

If you are facing foreclosure, call us. We will offer you a free consultation. We will provide you with a road map as to what we can do to keep you in your home and defend you in the foreclosure lawsuit. We will give you a written itemized retainer which shows what we will charge you, the basis of our charges, and what we can do for you. Help exists. God helps those who help themselves. If you have foreclosure problems, call us. We are the law firm that can help you. The phones at our law office are monitored 24 hours a day, 7 days a week. We can be reached at 1-800-344-6431, 718-350-2802 or 516-561-6645.

Foreclosures Loom Concerning Home Equity Loans

December 23, 2013 by Elliot S. Schlissel

There is concern there will be a new wave of foreclosure proceedings in the near future related to home equity lines of credit. Home equity loans are a type of second mortgage. Many home equity loans are almost ten years old. The ten year anniversary usually causes the homeowners who have taken out these loans to be forced to start paying back the principal on these loans as well as the interest they have been paying since the loans were originally taken out. It is estimated there is more than $220 billion dollars of outstanding home equity loans with large financial institutions in the United States. When the consumer has to start paying back principal as well as the interest, there is a significant increase in the amount of the monthly payments.

Popularity of Home Equity Loans

Prior to the housing bubble, financial institutions aggressively marketed home equity lines of credit. These lines of credit allowed consumers to pay back more expensive financial obligations such as credit card debts. In addition, home equity loans were used by consumers to buy cars and to take vacations. As a result of banks’ aggressive marketing of home equity loans between the years 2003 and 2007, the amount of outstanding home equity credit increased from approximately $345 billion to $600 billion dollars. Financial institutions that initially approved these home equity loans were counting on the value of the home to increase to support the payment of these loans. Unfortunately the value of homes stopped rising, and during the housing bubble the home valuations were significantly reduced. Large portions of these home equity loans are now unsecured (this means in the event the house was sold, the first mortgage on the property would be satisfied but there would be insufficient funds at the time of the closing of the real estate transaction to satisfy the home equity loan).

Averting a Home Equity Loan Crisis

A home equity loan crisis can be averted if the real estate market turns itself around and real estate values start increasing again. As the real estate values increase, home equity loans will become secured again and in the event of sale of the home, there will be sufficient equity in the homes to pay off the home equity loans.

Elliot S. Schlissel is a foreclosure attorney representing homeowners fighting foreclosure lawsuits. In addition, he helps homeowners obtain mortgage modifications to keep their homes out of foreclosure.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure proceedings, HELOC, home equity line of credit, mortgage modification attorneys, New York foreclosure attorney

Town of Brookhaven Taking Action Against Banks Who Failed to Maintain Foreclosed Properties

December 18, 2013 by Elliot S. Schlissel

Town officials in Brookhaven are moving forward to take action against financial institutions which have failed to maintain hundreds of homes and other structures they have taken title to in foreclosure lawsuits. During the past twelve months, town workers have been forced to board up more than three hundred homes that have fallen into disrepair which are owned by financial institutions as a result of foreclosure proceedings. Town of Brookhaven Supervisor Edward P. Romaine, recently stated “banks let the houses fall apart; did not adequately maintain them and didn’t stay in touch with the local government.”

Foreclosed Homes Devalue Their Neighbors’ Property

It is estimated when a home goes into foreclosure and falls into disrepair it has a negative financial impact on the surrounding homes of approximately $10,000 to $20,000. In addition, vacant homes attract drug dealers and prostitutes.

Property Registration Law

The Town of Brookhaven is in the process of passing a property registration law related to vacant homes. The statute would have a registration fee of $100 for a home or building which has been vacant for less than a year. The failure of financial institutions to comply with this regulation would cost them between $1,000 and $15,000 in fines. The statute would also allow the Town of Brookhaven to place liens on vacant homes and buildings for maintenance work the Town is forced to do. This maintenance work would also include maintaining the property, cutting the grass and trimming trees.

Councilwoman Jane Bonner from Coram has taken the position banks should be held accountable for homes they have taken back in foreclosure. She maintains a strong position it is not the government’s responsibility to maintain property owned by financial institutions.

Conclusion

Foreclosures not only remove families from their homes. They have a negative effect on the surrounding homes and create blights in the neighborhood if the foreclosed homes are not maintained.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, New York foreclosure attorney, real estate, real estate market

Federal Government Moves Against Banks

December 16, 2013 by Elliot S. Schlissel

The United States government has brought several lawsuits against some of the largest banks in the world. The purpose of these lawsuits was to hold these banks accountable for their mortgage fraud practices. As a result of legal action, JP Morgan Chase entered into a settlement whereupon they have to pay $5.1 billion dollars to the regulator of Fannie Mae and Freddie Mac. This settlement dealt with allegations related to toxic mortgage securities packaged and sold by JP Morgan Chase which was one of the causes of the financial crisis in America. This settlement was part of a larger settlement involving a $13 billion dollar payment between JP Morgan Chase and federal and state officials with regard to the bank’s improper mortgage practices.

Bank of America

A federal jury has found Bank of America was responsible for mortgage fraud during the financial crisis. Prosecutors in the case are asking for approximately $850 million dollars in damages from Bank of America.

Banks Charged for Their Bad Behavior

It is important that the government, even though it is long after the fact, is taking the appropriate legal action to find banks responsible for their wrongdoing which created the mortgage crisis in America.

Homeowners Not Compensated

The settlement between the federal government, JP Morgan Chase and Bank of America allocates approximately $4 billion dollars in financial relief to homeowners who were victimized by improper mortgage practices. Considering the hundreds of billions of dollars homeowners have lost, this is a mere pittance. The government should have required a much larger fine from JP Morgan Chase for its improper mortgage actions and mortgage fraud.

Conclusion

The government’s action concerning illegal mortgage practices taken against large banks is too little too late!

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

Courts Flooded with New Foreclosure Cases in New York

December 12, 2013 by Elliot S. Schlissel

It is estimated approximately 45,000 foreclosure cases will be filed in the Supreme Courts of the State of New York in 2013. It is anticipated more foreclosures will be filed in 2013 than in 2011 and 2012 combined in Courts.

The increase in court filings relates to lenders’ ability to provide documentation of their foreclosure lawsuits concerning the accuracy of the foreclosure filings. There was an affirmation requirement imposed by Chief Judge Jonathan Lippman in October 2010, requiring attorneys for financial institutions bringing foreclosure proceedings to attest to the validity of the material in the foreclosure Complaint. On August 30, 2013, a “Certificate of Merit” replaced the attorney’s affirmation. The Certificate of Merit requires the financial institution and its attorneys to document the institution bringing the lawsuit has the mortgage and note and can document the assignments of the mortgage and note from prior financial institutions to them.

Foreclosure Settlement Conferences

Each foreclosure proceeding in the State of New York is subject to a Foreclosure Settlement Conference. More and more homeowners are retaining attorneys to represent them in foreclosure proceedings in New York. Homeowners are utilizing foreclosure lawyers to represent them at the Foreclosure Conferences for the purpose of pressuring financial institutions into granting the homeowners mortgage modifications. It is estimated there will be more than 100,000 Foreclosure Settlement Conferences taking place in the State of New York before the end of the year 2013. The huge number of settlement conferences is causing the legal system in New York to be overburdened.

Approximately half of the homeowners represent themselves at the settlement conferences. Unfortunately, most homeowners representing themselves have difficulties at the settlement conferences and do not obtain good outcomes. Legal representation has a significant impact on the success rate of resolving the foreclosure lawsuits to the homeowners’ benefit.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, defective mortgages, foreclosure, foreclosure attorney, mortgage modification denial, New York foreclosure attorney

Low Down Payment Mortgages

December 11, 2013 by Elliot S. Schlissel

Low down payment and no down payment mortgages played a significant role in the mortgage bubble that developed during the housing boom in the United States. When the housing market crashed, many of the families who had obtained mortgages with little or no down payment found their homes worth less than their mortgages and they had no ability to make their monthly mortgage payments. The reality of the situation was consumers were buying homes they could not possibly afford to keep over the long run.
Although it is difficult to obtain a no down payment or low down payment mortgage today, there are still avenues available to obtain these types of mortgages.

FHA Mortgage Loans

The Federal Housing Administration (FHA) has a loan program where they provide financial guarantees for individuals to obtain mortgages with down payments as low as 3.5%. Although the FHA actually doesn’t act as a direct lender, this federal agency insures loans by financial institutions that provides the financial institution security to offer low down payment mortgages.

Lower Credit Scores

The FHA will provide mortgages to potential home buyers with credit scores as low as 575. FHA mortgages come with restrictions. To begin with, there are caps on the house price related to the region the house is located in. Secondly, the home must be purchased to be used as a principal place of residence. FHA loans cannot be used to purchase investment property.

When an individual or family obtains a low down payment loan from the FHA, they are required to purchase private mortgage insurance. This private mortgage insurance protects the financial institution in the event the homeowner is unable to make his home payments or there is insufficient equity in the home to pay back the mortgage at time of the sale of the home. This private insurance program requires an up front insurance premium that is part of the underwriting costs of the loan. In addition, the homeowner must make monthly payments. Due to the additional private mortgage insurance premiums, the monthly mortgage payments on FHA loans are usually higher than those of conventional mortgage loans.

Veterans Administration Mortgage Loans

The Department of Veterans Affairs (VA) has a mortgage loan program for members in the military and former military members. This allows men and women who served their country to obtain a mortgage with no down payment. Similar to the FHA, the VA doesn’t actually make the loans. What they do is they provide insurance which motivates private lenders to participate in this program. There are specific eligibility requirements under the VA mortgage loan program. VA mortgage loans also carry fees at the time of closing, however they do not require private mortgage insurance, which is required under the FHA program. VA loans are an attractive means of purchasing homes for Americans who served their country in the military.

Private Financial Institutions

As indicated earlier in this article, low down payment and no down payment loans were part of the reason for the housing bubble that existed in this country for the past seven years. Although banks have become more aggressive in marketing conventional mortgage loans, new government regulations related to the Dodd-Frank Act which go into effect on January 10, 2014, will make it very unlikely financial institutions will pursue these type of mortgage loans in the future.

Elliot S. Schlissel is a foreclosure attorney with more than 45 years experience fighting foreclosure lawsuits. He represents homeowners with foreclosure problems in the metropolitan New York area.

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

Home Loans Will Be Harder to Obtain in 2014! – Part II

December 5, 2013 by Elliot S. Schlissel

Fewer Foreclosures in the Future

The creation of the Consumer Financial Protection Bureau (CFPB) may make it more difficult for financial institutions to foreclose on homes owned by homeowners who have stopped making mortgage payments. “For every foreclosure, lenders will have to show the CFPB that there was absolutely no way they could do anything else” according to Gaffney. This will require financial institutions to offer homeowners behind in their mortgage, additional options other than foreclosure. Those options may involve short sales, refinancing, cash for keys arrangements (these are arrangements where lenders pay delinquent homeowners to hand over the keys to their residence and walk away from their homes) and other potential options. Due to the necessity of offering these alternatives, lenders may become concerned that taking back homes from delinquent homeowners will be more difficult. This may result in more conservative underwriting requirements by lenders which will end up shutting more prospective homeowners out of the marketplace to obtain mortgages.

Ability to Pay Rules

Under the new rules going into effect in 2014, financial institutions will have less latitude in evaluating prospective homeowners regarding mortgages. The lender will have to take into consideration the “ability to pay” of the prospective borrower. The following are a list of the new rules lenders will have to take into consideration in underwriting new mortgages in 2014:

Current or reasonably expected income or assets;
Credit history;
Monthly mortgage payments;
Current employment status;
Current debt obligations, (alimony, child support, credit card bills);
Monthly payments on other loans;
Monthly payments on mortgage related obligations; and,
Monthly debt to income ratio or residue income.

Debt to Income Ratio

The debt to income ratio under the new rules will create problems for many families who seek to obtain mortgages. Under the new rules going into effect on January 1, 2014, the monthly debt to income ratio will be set at a maximum of 43%. This means homeowners will not be able to utilize more than 43% of their income to pay all of their financial debts. These debts will include car loans, credit cards, personal loans, and other financial obligations over and above the prospective mortgage they seek to obtain.

Conclusion

Applying for a mortgage in 2014 is going to be more difficult. If you are interested in obtaining a mortgage, apply now!

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

Home Mortgage Loans Will Be Harder to Obtain in 2014! – Part I

December 3, 2013 by Elliot S. Schlissel

Starting on January 1, 2014, it will be more difficult for prospective homeowners in the United States to obtain mortgage loans. This is as a result of the passage of the Dodd-Frank Act. This statute was passed by Congress when the housing market melted down a number of years ago. After the housing meltdown, the federal government funded a bailout of large financial institutions. The Dodd-Frank Act is an attempt to regulate the lending industry. It is designed to protect consumer/taxpayers. In addition to the Dodd-Frank Act there is a Consumer Protection Act of 2010 which also goes into effect January 1, 2014.

“Under the new rules if [banks] want to lend correctly, by the book, they are going to [have to] leave out a lot of borrowers who would otherwise qualify for a mortgage” according to Jacob Gaffney, the Executive Editor of HousingWire.com, and HW magazine. It is estimated close to 50% of the borrowers who could obtain a mortgage in 2013, may not qualify in 2014. What do you do if you are thinking about getting a mortgage? It is suggested you obtain it in 2013.

The Consumer Financial Protection Bureau

Under the Dodd-Frank Act the Consumer Financial Protection Bureau (“CFPB”) is created. The Bureau became operational in July of 2011. The purpose of the CFPB is to prevent consumers from taking out mortgages which were beyond their ability to repay. This federal agency acts as a watchdog to see to it banks don’t start making loans to consumers they can’t afford.

According to Jacob Gaffney, the Consumer Financial Protection Bureau is a mistake. He recently stated “any company out there, especially the larger banks that have business operations outside of mortgages, are going to dwindle their mortgage operations because [the mortgage operations are] just too risky.” He further stated if there are fewer large lenders he anticipates there will be fewer mortgages offered.

Elliot S. Schlissel is a foreclosure attorney with more than 45 years of experience helping homeowners to keep their homes by fighting foreclosure lawsuits. He also helps clients obtain mortgage modifications and seeks out other alternatives to foreclosure.

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

Archives for December 2013

Stopping Foreclosure in Its Tracks

Foreclosures Loom Concerning Home Equity Loans

Town of Brookhaven Taking Action Against Banks Who Failed to Maintain Foreclosed Properties

Federal Government Moves Against Banks

Courts Flooded with New Foreclosure Cases in New York

Low Down Payment Mortgages

Home Loans Will Be Harder to Obtain in 2014! – Part II

Home Mortgage Loans Will Be Harder to Obtain in 2014! – Part I

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