$2.5 Million Foreclosure Dismissed Based on Statute of Limitations Defense

Picture of a home

US Bank brought a foreclosure lawsuit against Samuel Rudick. Samuel Rudick and Patricia Rudick, who is deceased, took out a $1.75 million loan for their Westhampton home in 2003. In 2004 their loan was modified. In 2006 the Rudicks took out a second mortgage on their home. During 2006 the first and second mortgages on their home were consolidated into a third mortgage for approximately $2.5 million.

The original financial institution regarding this matter was JP Morgan Chase. Chase eventually sent a notice of default to the Rudicks which stated: “that they had defaulted on their mortgage loan by failing to tender their monthly payments.” A foreclosure lawsuit was brought by JP Morgan Chase in 2008. Chase discontinued this lawsuit. Eventually a second foreclosure action was commenced. A motion was made to dismiss the second lawsuit in 2014. The basis of the dismissal application was that the 6 year statute of limitations had expired since the loan had been accelerated (called due and owing), more than 6 years ago.

A Third Foreclosure Proceeding

US Bank acquired the mortgage from Chase Manhattan Bank. US Bank therefore started a third foreclosure action. This lawsuit was also dismissed.

Conclusion

Attorney Elliot Schlissel

Homeowners whose homes go in foreclosure should consult with an experienced foreclosure lawyer to see if there is a valid defense to the lawsuit. The homeowners in this case as a result of the excellent legal work by their attorneys came into a $2.5 million windfall!

Foreclosure Action Dismissed; Statute Of Limitations Expired

Foreclosure Action Dismissed: Statute of Limitations Expired

In a case before Justice David Elliot in Queens County, Supreme Court a foreclosure action was brought by Americas Wholesale Lender. The lender claimed the defendants were in default in their mortgage payments.

Motion to Dismiss

The defense in this case made a pre-answer application to the court asking to dismiss the action based on the fact it was time barred by the statute of limitations. The statute of limitations in foreclosure cases is 6 years from the time the debt is accelerated and/or the entire amount is called to be due and owing. In this case the defendants were able to show the debt was accelerated by commencement of a foreclosure action in 2008 which was subsequently discontinued.

Statute of Limitations Expired Two Years Earlier

The plaintiff in this case brought this foreclosure lawsuit more than 2 years after the expiration of the 6 year statute of limitation period. In their motion the defendants were able to adequately establish the case was time barred by the 6 year statute of limitations.

Judge Elliot in his decision found the plaintiff did not raise an issue of fact that the statute of limitations was re-set by the defendant’s alleged payment in 2010. In addition the attorneys for the financial institution did not establish there was a re-acknowledgment of the debt via a letter requesting a mortgage modification. The defendants’ motion to dismiss the lawsuit was granted.

Conclusion

Attorney Elliot Schlissel

In each and every case where a foreclosure is initiated against a homeowner the question as to whether there is a complete defense based on the statute of limitation must be evaluated. Should there be a statute of limitations defense an appropriate motion to dismiss should be made.

Elliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the Metropolitan New York area for more than 3 decades.

New Law Allows Homeowners to File Late Answers In Foreclosure Case

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In the case of first impression Justice William Giacomo sitting in the Supreme Court foreclosure part in Westchester County was presented with an issue concerning the filing of a late answer by a homeowner. JP Morgan Chase had started a foreclosure lawsuit on June 8, 2016. The defendant, Hernandez, did not submit a notice of appearance and a written answer; however she did appear at 5 foreclosure settlement conference meetings at the courthouse. The case was eventually removed from the foreclosure settlement part on March 15, 2016. On March 30, 2016 she filed a written answer. The attorneys for JP Morgan Chase rejected the answer. They claimed that the time to submit an answer had expired.

Hernandez brought a motion requesting the court force JP Morgan Chase to accept the late filing of the answer. Justice William Giacomo in his decision held the intent of the new legislation was to allow pro se defendants (defendants who do not have an attorney) who participate in foreclosure conferences to submit answers after the foreclosure conferences end even though they are untimely. In this case Judge Giacomo stated that Hernandez was served with a summons and complaint on June 18, 2016 and she participated in foreclosure settlement conferences. The court noted that 15 days after the case was removed from the foreclosure conference part Hernandez filed her answer. The Judge held that the intent of the new legislation was to allow individuals representing themselves to participate in the litigation process. In this case he found JP Morgan Chase would not suffer any prejudice in permitting Hernandez to file a late answer. He therefore granted her motion and a late answer was now considered to be timely served.

Conclusion

This is a terrific decision for homeowners. Many homeowners come into my office and participate for months and months in the foreclosure settlement conference part only to have their mortgage modification applications denied. They then find themselves in a litigation court part, however since they have not submitted an answer they have defaulted in the case and the judge won’t hear their side of the story. This new statute allows homeowners to file late answers and participate in the legal proceedings regarding the foreclosure on their home.

Attorney Elliot Schlissel

Elliot S. Schlissel and his associates are foreclosure attorneys, with more than 100 years of combined legal experience, representing homeowners on foreclosure cases throughout the metropolitan New York area. We can be reached at 1-800-344-6431, (516) 561-6645, or (718) 350-2802 for a free consultation.

The Foreclosure Defense

Defense Plan Graphic

Elliot S. Schlissel and his associates are foreclosure attorneys, with more than 100 years of combined legal experience, representing homeowners on foreclosure cases throughout the metropolitan New York area. They can be reached at 1-800-344-6431, (516) 561-6645, or (718) 350-2802 for a free consultation.

THE ZOMBIE HOMES RESCUED

A 2 story home

The New York State Legislature has passed a bill which requires a statewide registry of abandoned homes. In addition this new law requires financial institutions, banks and loan servicing organizations to report vacant homes to the state registry. Communities in both upstate and on long island have had hearings regarding their problems with regard to vacant homes which attract drug dealers and squatters. This new law places the burden on financial institutions, loan servicing companies and banks to maintain abandoned homes. Prior to this statute local municipalities had to bear the burden of paying for the maintenance of these abandoned “zombie” homes.

Zombie Homes in New York

New York State Attorney General Eric T. Schneiderman had stated that his office had accumulated a list of 16,700 vacant foreclosed homes. These vacant foreclosed homes represent the population of zombie homes throughout the State of New York.

The statute was sponsored by New York State Senator Jeffrey Klein of the Bronx. He recently stated there were devaluations of real property in the millions of dollars related to these zombie homes. In addition he stated: “we must hold banks accountable for decaying, abandoned properties stuck in the legal limbo of foreclosure and I look forward to the Senate taking action on this important issue.” It should be pointed out that foreclosures in New York currently can take several years from initiation until completion.

Attorney Elliot Schlissel

Elliot S. Schlissel and his associates have been defending homeowners in foreclosure lawsuits for more then 3 decades. There are homeowners throughout the Metropolitan area who are living in their homes due to aggressive, experienced legal representation of our attorneys.

TAX FORECLOSURE SET ASIDE

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A tax foreclosure case was brought before Justice Williams Giacomo, who sits in a tax foreclosure part in the Supreme Court in Westchester County. Plaintiff had brought a tax foreclosure proceeding against the residence owned by Ms. Pena. The service of the notice of the tax foreclosure proceeding was returned as undelivered by the United States Postal Department. The premises the tax foreclosure was brought against was vacant. The defendant, Ms. Pena, was thereafter personally served at 8 Handford Place, in November of 2013, with a copy of the tax foreclosure summons and complaint.

NO APPEARANCE AND NO ANSWER

Ms. Pena did not appear in the lawsuit and did not submit an answer to the tax foreclosure proceeding. Ms. Pena contacted counsel for the plaintiff. She advised them she planned on paying the tax lien. She also advised counsel for the plaintiff she lived at 100 Wildey Street. She requested all future communications be sent to her at that address.

As a result of this communication counsel for the plaintiff amended the caption of his proceeding and served an amended complaint on the bank defendant. Plaintiff’s counsel failed to serve Ms. Pena. Thereafter Ms. Pena moved to vacate the judgment of foreclosure and was unsuccessful. In addition she requested the amended complaint be dismissed because it was served at an address she did not live in.

AMENDED COMPLAINT NOT PROPERLY SERVED

Judge Giacomo found the amended complaint had to be served on Pena. Since an amended complaint superseded the original complaint the amended complaint also had to be served in the same manner as the original summons.

Since the bank failed to do this the court vacated the judgment of foreclosure and dismissed the foreclosure lawsuit.

CONCLUSION:

Attorney Elliot Schlissel

The careful presentation of evidence in this case by Ms. Pena showed that the foreclosing plaintiff failed to meet the court’s rigorous standards concerning service of the tax foreclosure summons and complaint. Therefore the court dismissed the case.

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

NY Foreclosure Defense Attorney Elliot Schlissel

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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