Foreclosure Defense Attorneys

90 Day Notice Requirement Not Complied With

90 Day Notice Requirement Not Complied WithThe plaintiff in this case, a financial institution, had appealed an order denying it summary judgment of foreclosure. A summary judgment motion is a motion that states there is no question of fact and the financial institution should be entitled to enter a judgment of foreclosure and sale without taking the case to trial. As stated earlier, the bank lost this motion and they appealed the loss of the motion. The appeal went to the Appellate Division of the 2nd Department.

The Issue On Appeal

The issue with regard to the appeal was Real Property Actions and Proceedings Law Section 1304 (2) This section requires a homeowner receive 90 days notice prior to the initiation of a foreclosure lawsuit. The Appellate Court found the “notice required by this section shall be sent…in a separate envelope from any other mailing or notice.” This was a strict interpretation of the statute.

The Bank’s Problem

The bank in this case acknowledged the envelope it had sent to the homeowner’s contained the required notice under Real Property Actions and Proceeding Laws Section 1304 but it also included other information in 2 separate and distinct notices. The Appeals Courts ruled the bank did not comply with Real Property Actions and Proceedings Law Section 1304.The appeals court found the bank had not strictly complied with the requirements of this section of the law. Therefore the bank failed to satisfy a condition precedent before it could bring its foreclosure lawsuit. The court went on to hold this strict approach precluding any additional materials to be contained in the same envelope with the notice required under Real Property Actions and Proceedings Law 1304 “promotes stability and predictability.” in foreclosure cases. The decision of the lower court ruling against summary judgment for the plaintiff and dismissing the lawsuit was sustained.

Conclusion

Is the purpose of the 90 day notice under Real Property Actions and Proceedings Law Section 1304 is to give the homeowner’s specific notice they are in default on their mortgage and that they have 90 days to cure the default or a foreclosure lawsuit will be initiated against them to take back the house. This strict interpretation of this section by the appeals courts is designed to clarify to the homeowner the serious nature of this notice and the need to deal with being behind on their mortgage payments prior to the foreclosure lawsuit starting after 90 days.

schlissel-headshotElliot S. Schlissel is a foreclosure defenses lawyer who has been helping homeowners form more than 3 decades. He can be reached at elliot@sdnylaw.com or 516-561-6645, 718-350-2802, 631-319-8262.

90 Day Foreclosure Notice

90 Day Foreclosure NoticeMr. Yapkowitz and his wife both defaulted on making mortgage loan payments. At that time the servicing company handling the loan payments sent them a 30 day notice of default. This took place on January 22, 2009. In February 2010, the were notified the loan servicing was transferred went to NationStar Mortgage LLC. The mortgage was then assigned to Wells Fargo Bank in April of 2013. There was a denial of a motion for Summary Judgment (to obtain a judgment of foreclosure and sale without needing to go for trial) in July of 2018. An issue was raised by the decision of the Supreme Court with regard to whether each of the homeowner’s must receive a 90 day notice separately from the other borrower.

The Law In New York

New York Real Property Actions and Proceeding Law Section 1304 requires the mailing of a 90 pre-foreclosure notice to the individuals facing foreclosure. In this case the notice to the individuals was jointly addressed to them.

The appeals court affirmed a judgment in the homeowners favor dismissing Wells Fargo’s foreclosure lawsuit. The Appeals Court in the Second Department ruled to strictly comply with real property actions and proceedings law section 1304 in a foreclosure lawsuit plaintiff must mail a 90 day notice addressed to each borrower in separate envelopes as a precondition to commencing the foreclosure case. Wells Fargo, in this case, had jointly addressed the borrowers with a 90 day notice. This did not comply with the statute and this was the reason for the dismissal of the case.

Conclusion

All of the terms of New York Real Property Actions and Proceedings Law Section 1304 regarding pre-foreclosure notice to the homeowner’s must be strictly complied with. If the statute is not strictly complied with, the foreclosure lawsuit can be dismissed.

schlissel-headshotElliot S. Schlissel is a foreclosure defenses lawyer who has been helping homeowners form more than 3 decades. He can be reached at elliot@sdnylaw.com or 516-561-6645, 718-350-2802, 631-319-8262.

$539 million dollars for The American Rescue Plan Act

539 million dollars for The American Rescue Plan Act$539 million dollars has been appropriated pursuant to an act of Congress for New Yorker’s who are in foreclosure or behind on their mortgages. New York State has received a block grant of $539 million dollars from the federal government. These funds are to be distributed to homeowner’s who are behind on their mortgage or their property taxes or are behind in other housing related expenses. Homeowners who qualify can receive up to $50,000 from the New York recently approved Homeowner’s Assistance Fund. This is not a loan. This is a grant. These fund were appropriated by the federal government to assist homeowners in each state that had fallen behind on expenses related to their mortgages. New York States share of this fund was $539 million.

The American Rescue Plan Act

The 539 million dollars allocated by the federal government to the State of New York was part of the American Rescue Plan Act. Homeowner’s who seek to receive the fund under this federal program must have experienced a financial hardship related to the covid 19 pandemic. New York Governor Hochel is in charge of the program to distribute these funds.

The following is a list of the documents that will be necessary to submit to the portal created by New York State for homeowners’ to qualify to receive up to $50,000 from the New York State homeowner assistance fund:

Proof of Ownership

Copy of your deed, property tax bill, co-op statement, mortgage statement or homeowner’s insurance policy.

Proof of Identity

Copy of passport, social security card, drivers license, Military ID or naturalization card.

Income Documentation

From all adult members of the household: tax returns, two most recent paychecks/paystubs or 1099 forms.

In the event you receive income based benefits such as SNAP, HEAP, public assistance or section 8 you will need to provide documentation of this.

Proof of Delinquency

In addition to all the above-referenced items, you will need proof of your delinquency on making your current housing payments. The State requires a mortgage statement showing a default or a delinquency notice on co-op/condo charges. If your property taxes are behind, you need to show the amount that is past due on a delinquent tax notice.

This program is estimated to be opening for applications on January 3, 2022 on a first come, first serve basis. This means when the fund is used up, and the 539 million is spent everybody who applies after these funds are spent will be closed out.

My office will be available to help homeowners apply for funds under this program.

schlissel-headshotElliot S. Schlissel, his partner and their associates have been helping homeowners deal with foreclosure related issues for more than 3 decades. He can be reached at elliot@sdnylaw.com or at 516-561-6645.

Information in the Emergency Eviction and Foreclosure Prevention Act

Information in the Emergency Eviction and Foreclosure Prevention Act The covid-19 Emergency Eviction and Foreclosure Prevention Act created a standardized hardship declaration form which tenants can submit to their landlord to prevent and halt an eviction if they have a financial hardship related to or during covid-19 that prevents them from being able to pay their rent. In addition they can qualify if someone in their household is at an increased risk of illness due to covid-19.

The form gives tenants the ability to declare a financial hardship if they have lost income. In addition if they have increased healthcare, childcare or other family expenses, they can also declare a hardship. In the event they have been unable to obtain meaningful employment because of circumstances related to covid-19 they also can qualify. Funds also be allocated to help them with moving expenses.

A tenant who obtains a copy of the standardized hardship declaration form should return it to their landlord or to the court to prevent a landlord from filing an eviction. This can be used to suspend an eviction proceeding already underway until May of 2022.

Protection Against Foreclosure and Tax Lien Sales
for Residential Property Owners

The statute also gives homeowners protections against a foreclosure sale of their home and tax lien sale of their home. This applies to residential property that involves 10 or fewer apartment units. The residential property must include the individuals primary place of residence.

Property owners will be able to obtain protection from foreclosure and tax lien sales of their homes by filing a standardized hardship declaration form with their mortgage lender or with the court. The property owners must declare in this form under penalties of perjury that they have a financial hardship. In addition, they must allege this financial hardship prevents them from paying their mortgage or property taxes related to lost income. This includes reduction in rent collections, increased expenses or their inability to obtain meaningful employment. Landlords with 10 or more rental units are excluded from these protections.

Negative Reporting and Discrimination Extending Credit

The law protects a property owner from credit discrimination too if they are behind on their mortgage payments or they have received a stay of mortgage foreclosure sale, tax foreclosure or tax lien sale on their property.

The hardship declaration can also be used to avoid credit discrimination based on mortgage arrears on the property in which they reside. This statute gives new protection to single family residences, co-ops, owner occupied multifamily primary residences and primary residences. This legislation will also forbids negative reporting to any credit agency related to a mortgage foreclosure proceeding or tax foreclosure proceedings.

schlissel-headshotElliot Schlissel, his partner and his associates help homeowners facing foreclosure, bankruptcy or facing financial difficulties . They can be reached at 800-344-6431 or by email at info@sdnylaw.com

Who Is Eligible for the $539 Million Dollars Homeowners Assistance Program?

Homeowners Assistance ProgramThere is approximately $539 million dollars allocated from federal funds to assist homeowners facing foreclosure and other financial issues. There are specific requirements regarding who is eligible for these funds. Homeowners who earn less than the average median income which is approximately $107,400 for a family of 3 are eligible to participate in this program. In addition, homeowners who earn less than 150% of the area median income and meets the federal requirements of “socially disadvantaged” which includes “those who have been subjected to racial or ethnic prejudice”.

In addition to the aforementioned requirements, to qualify homeowners will have to demonstrate some kind of financial hardship. Examples of financial hardships could be loss of income or added expenses that have been caused or are related to the covid-19 pandemic. The individuals who seek aid must actually live in the home that they seek the money for. The home must be their primary residence. The primary residence can be single family homes, condos, co-ops , mobile homes or 2-4 family homes.

Three Options

There are three different options within the Homeowners Assistance Program. The first option is for homeowners with a mortgage who are ending forbearance agreements and homeowners who didn’t go into forbearance and are behind on their mortgage payments. Financial relief is available to these homeowners in a five year forgivable loan for an amount of money needed to modify the mortgage in a way that can allow the homeowner to better afford going forward. Homeowners under option one can receive up to $50,000.

Option 2 is for homeowners who don’t have a mortgage but are behind on expenses such as property taxes, water bills, insurance or condo or co-op fees. The relief is a five year forgivable loan for the amount of the debt that is owed. The amount of the forgivable loan is capped at $50,000.

The third option is in addition to one of the first two options. This is for homeowners who are unemployed or who are unable to keep up with the costs of maintaining their housing. For homeowners to qualify for the third option they must be making less than 30% of the area median income before the pandemic. For a homeowner to qualify for the third option, they can receive up tp six months of future housing payments to stay afloat as the economy recovers. These six payments are in addition to the other relief and will be funded through a different group of federal funds called the Community Development Block Grants.

Portals are in the process of being developed according to the Department of Homes and Community Renewal. This will allow homeowners to apply online or over the phone through a housing counselor.

schlissel-headshotThe law office of Schlissel Decorpo, LLP is available to help homeowners facing foreclosure, in foreclosure and facing other financial problems that have put their homes at risk of being lost. We can be reached at 800-344-6431 or by email at info@sdnylaw.com

Federal Funds Available to Help Homeowners in Foreclosure

Federal Funds Available to Help Homeowners in ForeclosureHomeowners facing foreclosure who are either behind on their mortgages, their property taxes or other housing related expenses can receive up to $50,000 in financial assistance through New York State’s recently approved Homeowners Assistance Fund. The State of New York has received $539 million dollars in financial assistance for homeowners pursuant to the American Rescue Plan Act. On December 2, 2021 the United States Treasury approved the implementation of a plan in the State of New York with regard to the distribution of $539 million dollars to homeowners facing financial difficulties and foreclosure.

Under the American Rescue Plan Act, households must have experienced a financial hardship caused by the covid-19 pandemic and earn at or below 150% of the median income in their area. Governor Hochul is in the process of unveiling an outreach campaign targeted to homeowner’s at risk of foreclosure. Although applications are currently not available they will be available in the near future.

539 Million Is Not Enough

Kristen Keef, the senior attorney for the Empire Justice Center has recently stated “I think everyone generally thinks $539 million will not be enough in cash assistance for homeowners”. Kristen Keef has indicated there are between 400 thousand and 500 thousand New York homeowners who are behind on their mortgage payments. From September 29th through October 11, 2021 the delinquency rate among homeowners in New York State was over 13%. The delinquency rate is higher among black and Latino homeowners. It is estimated that up to 35% of black homeowners were late on their mortgage payments. This is a rate 5 times higher than the rate for white homeowner’s that have a delinquency rate of approximately 7%. The delinquency rate for Latino homeowners has been approximately 16%.

The last prior peak delinquency rate in New York State was in 2012 when 8.3 percent of mortgage payments were more than 30 days behind. Ms. Keef went on to state “obviously they were using different data back then and different methodology, potentially than today, but I think suffice it to say that the delinquency rate is much higher today than when we thought it was really awful in 2009, following the subprime mortgage lending crisis and great recession. Ms. Keef has indicated the $539 million dollars that is available will fall far short of being able to help all of the people in need of assistance.

schlissel-headshotThe law office of Schlissel Decorpo, LLP is available to help homeowners facing foreclosure, in foreclosure and facing other financial problems that have put their homes at risk of being lost. We can be reached at 800-344-6431 or by email at info@sdnylaw.com

$539 Million Dollars Available to Help Homeowners in Foreclosure

Homeowners in ForeclosureOn Thursday, December 4, 2021, New York State became the first state in the United States to receive United States Treasury approval for $539 million in a Homeowner Assistance Fund to aid individuals whose homes are in foreclosure. Governor Kathy Hochul is working on plans to unveil a statewide outreach program for at risk homeowners.

The Homeowners Assistance Fund will allow homeowners in New York State to receive financial aid regarding foreclosures on mobile homes, single family homes and elderly homeowners who have taken out reverse mortgages will also qualify for assistance. The Homeowners Assistance money was part of the $1.9 trillion dollar law enacted by Congress and the Biden administration to keep Americans “experiencing hardships associated with the pandemic” in their homes. The money is being allocated to both states, Native American tribes and United States territories.

The Homeowners Assistance Fund is separate from the $47 billion dollars that the United States government is giving to states to provide funds for rental assistance to tenants facing eviction. These funds are also included in the American Rescue Plan. An internet portal will eventually be set up. Homeowners will be able to file applications for assistance through the portal. This is a unique opportunity for homeowners either in foreclosure or facing foreclosure to use federal funds to deal with these issues.

schlissel-headshotThe law office of Schlissel Decorpo, LLP is available to help homeowners facing foreclosure and facing other financial problems that have put their homes at risk of being lost. We can be reached at 800-344-6431 or by email at info@sdnylaw.com.

Happy Thanksgiving

Happy Thanksgiving 2021

This Thanksgiving, we are immensely grateful, that with all the changes in our world, we have friends and family with whom we can gather. Let us take time this year to live in gratitude for the bounty we experience all around us.

Happy Halloween!

Happy Halloween

FRESH SUMMARY OF NEW YORK’S FORECLOSURE LAWS

FORECLOSURE LAWSRestricted lenders must comply with temporary NYS foreclosure laws protecting homeowners who’ve declared a COVID-19 hardship. Here’s a summary of changes effective May 1, 2021 until August 31, 2021, when statewide foreclosures will resume.

Here to Stay?

The Senate and House Assembly recently passed a legislative suspension of the entire New York State foreclosure eviction process. Enacted last December, the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 expired earlier this month. Two days later, a gubernatorial extension extended the Act retroactively to apply to all residential and commercial mortgage loans affected by loss of income and other disruptive factors related to the health crisis.

Moratoriums are staying for a few more months. Title 13 of New York’s merged laws requires the debtor to file a Declaration of Hardship form and file it with the foreclosing party, agent, or county court. A properly filed hardship declaration qualifies homes loan and forbids:

  • Tax lien sales and tax foreclosures during the suspension period
  • New foreclosure filings, settlement conferences, acceleration and other steps typically involved in a foreclosure
  • Forced sales at auction, Default Judgments, Deficiency Judgments, and removal of owners/mortgagors, occupants, and tenants until August 31, 2021
  • Reporting accounts with missed or severely delinquent payments to credit bureaus, using forbearance or hardship declarations as a reason to deny future credit applications or negatively affect credit ratings

And allow access to other options to mitigate loss or avoid foreclosure, such as these:

  • twelve-month forbearance for non-government backed mortgages
  • Federal aid package of $20,000,000, secured by state officials and allocated for homeowner grants and the Homeowner Protection Program (HOPP), an organization created to help connect with programs and agencies that assist with mortgage payments and resources to avoid losing your home.

If you have a pending foreclosure case in progress, you will receive a copy of the Hardship Declaration in the mail. This will come from the court. Newly filed foreclosures require the lender or servicer to send mortgagees aAll legally required pre-foreclosure notices must accompany the form. You may access a blank copy of the Hardship Declaration forms on the Office of Court Administration’s website.

Hardship declaration is an option available for borrowers owning no more than to ten residences, including condos and co-ops. Industry professionals strongly

Opponents of the Act have complained about losses incurred by creditors. They believe the law favors borrowers and denies lenders their constitutional right to have non-payment disputes heard in a court of law. They dismiss counter defenses from supporters, who point to the provisional right of lenders and services to charge and collect interest, late fees, and other penalties set forth in the mortgage agreement.

Times of Lien

New York is a “lien theory” state. What that means is most foreclosures are usually judicial. They begin when a lender has filed a civil lawsuit against the borrower in loan default. It will cause a court case over which a judge presides until a settlement, dismissal or judgment order is affirmed, if appealed.

Sometimes, lenders can use a “non-judicial” type of foreclosure procedure in New York. However, this is rare. It requires an existing “power of sale” clause in the required instruments, which is a Deed the loan recipient executed in the original note. It allows a lender to sell the property on behalf of the borrower, should a default situation arise.

Deal or No Deal?

State law gives the borrower a chance to work things out with the lender. First, the filing party proves they served the complaint to the defendant by one of several means specified by law. They file the verification of service with the clerk’s office. Then, 60 days later, the court schedules a Settlement Conference on their docket. The court will notify you regarding when and where the conference is going to take place, along with what you should bring as documentation. (N.Y. Civil Practice Rule 3408). At the Settlement Conference, the borrower and lender can negotiate a solution to avoid foreclosure.

Money Changes Everything

Per New York property law, they may reinstate a mortgage loan before the Judge will dismiss the lawsuit. The amount the borrower must pay to be reinstated includes fees and costs, besides the past due amount. Also, if you become able to pay that total after judgment is rendered, but before the foreclosure sale takes place, your court case is stayed, and the mortgage is reinstated.

No Givebacks?

In some states, a defaulting borrower has a “redemption” right. This allows a specific amount of time to buy back the residence after a foreclosure sale. The timeframe to redeem a home varies among state, and there are two ways it can be done, depending on the state:

  1. Reimburse the buyer of the home in the amount paid at the sale, plus allowed costs.
  2. Repay the lender the amount of the total mortgage debt owed, plus interest, late fees, and expenses.

Unfortunately, redemption periods aren’t permitted in New York. On the other hand, a foreclosure attorney can give clients peace of mind if they are seeking advice on how to buy a foreclosure in NY.

Are We Even?

Sometimes, residential property is sold for less than the total mortgage debt owed. New York’s Consolidated Laws grant lenders a right to submit a Motion for Deficiency Judgment against the borrower for the remaining difference. The motion must be filed no later than 90 days following the consummation of the sale. Once the deed to the property is delivered to the new owner, they consider the sale consummated by law. The court must follow state law, which determines deficiency as the higher of two amounts:

  • Fair Market Value OR
  • Sales price

The potential for being on the hook for the balance is a good reason to consider hiring a property attorney who is familiar with foreclosure laws in NY and can offer expert advice and legal strategies that minimize or eliminate your liability.

No “R” in Fee

Sadly, there are those who have targeted vulnerable folks in this predicament. Their goal is to gain the equity remaining in a home facing foreclosure and even offer loan modification services for the title to the property at risk. Some fulfill their promises, but that’s irrelevant because it is illegal to offer foreclosure relief for a fee. Homeowners should never have to pay a fee to change a loan or explore options to avoid losing their home. HOPP and the federal government will assist you with no cost. Think about it like this: if you don’t have the money to pay your monthly mortgage payment that’s past due, how will you afford a fee charged for an otherwise free service? It’s money that would be better spent toward the debt or competent legal help.

schlissel-headshotElliot S. Schlissel, Esq. is a foreclosure lawyer representing homeowners in foreclosure lawsuits throughout the Metropolitan New York area. He can be reached for a free consultation at 800-344-6431 or e-mail at Elliot@sdnylaw.com.

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