Blogs | Foreclosure Defense

Reverse Mortgages: Should You Consider One?

June 28, 2017 by Elliot S. Schlissel

Picture of a home

Reverse mortgages are usually taken out by seniors to unlock the equity in their homes. However, there are pros and cons as to whether a reverse mortgage is the appropriate thing to do.

Facts About Reverse Mortgages

Reverse mortgages are mortgage loans taken out by individuals at least 62 years of age. The theory behind a reverse mortgage is that the equity in the home will support the reverse mortgage and the mortgage will be repaid when the homeowners die. Reverse mortgages do not have to be paid as long as one of the borrowers is still living in the home. The funds received from the reverse mortgage can be taken in a lump sum, as a line of credit or in monthly payments.

Reverse Mortgages vs. Traditional Mortgages

In a traditional mortgage the homeowner takes out a mortgage and then makes monthly payments until the mortgage is paid in full. The monthly payment represents both the payment of principal and interest due and owing on the principal. With regard to reverse mortgages, the homeowners do not have to repay the reverse mortgage on a monthly basis. It is usually paid after both of the homeowners die or both of the homeowners are no longer living in the home.

Benefits of a Reverse Mortgage

One of the most significant benefits of a reverse mortgage is the home will not be foreclosed upon and the homeowners will not be forced out of their home because they can’t make monthly payments. Reverse mortgages give homeowners peace of mind knowing they no longer have a monthly payment they need to make to the bank.

Some Disadvantages of Reverse Mortgages

Banks are usually very conservative with regard to how much money they will provide a homeowner with pursuant to a reverse mortgage. When the homeowners die, the homeowners’ heirs will either have to have the home sold to pay back the reverse mortgage or they will have to come up with the balance due on the reverse mortgage. Reverse mortgages generally have higher interest rates than traditional mortgages.

Conclusion

If you are considering a reverse mortgage you should first shop around to several different financial institutions. You should compare the interest rates offered on the reverse mortgage from each of these institutions. If you are not sure as to whether a reverse mortgage is the appropriate avenue for you to pursue, you can consult with an elder law attorney to help you make this decision. Attorney Elliot Schlissel

Elliot S. Schlissel, Esq. is a member of the National Academy of Elder Law Attorneys representing seniors throughout the Metropolitan New York area.

Filed Under: Reverse Mortgages

VIDEO: Reverse Mortgage Foreclosures

June 1, 2017 by Elliot S. Schlissel

Filed Under: Foreclosure Defense, Reverse Mortgages

Trump Administration Creates Mortgage Problems For Potential Homeowners

May 1, 2017 by Elliot S. Schlissel

Picture of a home

Donald Trump shortly after becoming President of the United States signed an administrative order to stop a fee rate cut for mortgages from going into effect. This fee rate cut would have saved potential home buyers who do not have the funds for large down payments – significant amounts of money. As a result of the action taken by the Trump administration 40% of all millennial home buyers will find it more expensive to pay their mortgage.

The Actual Events

A few hours before Donald Trump was sworn in as President he signed an order which set aside action taken by the Obama administration that would have lowered monthly fees for prospective homeowners who buy homes and have less than 20% of the cost of the home to pay as a down payment. These prospective home buyers who do not have 20% to put down for the purchase of a home use a government program operated by the Housing and Urban Development Department known as “FHA Loans” to insure their mortgages. The decrease in the cost of the FHA fees would have saved the average prospective homeowner who takes out an FHA backed mortgage in the State of New York about $1,000.00 a year.

The FHA loan fees were raised during the height of the real estate crisis. The action was taken to cover short falls within the FHA program. The action taken by the Obama administration was designed to bring the FHA costs to the level they were at before the housing bubble crisis took place. The action by Donald Trump has the impact of reducing the buying power of prospective homeowners. The amount of money that could be used for mortgage payments will be reduced by the approximately $1,000.00 a year that has to be paid for the FHA insurance fees.

Mortgage Insurance

Prospective homeowners who do not have 20% to put down as a down payment on a home must buy mortgage insurance. This mortgage insurance covers the potential losses to the financial institution if they are unable to make their mortgage payments. This is necessary because when homeowners do not have 20% to put down on their home there is often insufficient equity in their homes for banks to cover their potential losses in the event the home is foreclosed upon and sold.

Attorney Elliot Schlissel

FHA loans are most often utilized by young home purchasers. Almost 40% of all home purchases by younger purchasers are FHA backed loans.

Filed Under: FHA Loans, Mortgages

Reverse Mortgages: What Are They and How Do They Work?

April 7, 2017 by Elliot S. Schlissel

reverse mortgage

A reverse mortgage is a mortgage loan given to senior citizens that seek to utilize the equity in the home to support themselves in their old age. Generally speaking, the loan does not have to be repaid until the last surviving spouse either dies or permanently moves from the home. In the event of the death of the last of the husband and wife to die the estate of the second to die has approximately 6 months to repay the entire balance of the reverse mortgage or take action to sell the home for the purpose of paying off the reverse mortgage. After the reverse mortgage is paid off the rest of the equity derived from the sale of the home becomes an asset of the estate. Should the home be underwater, be worth less than the reverse mortgage, the estate and either the executor or administrator of the estate will have no personal liability with regard to paying off the portion of the reverse mortgage not covered by the sale of the home.

Who Is Entitled to Obtain a Reverse Mortgage?

Eligibility to obtain a reverse mortgage requires all of the homeowners be a minimum of 62 years of age. In addition, all mortgages on the home must be paid off prior to obtaining the reverse mortgage or at the time of obtaining the reverse mortgage. The home must be the primary residence of the individuals seeking to obtain the reverse mortgage. In addition, the homeowners must continue to pay homeowners’ insurance and property taxes of every type and nature that accrue on the home. The taxes can be property taxes, school taxes, town taxes and village taxes.

Loan Amounts

The amount the homeowners can obtain from the reverse mortgage depends on four (4) specific issues: the interest rate at the time of the reverse mortgage loan, the appraised value of the home, the age of the parties seeking to take the loan and the current government imposed lending limits at the time of the loan application.

How Reverse Mortgage Payments are Made

Attorney Elliot Schlissel

Reverse mortgage payments can be made on a monthly basis for as long as the homeowner lives in the home, for a fixed period of months or the homeowners can take a lump sum out all at once. In addition, the reverse mortgage can create a line of credit the homeowners can access at any time. It is not recommended that the homeowners take the lump sum of all the funds from the reverse mortgage. In these cases the homeowners may not be able down the road to pay at one time the taxes on the home. The non-payment of the property taxes on the home or failure to pay the homeowners insurance is a basis for the financial institution bringing a reverse mortgage foreclosure lawsuit.

Filed Under: Mortgages, Reverse Mortgages

Statute of Limitations Defenses in Foreclosure Losses: Six Year Statute of Limitations

April 6, 2017 by Elliot S. Schlissel

write on paper

There is a six (6) year statute of limitations with regard to bringing a foreclosure lawsuit on a mortgage by a creditor. When the lender accelerates the mortgage (calls the entire balance due and owing, the statute of limitation period starts to run).

Acceleration of the Mortgage

When the bank accelerates a mortgage they must provide written notice to the homeowners. The bank is required to provide the homeowners with 90 days notice they they are accelerating the mortgage before they can initiate a foreclosure lawsuit. The failure of the bank to provide the homeowner with this 90 days notice gives the homeowner a legal defense to to foreclosure lawsuit. Our law office has had foreclosures dismissed due to the banks failure to provide the homeowner with this 90 day notice.

Restarting the Six Year Statute of Limitations

If the homeowner make a payment on a mortgage loan, enters into a mortgage modification or files a Chapter 13 bankruptcy that acknowledges the mortgage debt and agrees to repay it, each of these actions will restart the statute of limitations running all over again. The statute of limitations is a complete defense to a foreclosure lawsuit. If the 6 year period is approaching from the time the bank accelerated the mortgage the homeowner should be very careful to avoid taking any actions that will restart the statute of limitation period again. It is strongly suggested if you believe you have a statute of limitations defense, that you consult with an experienced foreclosure defense lawyer and get his or her opinion regarding this issue.

Attorney Elliot Schlissel

Elliot S. Schlissel and his associates for more than 3 decades have been representing homeowners throughout the Metropolitan New York area in foreclosure lawsuits. The law firm strives to keep homeowners in their homes and stop foreclosure cases from going forward.

Filed Under: Foreclosure, Foreclosure Defense

Amount Prospective Homeowners Can Borrow Going Up In 2017

March 28, 2017 by Elliot S. Schlissel

Book and gavel

In 2017, for the first time in a decade, the Federal Housing Finance Agency is raising the amount of money that will qualify for Fannie Mae and Freddie Mac, government backed loans. Loans that exceed the Fannie Mae and Freddie Mac limit are called “Jumbo” mortgages. These mortgages are held by the lenders themselves or they are sold to private investors. In most situations Jumbo loans require a larger down payment and the underwriting requirements are more detailed.

The current limit for 2016 was $417,000.00. this has been the limit since the year 2006. For 2017 the amount that can be borrowed will increase by $7,000.00 to $424,000.00. However, it should be noted in expensive areas of the country like New York, the limit will go to $686,000.00.

As home prices have recovered from the real estate crisis, higher loan limits will allow prospective homeowners to have more flexibility in terms of obtaining government backed mortgages. The real estate website Zillow expects home prices to increase by approximately 3.5% in the year 2017.

The Amount of Down Payments

Generally speaking, most financial institutions require 20% down payments on mortgages. However, the amount of down payments required has been decreasing. Some banks will accept down payments as low as between 3 and 5%. When a mortgagor seeks a down payment in the 3-5% area, they are required to buy mortgage insurance. Unfortunately, the mortgage insurance adds to the monthly mortgage cost.

Elliot-Schlissel

Elliot S. Schlissel is a foreclosure defense attorney representing homeowners throughout the Metropolitan New York area. Elliot and his dedicated associate attorneys diligently work to help their clients obtain mortgage modifications and take legal action to set aside mortgages.

Filed Under: Mortgages

VIDEO BLOG: Statute of Limitations Defense in Foreclosure

March 23, 2017 by Elliot S. Schlissel

Filed Under: Foreclosure, Foreclosure Defense

Mortgages and Death of a Homeowner

February 24, 2017 by Elliot S. Schlissel

Foreclosure Action Dismissed: Statute of Limitations Expired

When you die your mortgage payments are still due and owing. If your lender does not receive the mortgage payments when you die it can move forward to bring a foreclosure lawsuit against your home. The best way to deal with mortgage payments in the event you die is to have an estate plan set up while you are living to deal with this issue. One way of covering the balance due on your mortgage would be to take out a life insurance policy in an amount sufficient to cover your mortgage. There are specific life insurance policies designed for this purpose.

In the event you are married, have a significant other or have a co-borrower upon your death the cosigner or co-borrower would be liable to make the mortgage payments. However if you are the breadwinner and have no life insurance your co-owner or co-borrower may not be in a position to continue to make the mortgage payments. If the co-owner or co-borrower is not in a position to make the mortgage payments the best route may be to sell the home if there is equity in the home. However, if there are children attending local schools, this may not be a practical solution.

Have a Will

Should you write a will, you can make arrangements in the will with regard to what happens to your home in the event of your death. The issue is not who makes the mortgage payments but who inherits the house upon your death. A will can be also tied into a life insurance trust set up to pay off the mortgage when you die. An estate plan can see to it that your home passes to your heirs in a manner that allows them to keep your home.

The best way to deal with death related issues related to your mortgage or otherwise would be to meet with an estate planning attorney and make a plan in the event of premature death or not so premature death.

Elliot-Schlissel

Elliot S. Schlissel, Esq. is an estate lawyer representing clients in drafting of wills, trusts and probating wills and trusts throughout the Metropolitan New York area for more than 3 decades!.

Filed Under: Foreclosure Defense Tagged With: foreclosure defense

Judge Cancels Mortgage against Wife Which Was Fraudulently Obtained

February 22, 2017 by Elliot S. Schlissel

Fraudulently-Obtained

Justice Carmen Velasquez sitting the Supreme Court part of Queens County was recently presented with an unusual case. A wife and husband had married in 1981. The home they lived in was purchased by the wife in 1987. In 1996 a divorce action was initiated. A divorce agreement was entered into in 1997. Pursuant to the terms of this agreement the wife received 100% ownership interest in the home that she purchased in 1987.

Fraudulent Mortgage

The wife claimed her husband and his father had fraudulently obtained a mortgage for $840,000.00 against her home. The wife claims she never signed any documents giving her husband and his father a mortgage on her home. The husband took the position that the signatures on the mortgage were the wife’s, she claimed they were forged.

Wife’s Lawsuit

The wife brought a case seeking the declaration that the husband be barred from all claims to the property, she be considered the lawful owner of the property and the fraudulentmortgage be cancelled and discharged.

Justice Velasquez found the wife’s testimony to be credible and reliable. She took into consideration there was no documentary evidence of a mortgage loan by the wife to the husband’s father. She also took into consideration the wife came from an affluent family and had no need to borrow money. In the end Judge Velasquez granted the wife’s demand for relief, cancelled, removed and discharged the mortgage from the wife’s property.

Elliot-Schlissel

Elliot S. Schlissel, Esq. is a foreclosure lawyer representing clients in obtaining and litigating foreclosure lawsuits throughout the Metropolitan New York area. Elliot S. Schlissel, Esq. and his associates have been defending homeowners in foreclosure proceedings for more than 45 years.

Filed Under: Foreclosure Defense, Mortgage Fraud Tagged With: foreclosure defense

$2.5 Million Foreclosure Dismissed Based on Statute of Limitations Defense

January 13, 2017 by Elliot S. Schlissel

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

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!

Filed Under: Foreclosure, Foreclosure Defense

Facts About Reverse Mortgages

Reverse Mortgages vs. Traditional Mortgages

Benefits of a Reverse Mortgage

Some Disadvantages of Reverse Mortgages

Conclusion

The Actual Events

Mortgage Insurance

Who Is Entitled to Obtain a Reverse Mortgage?

Loan Amounts

How Reverse Mortgage Payments are Made

Acceleration of the Mortgage

Restarting the Six Year Statute of Limitations

The Amount of Down Payments

Have a Will

Fraudulent Mortgage

Wife’s Lawsuit

A Third Foreclosure Proceeding

Conclusion

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