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Elliot S. Schlissel is a foreclosure defense attorney. He and his associates have been helping homeowners remain in their homes for more than 45 years. Elliot assists his clients in obtaining mortgage modifications. He can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.
Fannie Mae and Freddie Mac are now underwriting mortgages which only require a 3% down payment. These new 3% down payment mortgages are only available for first time home purchasers. Is this a good idea? It is thought that home ownership is the foundation in building equity and wealth. It is anticipated these new relaxed mortgage regulations will make it easier for middle class Americans to purchase homes.
The 3% Down Payment Mortgage
The purpose of the 3% mortgages is to make it affordable for young people who don’t have significant funds for down payments, but who have reasonable income, to enjoy the benefits of home ownership. It is also thought the 3% mortgage program will have an affirmative impact on the housing market in the United States.
Mortgage Safeguards
There are a number of safeguards which have been built into this new 3% mortgage program. The current credit requirements to obtain a mortgage shall remain the same. Individuals applying for these mortgages will have to document their income. Only fixed rate mortgages will be available with 3% down payments and the program will only be available for primary residences. It will also be necessary for the prospective home purchasers to have private mortgage insurance.
Historical Perspective of 3% Mortgages
Studies have shown the default rate on 3% mortgages, when they were available in the past, was about the same as the default rate for individuals taking 5% down payment mortgages. To make sure the 3% mortgages don’t become a springboard for another housing bubble, individuals seeking to take out 3% mortgage loans will be required to take a buyer counseling program.
Conclusion
3% mortgages are designed to make the benefits of home ownership available for more middle class families. However, the 3% mortgage program may be the springboard for future default by homeowners who didn’t have the financial wherewithal to actually purchase their dream home. Hopefully this will not spur another foreclosure crisis in America.
Elliot S. Schlissel is a foreclosure lawyer who has helped hundreds of New Yorkers continue to live in their homes.
Nelson and Joyce Coniglio had received more than 700 collection calls during a 4 year period when they fell behind on their mortgage payments. The Coniglios hired an attorney to try to make Bank of America stop calling them. Unfortunately, this didn’t work. A Federal Judge sitting in Florida recently awarded the Coniglios $1 million dollars related to the “unrelenting phone calls from Bank of America.”
Bank of America had an excuse for the phone calls. Their Senior Vice President, Dan Frahm, said the calls weren’t to collect a debt, but solely to help the couple avoid a foreclosure lawsuit.
Lawsuit Against Bank of America
The Coniglios were forced to file a lawsuit in Federal Court to stop the harassing phone calls from Bank of America. They received a default judgment when Bank of America failed to respond to their lawsuit in a timely manner. The lawsuit stemmed from Bank of America making hundreds of robo-calls to the Coniglios. Sometimes they received as many as 5 phone calls a day. Jason Coniglio, the parties’ son, stated “we would be out to dinner and they would ring my mother’s cell phone, then they would ring my dad’s cell phone and then when we got back to the house, there would be another message on the answering machine.” Their son, Jason, works as a mortgage broker. He diligently tried to help his parents get a mortgage modification. Unfortunately, he could never get anyone from Bank of America to cooperate with him. Their lawsuit was pursuant to the Telephone Consumer Protection Act. The damages were $500 per call and they were tripled. The Coniglios’ attorney stated “the borrowers, the people who own those phones, you do have a right to privacy. And when they say to stop, you have to stop.”
Bank of America had asked the court to reconsider this large award against them. However, the judge denied their request.
Conclusion
When banks misbehave, they can be punished by taking legal action against them.
Elliot Schlissel is a foreclosure defense lawyer. He represents families throughout the Metropolitan New York area who have problems dealing with banks related to mortgage modifications and foreclosure lawsuits.
Please click on the link below to watch today’s video blog:
Elliot S. Schlissel is a foreclosure lawyer representing homeowners throughout the Metropolitan New York area for more than 45 years. He regularly sues banks to set aside mortgages and help keep his clients in their homes. He and his associates can be reached at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.
The federal government has come up with a new plan to encourage individuals without significant funds to be able to buy homes. Under this new plan, prospective homeowners will be able to obtain mortgages with down payments as low as only 3% of the purchase price. There is a debate as to whether this is a good thing or a bad thing. These new 3% down payment mortgages are coming less than a decade after the tremendous housing collapse America recently experienced.
First Time Home Buyers
The purpose of the program is to help lure first time home buyers back into the housing market. Is a 3% down payment loan risky? If the individuals putting the 3% down and buying a home have set aside an emergency fund in the event they lose their job or become ill, it may be a good idea. However, this writer’s experience with individuals taking these type of loans is they do not have emergency funds. The 3% is usually all they have. Without an emergency fund, should the roof leak, the boiler go bad, or one of the family members lose their job, they will be unable to make the mortgage payments and the house will go into foreclosure.
A 20% Down Payment
Most conventional mortgages require a 20% down payment today. I also have problems with this level of down payment. Most young people coming into the housing market do not have the 20% down payment. A more reasonable down payment on a conventional mortgage would be 10%. Unfortunately, pursuant to a 2012 Center for Responsible Lending Study, it found even a 10% down payment would require the individuals purchasing a home with a 2010 median value of $158,000, would take 21 years for the average family to save this amount.
The American Dream
Owning a single family home is the American dream. An equilibrium must be found which will motivate and help young people to purchase homes while not putting them into a situation where they are overextended. Owning a home is one of the bed rocks young married couples have. This is the American dream and that dream must not be kept out of reach for young couples!
Elliot Schlissel is a foreclosure attorney. He represents clients who unfortunately fall behind on their mortgages and face the possibility of losing their homes in foreclosure.
To watch today’s video blog, please click on the link below:
Elliot S. Schlissel is a foreclosure defense lawyer. He and his associates have been helping homeowners stay in their homes for more than 45 years. His phones are monitored 24/7. Please call for a consultation at 516-561-6645, 718-350-2802 or send an email to schlissel.law@att.net.
A “zombie home” is a home which is no longer under the control of the owners, but the foreclosure case is still pending and therefore the bank does not have legal title or possession of the home.
Foreclosed Abandoned Homes
There are communities which have numerous foreclosed homes within them. Sometimes the homeowners abandon these homes. This has a negative effect on the tax base. The other homes in the area have their taxes go up as a result of this action. The abandoned homes fall into disrepair causing the homes surrounding them to lose value. When people drive through an area with abandoned homes, it creates a blight on the neighborhood. Zombie homes are a problem in many neighborhoods throughout the United States. It is estimated that as many as 20% of the homes in foreclosure are vacant.
Proposed New York Program
In States such as New York, where the foreclosure process is long, the issue of zombie homes becomes a larger problem. Attorney General Schneiderman in the State of New York is currently backing an idea of letting communities create land banks for the purpose of buying, refurbishing, and reselling abandoned homes. Attorney General Schneiderman has proposed legislation which would force lenders to maintain a property which has been abandoned after the start of the foreclosure lawsuit.
Maintenance Problems of Abandoned Homes
Homes that are abandoned often have significant maintenance problems. Pipes burst. The wood rots. The lawns sprout weeds. These homes create eyesores and create a blighted effect on the neighborhood.
Syracuse Land Bank Program
Katelyn Wright, the Executive Director of the Greater Syracuse Land Bank, recently stated “studies have shown that they [abandoned homes] have a dramatic negative impact on the property values for the homes in the surrounding vicinity, but also less dramatic but still notable for homes in a several block radius.” Katelyn Wright, as Director of the Greater Syracuse Land Bank, has been involved in dealing with abandoned homes in the Syracuse area. Syracuse experiences as many as 50 new abandoned homes each month. The Land Bank buys many of these homes for a very modest price using State, City and County funding. The homes are then either rehabilitated and put back on the market or, if they are not able to be rehabilitated, they are demolished. This is an example of how one community is dealing with zombie homes.
Elliot Schlissel is a foreclosure attorney who represents homeowners whose homes have been foreclosed on. He helps keep his clients in their homes and advises his clients not to abandon their homes.
Your Loan Modification Was Denied!
This is not the end of the world. To start with, even if your loan modification was approved, they may not have modified your loan to the point where you can afford to make the payments. If your loan modification is denied, you must litigate the foreclosure lawsuit. After submitting an Answer with affirmative defenses and countersuing the bank, you have an opportunity to make discovery demands upon the bank. You can request documents, financial records and other information from the bank with regard to the processes, procedures and what was involved in initiating the mortgage, having the financial documents moved from one bank to another, and bank policies and procedures. This will give you more information with regard to defending your lawsuit.
Banks can be sued within their foreclosure proceedings. This is called countersuing the bank. In the foreclosure lawsuit, the bank must present testimony and documentary evidence to support their claims. It is not uncommon for litigated foreclosure lawsuits to take three to five years to get through the court system.
Does Foreclosure Mean You Are Losing Your Home?
The answer to this is no! The foreclosure lawsuit is the start of a process by a financial institution to take back the home. If proper Answers with affirmative defenses and counterclaims are filed and discovery demands are made, the banks can be put on the defensive. No one is going to show up at your house and force you out into the street. The purpose of the foreclosure proceeding is for the bank to obtain a court order to sell your home. This is not an easy process. It takes a long time to get through the legal system. Using an experienced foreclosure defense lawyer can give you the security of knowing you will not be forced out of your home in the short run. Before a bank can take your home, they must get through your foreclosure defense law firm. I can tell you this is not an easy thing to do if you are represented by the right lawyer.
Do I Need A Lawyer To Help Me Litigate The Foreclosure Case?
The answer to this question is yes. In theory you can submit an Answer and represent yourself. However the law firm representing the bank usually brings hundreds of lawsuits against consumers. They usually have an expertise in foreclosing on homes and having the homes sold at auction on the courthouse steps. If you do not hire a lawyer, you will find yourself in an extremely disadvantaged situation. You will not understand the laws, the court rules, and the procedures involved in fighting a foreclosure case. Retaining a law firm who has fought hundreds of cases and has a successful record such as our law firm puts you in the best situation to keep your home, obtain a mortgage modification, and/or get the foreclosure lawsuit dismissed.
You Can Obtain A Mortgage Modification
You will have the opportunity to modify your mortgage under the auspices of the mandatory mortgage modification conference. New York requires, in all foreclosure lawsuits, a mandatory settlement conference on residential mortgage foreclosure cases. At the foreclosure settlement conference you will have an opportunity to apply for a mortgage modification. Even if you have already been turned down, you can apply for another mortgage modification under the supervision of the referees in the mandatory foreclosure settlement conference part in the courthouse.
To Avoid Default, You Must Answer The Summons And Complaint
A foreclosure lawsuit is initiated by the bank’s lawyers serving you with a Summons and Complaint. You can be served personally. The service can be on a person of suitable age and discretion at the residence. You can also be served by the process server leaving a copy of the Summons and Complaint at the residence and mailing you a copy. When you are served with a Summons and Complaint in a foreclosure you must file a written Answer. You must serve it on opposing counsel and file it with the Court within twenty days if served personally, or thirty days if served by any other means!
Mortgage Modification
You may be negotiating a mortgage modification with the bank. This does not change the fact you must respond to the Summons and Complaint by serving on opposing counsel a written Answer and filing it with the court. Negotiating a mortgage modification does not stop the foreclosure lawsuit from moving forward. If you don’t serve an Answer upon opposing counsel and file it with the court, the bank lawyers will take a default judgment against you. This will allow them to move forward with the foreclosure action without the court ever hearing as to whether you have a defense or wish to stay in your home.
Answering the Complaint
An Answer to the Complaint is a written response to the allegations in the Complaint. In addition to responding to what the bank states in their Complaint, you can submit affirmative defenses and you can also counter sue the bank. There are numerous requirements a bank must meet for their foreclosure lawsuit to go forward. Affirmative defenses can be alleged that the bank lacks standing to sue you, the bank does not have the original note and mortgage, the bank has violated truth in lending laws, the bank has failed to provide you with pre-foreclosure notice requirements, the bank was engaged in fraudulent activities, the person signing the documents is a robo-signer, and numerous other defenses. You only have to be successful with regard to one affirmative defense to stop the bank’s foreclosure lawsuit in its tracks!
