Mortgage Modification

New Federal Mortgage Disclosure Requirements

May 14, 2014 by Elliot S. Schlissel

The Consumer Financial Protection Bureau has propounded new mortgage disclosure requirements. Financial institutions and mortgage lenders will need to provide individuals and families who take out mortgages with much more detailed disclosure material at the time of closing on the loan. The new disclosure requirements replace the existing Truth in Lending Statements, HUD-1 Settlement Statements and the present Good Faith Estimate Disclosure Statements required to be provided by financial institutions.

Three Business Day Requirement

All individuals applying for loans must receive, under these new requirements, loan estimates within three business days. These loan estimate disclosure documents must provide the specific loan terms and the estimated expenses the borrower will incur at the time of closing on the transaction. A second additional disclosure statement will also have to be provided to the individuals taking out a mortgage within three business days before the actual closing takes place. This disclosure document will need to provide a detailed accounting of all aspects of the mortgage loan transaction.

Effective Date August 1, 2015

The new rules promulgated by the Consumer Financial Protection Bureau will go into effect on August 1, 2015. All loans processed after that date will require the dual disclosures discussed above.

Financial institutions and mortgage companies have been modifying their procedures to deal with these new rules and regulations that will go into effect in approximately a year and a quarter. These changes to the disclosure requirements which providers need to give consumers, are the most significant changes and modifications regarding mortgage loan disclosures that have taken place in decades. It is hoped that these new disclosure requirements will educate consumers as to how much they are borrowing, how much it will cost them, and whether they can afford to take the mortgage they seek to obtain.

Elliot S. Schlissel is a foreclosure attorney. He has helped scores of New Yorkers stay in their homes and fight off foreclosures. Elliot and his staff of attorneys also assist their clients in filing Chapter 7 bankruptcies, Chapter 13 bankruptcies, and applying for mortgage modifications. Elliot’s greatest satisfaction is when he can help the families he represents continue to live in their homes.

Mortgage Lenders: Are There Differences Between Them?

April 14, 2014 by Elliot S. Schlissel

The first thing most prospective homeowners think about with regard to a mortgage is, what will be the interest rate? Obviously, the lower the interest rate, the less the mortgage will cost the consumer. However, there are other important issues to think about when applying for a mortgage.

What Type of Institution is Best For You to Deal With

Large national banks in some areas of the country dominate the mortgage marketplace. Examples of these types of banks are, JP Morgan Chase, Citibank, and Bank of America. Large financial institutions set their own guidelines with regard to underwriting requirements for mortgage loans. Most large financial institutions do not pay commissions to third party mortgage brokers. This brings the cost of obtaining a mortgage from a large financial institution down. These banks will, if you take a mortgage out from them, provide you with incentives such as paying you higher rates of interest on savings and checking accounts. If you deal directly with a large banking institution, you should try to develop a rapport with the individual at the bank handling your transaction. This will be helpful to you should there develop problems in the underwriting process.

Online Financial Institutions

The internet provides its own marketplace for financial institutions to advertise regarding mortgage loans. Online financial institutions are better suited to refinancing mortgage loans than initiating mortgage loans on the purchase of a home. Sometimes problems arise when dealing with online lenders because they are not located in the community and may not be familiar with the problems in the local real estate market. There is a benefit from dealing with a financial institution on a face to face basis.

Do You Need a Mortgage Broker?

Mortgage brokers are not technically working for a financial institution. They are middlemen who usually work on a commission basis. They may have contacts with a number of lending institutions. They can be helpful to you with regard to properly filling out the necessary forms required in a mortgage application. They also may be in a position to shop around for the best deal you qualify for. In special situations where you have a problem related to your property or your property is of a unique nature they may be able to find a financial institution to specifically fit your needs. They can also run interference for you with the financial institution and eliminate some of the busy work you may need to do with a direct lender. You should take into consideration however, since they are a middleman, and they will be working for commission, they may bring up the cost of the acquisition of your mortgage.

Conclusion

The purchase of a single family home is usually the largest transaction an individual or family will be involved in. Care should be taken when applying for a mortgage to see that the type of institution and deal you are offered is the most appropriate one for your particular circumstances.

Elliot S. Schlissel is a foreclosure defense lawyer. Elliot has published several hundred articles with regard to foreclosures, mortgage modifications, and other real estate issues. Elliot and his staff of attorneys represent homeowners having financial difficulties and who face foreclosure lawsuits in the Metropolitan New York area. Elliot and his attorneys have developed an expertise in dealing with financial institutions, helping their clients obtain mortgage modifications, and stopping financial institutions from successfully foreclosing on their homes when they fall behind on their mortgage payments. He offers free consultations to prospective clients.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure attorney, mortgage modification, New York foreclosure attorney, real estate

The Facts About Home Loans in Today’s Home Mortgage Market

April 9, 2014 by Elliot S. Schlissel

Obtaining a mortgage is becoming a bit easier. Credit scores required by financial institutions to qualify for a mortgage loan have been coming down. The average credit score for loans that have recently closed is down to approximately 730. This is on a scale which ranges between 300 and 850. Only a year ago, you would have needed a credit score of a minimum of 750 to qualify for a mortgage to purchase a home. You should note, that although the average credit score is approximately 730 on home loans which have recently closed, there are some financial institutions that are now offering mortgages to individuals with credit scores as low as 700. This allows more potential homeowners to have the opportunity of purchasing the American dream, a single family home.

What Are Loan to Value Ratios?

When a bank underwrites a mortgage loan application, one of the significant items they look into is called the loan to value ratio. The loan to value ratio compares the appraised value of your home to the amount of money you seek to borrow. An example of loan to value ratio is, let’s say you wanted to purchase a home that cost $400,000. If you had enough money for a 20% down payment, which would be $80,000, the loan to value ratio you would be looking for would be 80%. This simply means you wanted to obtain a mortgage of 80% of the value of the home.

Debt to Income Ratios

When banks underwrite a mortgage loan, they look into how much money you are earning. In today’s mortgage market, they only count the funds that appear on your income taxes. Money made off the books, which doesn’t appear on a tax return, will not be considered by a financial institution when underwriting a mortgage. The debt to income ratio is sometimes referred to as “DTI”. There are actually two components of the debt to income ratio. The first component is called the “front end” debt to income ratio. This represents the percentage of your total monthly income you will have to utilize to make your mortgage payment. The second debt to income ratio is referred to as the “back end DTI”. The represents the percentage of your total gross monthly income you will pay towards your mortgage plus all other debt obligations. This would include car payments, personal loans, money owed to American Express, Mastercard, Visa, gas station credit cards, store credit cards, and all other financial obligations.

Let’s look at an example of debt to income ratios. Let’s assume your total family income is $8,000 per month. For this example, let’s use a mortgage payment of $2,000 per month and other financial obligations of an additional $2,000 per month. In this example your front end debt to income ratio would be 25% and your back end debt to income ratio would be 50%. Banks are currently using front end debt to earnings ratios of 25% and back end debt to earnings ratios of approximately 38%. These are more liberal percentages than banks were using approximately a year ago.

Conclusion

Although the easy money days regarding mortgage financing are gone, banks are now being more reasonable with prospective homeowners with regard to loosening their standards to obtain mortgages.

Elliot Schlissel is a foreclosure attorney. For more than 45 years, Elliot and his associate attorneys have been litigating all types of real estate and foreclosure cases. Elliot’s goal is to help his clients stay in their homes and fight off foreclosure lawsuits brought by financial institutions. He also assists his clients in obtaining mortgage modifications on their homes.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure defense, foreclosure proceedings, mortgage, real estate

Reducing Your Mortgage

April 7, 2014 by Elliot S. Schlissel

foreclosure defense lawyer Let’s assume for the purpose of this article you own a house and you have a mortgage on your house. Your mortgage may be a 15 year mortgage or it may be a 30 year mortgage. Is there a way you can reduce the term of the mortgage from either the 15 year period or the 30 year period? The answer to that question is yes.

Reducing Your Mortgage Payments

One of the most well known ways of reducing your mortgage payments is to make 13 mortgage payments per year instead of 12. This theory of making an additional mortgage payment once a year has been around for a considerable period of time. What is the best time to make the additional mortgage payment? Experts recommend the additional mortgage payment be made in the month of January. It is estimated if you have a 30 year mortgage and you make 2 payments in the month of January of each and every year, you will reduce the term of your 30 year mortgage to 26 years.

So, how do you find the money to make this extra payment? If you celebrate Christmas or Hanukkah in the month of December, you may be deeply in debt by the month of January. There are two ways of accumulating funds to make this extra mortgage payment. The first is, if you receive a bonus, utilize the bonus to make the extra mortgage payment. The second method is file your tax return early, get your refund quickly and use your tax refund for that extra January mortgage payment.

Lowering Interest Rates

Interest rates on home mortgages fluctuate based on numerous economic factors. You should be aware of the interest rate you are paying on your mortgage. Periodically you should review newspapers or online websites and determine what the current interest rates are. If the current interest rate is more than a point and a half lower than what you are currently paying on your mortgage you should consider refinancing. Over the long run refinancing your mortgage payments may save you tens of thousands of dollars.

Conclusion

Almost all homeowners who purchase a home borrow money from financial institutions for the acquisition of their home. Once the money is borrowed, the mortgage payments start. It is prudent to make those mortgage payments end as quickly as possible.

Filed Under: Foreclosure, Mortgage Modification Tagged With: foreclosure, mortgage, Mortgage Modifications attorney

No Right to A Mortgage Modification

March 24, 2014 by Elliot S. Schlissel

foreclosure defense attorney A foreclosure proceeding was brought in Suffolk County before Supreme Court Justice Jerry Garguilo. Rivera had executed the mortgage and the personal obligation and he had failed to make his mortgage payments in a timely manner. Rivera had applied to Aurora Loan Services for a mortgage modification. They had taken the position he did not qualify for a mortgage modification.

It Is Alleged The Mortgage Company Acted in Bad Faith

Rivera brought a proceeding before Judge Garguilo claiming that Aurora Loan Services had acted in bad faith because they failed to offer him a mortgage modification or any other agreement to allow him to keep his house from being foreclosed on. It was presented to the court that Rivera was in bad health and could not appear in court. Rivera had a son-in-law by the name of Saburro. He was a loan officer. He came to court and testified Rivera was in bad health and that is why he did not appear in court. Saburro also testified Aurora Loan Services had repeatedly offered Rivera trial mortgage modifications. And at the end of each mortgage modification they would pull the rug out from under Rivera and advise him the mortgage modification was not going to be made permanent.

Judge Holds No Bad Faith

Justice Garguilo found that there were no trial mortgage modifications made. Judge Garguilo took the position the foreclosing bank has no obligation to modify a mortgage. Aurora’s failure to offer Rivera a mortgage modification was not unconscionable and it did not amount to bad faith. Aurora simply had no legal obligation to give Rivera a mortgage modification. It was a totally discretionary decision on their part. Judge Garguilo went on to state in his decision “it was clear the case was not one where a lender wrongfully accepted large sums of money and then refused home retention relief.” The court therefore ruled Aurora Loan Services did not act in bad faith because they did not provide Rivera with a mortgage modification.

Elliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the Metropolitan New York area whose homes have been foreclosed on by financial institutions.

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

Qualifying for a Mortgage

February 26, 2014 by Elliot S. Schlissel

foreclosure defense attorneys The purchase of a single family home is usually the largest single purchase made by Americans during the course of their lifetime. Before you can purchase a home, it is strongly suggested you look into your ability to qualify for a mortgage to help you pay for the home. There are a number of significant factors taken into consideration by financial institutions when underwriting a mortgage.

Are You Employed?

The underwriters of mortgages at financial institutions are interested in your employment history. They are especially interested in if you are currently employed. If you are self employed, the underwriters may want detailed information about the capacity in which you are self employed. If you are working for a company or business, they are going to ask you questions as to how long you have worked in this position for, and what were your prior positions. It is especially important that you maintain good records concerning your past three years tax returns, bank statements concerning your checking and savings accounts, pay stubs and other material necessary to verify your employment history.

The Down Payment

If you are looking to obtain a conventional mortgage, most banks will loan you up to 80% of the cost of the house. This means you will have to come up with 20% of the funds on your own. In cases where you have a problematic credit history, you may need to put down more than 20% of the cost of the house as a down payment.

Closing Costs

There are numerous closing costs related to buying a home in New York. There are bank fees. There are underwriting fees. There are points payable to the bank. There are attorneys’ fees for your attorney and the attorney for the financial institution. There is the prepayment of taxes on the house. There is the payment of casualty insurance on the house. You will have to reimburse the seller for all of the oil in the oil tank. In addition, there are numerous other types of closing costs. It is estimated that closing costs in New York will run anywhere from $5,000 to $15,000 to purchase a home. You should carefully look into the closing costs with the attorney representing you on the real estate transaction.

Credit Scores

The financial institution will order credit reports for those individuals whose names will appear on the mortgage of the home. You should obtain a copy of your credit report in advance. In the event there is inaccurate information on your credit report, you should immediately take action to correct this. In the event your credit score is not high enough to meet your bank’s requirements to obtain a mortgage, there are a variety of things you can do to boost your credit score prior to submitting a mortgage application.

The Mortgage Loan Application Process

The process of obtaining a mortgage loan can be aggravating for the prospective homeowners. Financial institutions currently are asking for significant amounts of information from a prospective homeowner to determine whether you are a good risk and that you have the ability to repay your mortgage loan. Hopefully this article will open your eyes as to the various areas you should look in before contacting a financial institution and starting the process of trying to obtain a mortgage.

Elliot Schlissel has been representing clients in real estate related matters for more than 45 years. Elliot and his staff of attorneys represent homeowners who are buying and selling homes. In addition, Elliot and his staff of attorneys provide foreclosure legal defense for their clients.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure defense attorneys, Mortgage Modifications attorney, real estate

Hidden Expenses When Buying A Home – Part II

February 13, 2014 by Elliot S. Schlissel

foreclosure defense attorney Renovations to the Home

It is usually necessary for new homeowners to do small to moderate renovations to their new home. Things such as painting, changing fixtures, modifying kitchens and bathrooms, can amount to tens of thousands of dollars very quickly. It usually costs homeowners anywhere from 1 to 2% of the purchase price of a home to do minor modifications or renovations to the home to make it more livable and/or suitable for their life.

New Appliances

So you have just bought your new home. When you look at your kitchen, do you really want all of the old appliances? If you are going to buy new appliances, this is the right time. However, appliances are not inexpensive. Purchasing new appliances or upgrading old appliances can run into thousands of dollars.

Termite Inspections

If your home is made of wood, you need to have a termite inspection. Termites have been around since the beginning of time. In many areas of the country, forests were originally cut down to make room for the development of communities. When they cut the forests down, the termites didn’t leave. They went into the ground and they feasted on the new homes that were built.

A large portion of the homes in the northeast of the United States during the course of their lifetime will be subject to termite infestation. Before purchasing a new home it is important you have a termite inspection to make sure your home is termite free. If termite damage exists, the termite damage should be repaired before you close on the purchase of your home. In addition to termites, there are other wood destroying insects that you need to be concerned with. Carpenter ants also can cause significant damage to homes. The cost of termite inspections and/or repairing the damage done by termites can be an unforeseen expense when purchasing a new home.

Escrow for Taxes and Insurance

When you close on a home, the bank will usually require you deposit a certain amount of money in escrow related to your annual tax and insurance payments. Banks require 1/12 payments each month to be made by the homeowner related to the hazard insurance costs on their property and the real estate and school taxes that are due on their property. At the time of closing, banks normally pick up at least one month’s taxes in advance and the balance of the month from the date of closing until the first date of the next month.

Elliot Schlissel and his associates are foreclosure defense lawyers. They litigate foreclosure lawsuits on behalf of homeowners and help them obtain mortgage modifications. Elliot and his associates have been helping homeowners keep their homes for more than 45 years.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: costs of purchasing a home, foreclosure, mortgage modification, New York foreclosure attorney, real estate

Hidden Expenses When Buying A Home – Part I

February 10, 2014 by Elliot S. Schlissel

There is a common misunderstanding with regard to the total of all expenses new homeowners are exposed to when they purchase a home. Homeowners often believe all they have to do is put the down payment down, get the balance of the funds for the mortgage from a bank, and this will be sufficient to purchase a home. However there are numerous other expenses prospective homeowners face when purchasing a home.

Down Payment

I’ve already mentioned the down payment. In most real estate transactions, the homeowners puts 10% of the purchase price down at contract, and an additional 10% at the time of closing. This amounts to a total of 20% of the purchase price. If the homeowners are obtaining a Federal Housing Authority (FHA) mortgage, their down payment may be as little as 5% to 10% of the purchase price of the home.

Engineering Inspection

A home is the largest purchase a family will make during the course of their lifetime. Before jumping into the purchase of a home, it is usually necessary to have an engineer do a thorough inspection of the home to make sure the roof doesn’t leak, the electrical system is adequate, the plumbing doesn’t leak, the foundation is secure and numerous other items in the home are in good condition. Home inspections can cost anywhere from $500 to $600 in the Metropolitan New York area by qualified engineers.

Expenses of Moving

When a family moves into a home, they usually hire a moving company to help them pack up their possessions and move them to their new home. Moving expenses can cost a homeowner anywhere from $1,500 to $6,000. If the move is cross country, or over a long distance, it could cost significantly more.

Elliot Schlissel is a foreclosure attorney representing homeowners in the buying and selling of homes, and fighting foreclosures when banks seek to take their homes away from them. In addition, Elliot Schlissel and his attorneys assist homeowners in obtaining mortgage modifications and to avoid losing their homes in foreclosure proceedings.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: costs of buying a home, foreclosure, foreclosure attorney, foreclosure defense attorneys, mortgage modifications, Mortgage Modifications attorney, New York foreclosure defense lawyers

New York’s New Mortgage Proposal

January 22, 2014 by Elliot S. Schlissel

New York is considering a new proposal which would provide an incentive for banks to modify mortgages on homes which are under water. Under this new proposal, the financial institutions would reduce the amount of the mortgage on homes under water. The mortgage amount would then be brought into conformity with the value of the home. In exchange for the reduction in the mortgage, the bank would be entitled to share in the profits if the home eventually increases in value and is sold. This new proposal will require changes in various state regulations. Under the current law, banks cannot enter into these types of arrangements with homeowners.

Governor Cuomo Backs New Mortgage Proposal

Governor Andrew Cuomo stated this initiative will help keep families in their homes and out of foreclosure, while at the same time reducing potential loses for investors. He went on to further state with regard to this new proposal “that’s good for homeowners, good for local neighborhoods, and good for the long term strength of the housing market.”

Unfortunately, pursuant to existing federal rules and regulations, the large majority of home loans in New York cannot qualify under this program. This is because Fannie Mae and Freddie Mac, the two federal agencies which purchase mortgages for approximately two-thirds of all home loans in the State of New York, do not allow forgiving outstanding mortgage balances.

The new proposed program would be available to homeowners who owe more on their homes than their homes are worth and have tried to obtain mortgage modifications and have been unsuccessful. Under this program, banks would provide disclosure to the homeowners concerning the terms of the new loan modifications and how much of the profits the bank would receive upon the sale of the home. The proposal would limit the bank to either 50% of the increase in value in the home or the total amount forgiven under the mortgage, whichever is less.

Homeowners Reluctant to Share in Appreciation

Interviews with a number of homeowners with regard to this new proposal, indicated they were reluctant to share in the appreciation of their homes with banks.

Conclusion

The program is an excellent idea. Homeowners whose homes are under water and are behind on their mortgage would be given a second chance to stay in their homes and have their mortgage modified to a realistic amount they could afford.

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

Squatters Rights to Foreclosed, Vacant Homes

January 16, 2014 by Elliot S. Schlissel

There is a misunderstanding that squatters can walk into foreclosed homes which are vacant and end up the owner of the homes. What squatters refer to concerning extra-legal possession of homes actually refers to the legal concept of adverse possession. Adverse possession deals with openly and notoriously being in possession of property, in the State of New York, for a period of ten years. In the appropriate circumstances, should the squatter live openly and notoriously in the vacant home for ten years, they can claim ownership of the property.

Squatting Equals Trespassing

The theory of adverse possession actually deals with property boundary disputes. Under adverse possession theory, the boundary between neighboring properties can be changed if one owner has utilization of the other owner’s property around the boundary line for a period of ten years.

Squatters sneak into homes when no one is around. This is usually undertaken by vagrants or homeless people. Adverse possession of the home can only be claimed if the squatter lives openly and notoriously for a period of ten continuous years in the residence.
What most squatters are doing is trespass on someone else’s property. Sometimes during foreclosure cases, homes are vacant for a period of time. This period of time will usually not last ten years, the period of time necessary for a squatter to claim open and notorious adverse possession rights to a property.

Former Owners Remaining in the Home

In a foreclosure proceeding, the home in the State of New York can be sold on the courthouse steps. At the time of the sale, the homeowner whose home is being foreclosed upon will most likely still be living in the home. After the sale takes place, the new owner of the home can bring a landlord tenant case to evict the former homeowners from their home. The failure of the homeowners to move from the house after it is sold, in foreclosure, does not create an adverse possession situation. Eviction proceedings can be time consuming. During the course of the eviction proceeding, the former homeowners would be entitled to stay in their home until such time as the court grants an order forcibly removing them from the home.

Conclusion

Squatting in an abandoned, foreclosed home and creating ownership rights based on the legal theory of adverse possession is unlikely to happen!

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: adverse possession, foreclosure, foreclosure defense, foreclosure proceedings

New Federal Mortgage Disclosure Requirements

Mortgage Lenders: Are There Differences Between Them?

The Facts About Home Loans in Today’s Home Mortgage Market

Reducing Your Mortgage

No Right to A Mortgage Modification

Qualifying for a Mortgage

Hidden Expenses When Buying A Home – Part II

Hidden Expenses When Buying A Home – Part I

New York’s New Mortgage Proposal

Squatters Rights to Foreclosed, Vacant Homes

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