defective foreclosure lawsuits

JP Morgan $13 Billion Settlement for Bad Mortgage Practices

October 31, 2013 by Elliot S. Schlissel

For months now, JP Morgan Chase and the Justice Department have been in negotiations with regard to a settlement resolving federal allegations concerning the bank’s sale of faulty mortgage securities. The Justice Department’s position is the sale of these faulty mortgage securities was a major factor in the mortgage/real estate crisis in America. The $13 Billion penalty would be the largest penalty ever paid by a single institution. The Justice Department has been investigating JP Morgan Chase for many months with regard to its activities concerning mortgage backed securities. In the event this settlement is entered into, it would be a major win for the Justice Department. JP Morgan Chase is the largest bank in the country. This settlement will not stop the federal government from bringing criminal charges against JP Morgan Chase. However, the deal would end a New York State lawsuit brought by Attorney General Eric T. Schneiderman and an investigation in the State of California.

HSBC and Barclay’s Bank Fined Also

Attorney General Holder has in the past levied multimillion dollar fines against other large financial institutions which includes both HSBC and Barclay’s Bank.

JP Morgan seeks to resolve this investigation regarding its conduct in recent years. As a result of this investigation, the bank’s first quarter report showed a loss. This was the first quarterly loss for JP Morgan Chase in ten years. The bank’s Chief Executive Officer, Jamie Dimon, seeks to resolve these investigations into the bank’s conduct. With this in mind, he is taking a conciliatory approach in his dealings with regulators. He has stated that the problems JP Morgan is facing are “painful.”

In 2011, JP Morgan Chase was one of the eighteen banks sued by the Federal Housing Finance Agency. That suit was to recoup losses sustained by Fannie Mae and Freddie Mac with regard to bundled securities that were improperly underwritten as home loans.

Elliot Schlissel is a foreclosure defense lawyer. Elliot and his associates litigate foreclosure lawsuits and they help their clients obtain mortgage modifications. Elliot and his aggressive associates work hard to keep their clients living in their homes.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, defective mortgages, financial crisis, foreclosure, foreclosure attorney, foreclosure defense, mortgage modifications

Appearance at a Foreclosure Settlement Conference Considered an “Informal Appearance” and not a Default by the Mortgagor

October 7, 2013 by Elliot S. Schlissel

In a case of first impression, Justice Jack Battaglia sitting in Supreme Court Real Property Part in Kings County, New York, dealt with an issue as to whether the appearance by the mortgagor at the mandated Foreclosure Court Conference part in Kings County without submitting a formal written answer to the summons and complaint can be considered an informal appearance denying the financial institution the ability to claim the homeowner was in default.

In this case, the financial institution brought a summary judgment application to the Court. A summary judgment motion claims there are no issues of fact and therefore no trial is necessary. The basis for the summary judgment was the default by the mortgagor, Butler, in this proceeding. There were two prior applications by the financial institution but questions concerning the affidavit of service caused them to be denied. The Judge had the case sent over to the Foreclosure Settlement Conference Part for mandatory foreclosure settlement proceedings.

Mr. Butler made numerous appearances at the Foreclosure Conference Part. The judge questioned whether since Butler appeared in the action in the Foreclosure Conference Part, how could she be “in default” for purposes of entering a judgment on default. The Court took the position, under New York case law, what Butler made was called an “informal appearance” within the time specified in the Summons and Complaint.
This is covered by New York Civil Practice and Rules § 320(a). The judge therefore entered a decision that Butler was not in default. A motion to enter judgement based on default could not be granted since Butler was not in default. Butler had participated in court conferences pursuant to this informal appearance. It should be noted, Butler appeared twenty-five times in the Foreclosure Conference Settlement Part and several other times before the court. The financial institution’s application for a default judgment was denied.

Elliot S. Schlissel is a foreclosure defense attorney representing homeowners throughout the metropolitan New York area. Elliot and his staff of attorneys have been keeping homeowners in their homes for more than 45 years.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, defective mortgages, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, New York foreclosure attorney

Mortgage Servicing Agencies’ Failure to Perform Their Duties

September 26, 2013 by Elliot S. Schlissel

The Consumer Financial Protection Bureau is the new agency that is supposed to regulate mortgage servicing companies. In a recent review of mortgage servicing companies this agency found some services to be “sloppy” when dealing with transferring paperwork when loans are sold. They also found misapplication of payments on mortgages and the failure of mortgage servicing companies to pay the taxes on the homeowners’ homes on a timely basis.

Homeowners Don’t Know Whom They Are Supposed To Pay

When the average homeowner purchases his or her home they take out a mortgage. Often shortly after they take out their mortgage the mortgage is sold by one lender to another. The second lender thereupon hires a mortgage servicing company to service the loan. Sometimes, a few months later, the second lender sells the mortgage to a third lender. This leaves the homeowner unsure of where, and to whom, they should pay their mortgage. This causes consumers consternation as to whether they are making their payments to the correct entity and if they are receiving the full credit for their payments.

Consumers Financially Injured By Mortgage Servicing Companies

Tax payments on real estate are usually due and owing in December. There have been mortgage servicing companies that have delayed making these payments until January. When a mortgage servicing company pays the taxes in the following year, the homeowner loses the important tax deduction for the mortgage payment in the prior year. This causes the homeowner to pay higher income taxes due to the loss of this tax deduction.

The Consumer Financial Protection Bureau has set up a new mandated set of rules financial servicing companies must comply with. These rules go in effect in January of 2014. The purpose of these rules is to deal with issues that have come up during the mortgage loan modification process which have been exposed under the HAMP program. The following are a list of some of the problems that have been uncovered by this agency concerning mortgage services:

Abnormally long application processes.
The lack of quality control standards and the supervising of underwriters.
The failure to send out denial notices to homeowners.
The failure to have written policies and procedures related to mortgages.
Disorganization and understaffing by mortgage servicing companies.

Mortgage Modifications

Many homeowners have been living with the panacea that they can obtain a mortgage modification for their home under the HAMP program only to find out that only a small number of the applicants get final approval of mortgage modifications. Hopefully this agency will deal with the numerous problems that exist today.

Elliot S. Schlissel, Esq. is a foreclosure attorney who has published more than fifty (50) articles related to foreclosure defense.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings

Wells Fargo Sanctioned By Court For Bad Foreclosure Practices

September 20, 2013 by Elliot S. Schlissel

Justice Yvonne Lewis, sitting in Supreme Court in Kings County recently sanctioned Wells Fargo for “wantonly flagrant” bad faith involved in a residential foreclosure lawsuit. Justice Lewis in her decision stated that Wells Fargo had repeatedly frustrated the efforts by two brothers, Francis Ruggiero and Michael Ruggiero to obtain a mortgage modification. They continually demanded more and more financial information.

The Ruggiero brothers owned a home in East New York. They refinanced their home in 2006 with Wells Fargo. They fell behind in their mortgage in 2007. In May of 2007, Wells Fargo initiated a foreclosure action against them.

Court Settlement Conference

At a court settlement conference, the parties agreed to a three month trial mortgage modification. The Ruggerio’s made the first payment under the modification and then missed the next two. At subsequent settlement conferences, the Ruggerio’s claimed they had not been given a trial mortgage modification. Wells Fargo claimed they needed more information for a final determination on their mortgage modification for the Ruggerio’s. Wells Fargo, at the foreclosure conference, requested the Ruggiero’s make further payments under the temporary mortgage modification. However, every time the Ruggerio’s made the payments, they were rejected by Wells Fargo.

In the end, Wells Fargo denied the mortgage modification application. However they offered to modify the mortgage for $2,672.70 per month. This was $600 a month more than the amount under the trial modification by Wells Fargo.

There were further additional settlement conferences before the court. The Ruggiero’s submitted a further package of financial information to Wells Fargo but Wells Fargo took no action concerning this new information. Eventually, Wells Fargo said it would not offer a loan modification, but would reconsider if the Ruggiero’s again submitted a financial package. In the end Wells Fargo never approved a mortgage modification for the Ruggiero’s.

Lack Of Good Faith By Wells Fargo

Judge Lewis in her ruling stated the case is “replete with pervasive indicia of the plaintiffs lack of good faith, evidenced by conflicting information, a refusal to honor agreements, unexcused delays, unexplained charges and misrepresentations and sets forth, in no small measure, a failure to deal honestly, fairly and openly.” The Judge went on to state, “more to the point, it is irrefutable on the proof adduced that the defendants, despite being subjected to ten to twelve arbitrary submissions, successfully established their occupancy of the subject premises, successfully completed the plaintiff’s trial HAMP period, and submitted all required documentation in order to accord themselves a modified loan agreement in the amount of $2,061.50 which the plaintiff in turn, arbitrarily and capriciously increased by $611.20 under false pretenses without any justifiable basis, and ingenuously denied.”

Justice Lewis went on to state that the monetary penalty’s she was imposing on Wells Fargo was necessary because of Wells Fargo failure to comply with the HAMP program.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, mortgage modification, mortgage modification attorneys, mortgage modification denied, mortgage modification denied new york, Mortgage Modifications attorney

Foreclosure Lawsuit Dismissed

September 16, 2013 by Elliot S. Schlissel

In a recent case, Justice François Rivera sitting in the Supreme Court Foreclosure Part in Bronx County dismissed a foreclosure lawsuit brought by HSBC Bank as Trustee. In this case, HSBC claimed the homeowner had two mortgages on the property. Both mortgages were combined by a consolidation agreement. HSBC claimed the homeowner’s defaulted by not paying the mortgages. HSBC stated the mortgages were assigned by an Affidavit of Lost Assignment.

HSBC Seeks The Appointment Of A Referee To Sell The Property

HSBC brought an application to the Court. They sought to change the caption of the proceeding from the then current defendant, Brunson, and replacing her name with the co-administrators of her estate. It turns out that Brunson died two years before the action was commenced by HSBC. Simply speaking, HSBC sued the homeowner two years after the homeowner died. Judge Rivera took the position the entire lawsuit was a nullity from its very start. The application by HSBC to modify the caption could not be granted. The court’s decision was that the court didn’t have jurisdiction to even entertain the motion made by HSBC.

Conclusion

Banks shouldn’t sue dead people. Banks can only sue the Estate or the Administrators or Executors of an estate after someone dies.

About The Author

Elliot S. Schlissel, Esq. and his associates diligently and aggressively represent homeowners in mortgage foreclosure lawsuits. Elliot and his associates provide foreclosure legal defense in the courts throughout the metropolitan New York area.

Foreclosure Dismissed: No 90 Day Notice

September 9, 2013 by Elliot S. Schlissel

Justice Yvonne Lewis, sitting in the Supreme Court of Kings County, recently dismissed a foreclosure proceeding brought by LaSalle Bank. LaSalle Bank brought a proceeding to foreclosure on a mortgage against Deanne Legier and Joyce Legier. The bank claimed both of the defendants had been served with legal process (a summons and complaint) at the real property’s address in Brooklyn. Deanne claimed she had never been served with the Summons and Complaint. She alleged that she did not reside at the address where the Summons and Complaint was served. Although Joyce was served, Joyce did not give Deanne a copy of the Summons and Complaint.

The Court, in its decision, found New York Real Property Actions and Proceedings Law section 1304 contained a requirement that a lender must comply with prior to bringing a foreclosure proceeding. This section of law required a lender to give a borrower 90 days’ notice before bringing a foreclosure proceeding on what was called a non-traditional mortgage.

Judge Lewis found that LaSalle Bank failed to show it provided the defendant’s with a Notice of Default before demanding payment in full on the underlying mortgage loan. Judge Lewis’ decision stated LaSalle Bank did not “unequivocally show compliance with section 1304 of the New York Real Property Actions and Proceedings Law.” They merely stated in their paperwork Joyce Legier failed to raise a triable issue of fact in a Summary Judgment Motion. The Judge, in her decision, stated LaSalle Bank had to comply with a condition precedent prior to bringing its lawsuit or making a Summary Judgment motion. She dismissed the foreclosure proceeding! Banks must fully comply with statutory compliance before initiating foreclosure lawsuits.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure attorney, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, New York foreclosure defense lawyers

Part III: Bank Of America Had Been Sued For Improperly Handling Mortgage Modifications Before

September 6, 2013 by Elliot S. Schlissel

In 2012, Bank of America settled a lawsuit brought by a former employee of a contractor who worked with the bank. This employee had accused Bank of America of mishandling HAMP applications. The Bank has also settled two major Federal lawsuits related to improper foreclosures practices.

Consolidation of Lawsuits

The pending lawsuit against Bank of America is part of a consolidation of 29 separate suits brought against the bank. The lawsuits come from across the country and have been certified as a class action. The lawsuit deals with homeowners who received trial modifications, and made all of their payments on a timely basis. However these homeowners did not receive timely responses from the bank as to whether they would be given a permanent mortgage modification. Pursuant to the HAMP program, the initial trial period was supposed to last for three months. However with Bank of America, it often lasted much longer. The problem was that Bank of America, as well as other banks, refused to properly fund their mortgage servicing operations under the HAMP program. Unfortunately there was not sufficient government oversight of these programs to pick up these problems right away.

It is estimated there are 800,000 mortgages that would have qualified for HAMP mortgage modifications if Bank of America and other large financial institutions had properly funded the HAMP program and supervised the program in the manner in which it was intended. This program was intended to help homeowners during the mortgage crisis in America. Unfortunately, since it was a voluntary program that was underfunded, it did not accomplish its goal!

The Purpose Of The HAMP Program

The purpose of the HAMP program was for the government to give cash incentives to financial institutions to modify home mortgages pursuant to specific standards. This was supposed to provide a streamlined process to help the 4 million homeowners having difficulties in the United States. Instead of accomplishing its goal, Bank of America utilized this program as a means, pursuant to statements of former employees, to obtain as much money as possible from the struggling homeowners and then foreclose their homes. Under the program, buyers were supposed to make trial payments for three months. However in many instances, the trial payments lasted for as long as a year and sometimes even longer. After making as much as a year or more of trial payments, instead of the mortgage modification becoming permanent, the homeowners were denied mortgage modifications. To make matters worse, they then found they owed the difference between the amount of the payments under the trial modification and their original mortgage payments. The Bank of America employees, in statements they had given stated that many of them were given no training whatsoever with regard to the requirement of the HAMP program.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, mortgage modification, mortgage modification denial, Mortgage Modification new york attorney

Courts Impact On The Foreclosure Crisis

October 11, 2012 by Elliot S. Schlissel

Many foreclosure actions spend years tied up in court. This is caused by lenders losing the note. Lenders also have been guilty of sloppy record keeping, loss of documentation of their standing to sue and other violations of court rules and statutes.

Foreclosure lawsuits today, in many situations, are not initiated by the original lenders. The parties bringing the foreclosure action received the mortgages after a series of transfers. It is estimated, millions of mortgage notes have been lost or misplaced. For a lender to bring a foreclosure proceeding it must be the holder or the assignee of both the mortgage and the note.

Show Me The Mortgage Note Defense

Defense lawyers in foreclosure actions now utilize a “show me the note” defense. This has allowed defaulting borrowers to hold off the foreclosure proceeding from going forward while the foreclosing lender or servicing organization looks for the note. Sometimes while looking for the note, they ascertain they do not physically hold the note and they cannot find out where it is.

How Courts In New York Handle Cases Involving Lost Mortgage Notes

Courts in New York can proceed with foreclosure proceedings even without a mortgage note. To accomplish this, the lender must show to the Court it owns the note. They must present to the Court the facts preventing the production of the note and present to the Court the terms of the note. The lender has to provide the Court with a detailed explanation of the note’s chain of transfers. This is to prove that the prior note holders had the intention to transfer the mortgage and that the current note owner is the rightful recipient of the mortgage.

Financial Institutions Proving Ownership Of The Notes

For financial institutions to prove the ownership of the note they must produce a valid assignment of the note or, in the alternative, they must show the note was physically hand delivered to them. Determining what actually constitutes the physical delivery of the note may vary on a case to case basis.

Lost Mortgage Notes

If the lender can demonstrate to the Court it owns the note it then must provide the Court with a logical explanation of why the note was lost. The lender has the burden of proving the terms of the lost note. To prove this, the lender must provide the Court with information concerning the name of the last holder of the note, the name of the borrower, the name of the person who signed on behalf of the borrower, the type of note, the effective date of the note, the value of the note, the payment terms of the note, the loan number and currently how much is unpaid under the note. The person providing evidence of this information must have personal knowledge of all of this information.

Conclusion

Lenders have heavy burdens to meet before they can successfully bring foreclosure proceedings in New York State Courts when they can’t produce the note or provide documentation of the assignment of the note.

Filed Under: Current Events, Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: Bankruptcy mortgage modification, defective foreclosure lawsuits, defective mortgages, financial crisis, foreclosure, foreclosure attorney, foreclosure crisis, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, mortgage modifications

Home prices are down! Interest rates are at an all time low!! But can you get a loan?

July 31, 2012 by Elliot S. Schlissel

Mortgage rates have reached all time lows. Unfortunately, the mortgage crisis in American has made it extremely difficult for the average American to qualify for these low interest mortgages.

A number of years ago, during the housing boom, if you were breathing and you walked into a mortgage brokers office, you could walk out with a mortgage. Today, only the most highly qualified perspective homeowners can obtain mortgage financing. Recent data from the Federal Reserve System shows more than 25% of all Americans who apply for mortgage loans are being rejected.

Lawrence Yun, the chief economist for the National Association of Real Estate Brokers, recently stated “good borrowers with one or two blemishes on their credit are being denied credit.”

Statistics regarding credit scores concerning Fannie Mae and Freddie Mac financed loans show the average credit score to qualify for a loan has increased from 720 to 760. For Federal Housing Authority loans the average score has increased from 660 to 700.

Down Payments

Today it is necessary that a perspective mortgage borrower have between 15 and 20% of the total cost of the home to qualify for obtaining a mortgage. It should be noted during the boom year in the real estate market all a prospective borrower needed to buy a home was a down payment of Zero!

About the Author

Elliot Schlissel, Esq. is an attorney who assists clients in real estate related matters. He is a former president of the Commercial Lawyer’s Conference of New York. He currently represents numerous individuals throughout the Metropolitan New York area in a variety of foreclosure defense lawsuits and mortgage modification applications.

Filed Under: Current Events, Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, defective mortgages, financial crisis, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure related bankruptciy, long island bankruptcy attorney, mortgage, mortgage modification, mortgage modifications, New York foreclosure attorney

Should You Buy A Foreclosed Property?

July 23, 2012 by Elliot S. Schlissel

In foreclosure situations the bank brings a foreclosure action against a home owner. Sometimes, after many years, the bank successfully takes title of the home. They evict the family who lived in the home. There can be significant financial benefits from buying a foreclosed home. However, there are also a variety of potential drawbacks.

Was The Home Properly Maintained?

If a homeowner was unable to make his or her mortgage payments there is a substantial possibility that the home was not maintained very well. Homeowners who can’t make mortgage payments don’t improve their homes and often don’t fix things that break. There is also the possibility that the homeowner, when he was being evicted, engaged in malicious conduct damaging the home.

The following is a list of things you should look for before purchasing a foreclosed home:

Is the home neat and clean? Sometimes bank foreclosed homes have been sitting empty for long periods of time. No maintenance or cleaning has been done and the houses have fallen into disrepair.
Is the home legal? Sometimes homeowners modify, extend, and change their homes without getting the appropriate approval from their local building departments. This makes title unmarketable. In the foreclosure process whether the title is marketable or not does not come up. However if you buy the home and thereafter you decide to sell it you will be responsible for legalizing the home. This can involve thousands of dollars of modifications, application fees and legal work.
Has the home lost electricity? If the home was vacant for a long period of time and the electricity was cut off this can have a negative impact on the electrical appliances in the house.
Water damage. If there have been leaks in the home while it was empty it is possible that the home has suffered from water damage.
Low quality upgrades to the house or poorly done repairs. Sometimes the homeowners are short on money, they take short cuts when the upgrade, modify or repair their homes. The expression “A stitch in time saves nine” may apply in these cases. These poorly done upgrades or repairs may not last very long.
Overgrown property. Homeowners who can’t afford to maintain their homes often fail to maintain their yards and lawns. The property may be overgrown and/or may require extensive landscaping.
Vandals. Homes that are empty have a higher propensity to be vandalized than homes that are occupied residences. Vandalism can involve individuals breaking in to homes, breaking windows, damaging walls, and removing pipes in the basement to sell the copper or brass.

Although there are bargains to be had in buying foreclosures, be careful! You should carefully inspect the home before purchasing it. It is suggested that, you have an engineer write an engineering report on your home before buying a foreclosure. The price may be cheap on a foreclosed home but the real question is have you bought a bargain or a money pit!

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: bankruptcy, defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, foreclosure related bankruptciy, mortgage modification, mortgage modification attorneys, mortgage modification denial, mortgage modification denied, mortgage modification denied new york, mortgage modifications

JP Morgan $13 Billion Settlement for Bad Mortgage Practices

Appearance at a Foreclosure Settlement Conference Considered an “Informal Appearance” and not a Default by the Mortgagor

Mortgage Servicing Agencies’ Failure to Perform Their Duties

Wells Fargo Sanctioned By Court For Bad Foreclosure Practices

Foreclosure Lawsuit Dismissed

Foreclosure Dismissed: No 90 Day Notice

Part III: Bank Of America Had Been Sued For Improperly Handling Mortgage Modifications Before

Courts Impact On The Foreclosure Crisis

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