defective foreclosure lawsuits

Foreclosure Dismissed, Bank Fails To Show It Was The Holder Of The Note

July 18, 2015 by Elliot S. Schlissel

Justice Francois Rivera, sitting in the Real Property Part in Supreme Court, Kings County, recently dismissed a foreclosure case brought by Loancare against Mr. Coleman.

The foreclosure lawsuit claimed Coleman had failed to make payments on the note and mortgage. It further claimed he took no action to cure the default. Coleman submitted an Answer which contained seventeen affirmative defenses. One of the affirmative defenses was that the bank lacked standing to bring this lawsuit.

Justice Rivera noted in his decision, before commencing a foreclosure lawsuit a plaintiff must have a legal or an equitable interest in the mortgage.

Transfer of the Mortgage

Coleman initially had given a mortgage to Lend America. Lend America executed and delivered the mortgage and note to Mortgage Electronic Registration Systems, Inc., (hereinafter referred to as “MERS”) as Lend America’s nominee.

When Loancare brought the lawsuit, they did not claim or prove that Lend America delivered the note to MERS. Therefore MERS was never the holder of the note. Since they didn’t have the note to begin with, they couldn’t assign it! Since MERS couldn’t assign it to Loancare, Loancare never became the holder of the note pursuant to a written assignment prior to initiating the foreclosure lawsuit. In addition, Justice Rivera pointed out in his decision Loancare did not allege the facts and circumstances as to who and which entity physically delivered the note.

Justice Rivera therefore decided Loancare did not establish a prima facie case that it was the holder and/or assignee of the note and mortgage. Justice Rivera therefore dismissed the lawsuit based on the fact the plaintiff had no standing to bring this foreclosure proceeding.

Conclusion

Submitting an appropriate Answer with numerous affirmative defenses and especially alleging lack of standing, is very important when responding to a foreclosure lawsuit. If Coleman had failed to allege lack of standing in his Answer, he would have waived this affirmative defense and Loancare would have been successful in obtaining a judgment of foreclosure and selling Coleman’s home.

Elliot S. Schlissel is a foreclosure attorney who helps homeowners fight foreclosure lawsuits and stay in their home.

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

Various Fraudulent Mortgage Transaction Issues – Part II

June 22, 2015 by Elliot S. Schlissel

Fraudulent Mortgage Assignments

There are a variety of types of fraud which banks engage in related to the assignment of mortgages. Sometimes the assignment contains signatures of individuals claiming to be corporate officers of the bank and/or mortgage company when in fact they were never employed by these institutions. On other occasions, mortgage assignments are signed by individuals who claim to be corporate officers of financial institutions which went out of business or filed bankruptcy many years earlier. There are also many examples of assignments of mortgages which are notarized by notaries who were actually in a different state at the time of the transaction. These notaries never witnessed the signatures of the individuals they notarized.

Ownership of the Note and Mortgage

There is a United States Supreme Court Case which stands for the proposition the foreclosing institution must own the note and mortgage at the time of the initiation of the foreclosure lawsuit. The case is Carpenter v. Longan, 83 U.S. 271. In this case, the United States Supreme Court stated “plaintiff failed to show that it owned the mortgage at the time the complaint was filed.” As a result the court ruled the plaintiff financial institution did not have standing in the foreclosure case. The financial institution must not only be the holder and owner of the original note, but also must be the holder and owner of the mortgage as well. In Carpenter v. Longan, the United States Supreme Court held the plaintiff lacked standing to initiate and prosecute the foreclosure case and therefore the case was dismissed.

Elliot S. Schlissel, Esq., is a foreclosure lawyer representing homeowners throughout the Metropolitan New York area. He defends homeowners whose homes are subject to being foreclosed upon. He also helps homeowners obtain mortgage modifications.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, defective mortgages, foreclosure defense, foreclosure proceedings, fraudulent foreclosure practices, fraudulent foreclosure transactions

Various Fraudulent Mortgage Transaction Issues – Part I

June 19, 2015 by Elliot S. Schlissel

Phony Appraisals

Many fraudulent mortgage transactions start out with the appraiser coming back with an inflated value of the home for which the purchaser seeks to obtain a mortgage. In cases where the purchaser actually couldn’t afford the home to begin with, the mortgages they were offered were mortgages involving negative amortization. Negative amortization refers to a situation where instead of paying down the mortgage, a portion of the interest gets added to principal and the homeowner ends up owing more money than they started out borrowing.

Truth in Lending Law Violations (“TILA”)

The Truth in Lending Law requires banks to abide by a certain ethical code of conduct. Predatory lending is defined under the Truth in Lending Law as any pattern of conduct in which the actual lender is hidden through subterfuge. Violations of the Truth in Lending Law allow the damaged party to recover their attorney’s fees, and treble damages.

When purchasers attend a closing they sign numerous documents. The two most significant documents are the note and the mortgage. The note is an I Owe You. It is documentation that a debt exists. However, the evidence of the existence of the debt is subject to being rebutted. The mortgage creates a lien pursuant to a written contract. The contract is a contract to enforce the note. If the note is invalid, is unenforceable or can be rebutted, in theory, the mortgage should be able to be set aside. Unfortunately, the courts in New York currently do not see things this way.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure attorney, foreclosure defense lawyers, fraudulent foreclosure practices, fraudulent foreclosure transactions

Ocwen Financial Corporation Fined $150 Million Dollars

May 21, 2015 by Elliot S. Schlissel

Ocwen Financial Corporation, the largest sub prime mortgage servicing company in the United States, has entered into a consent order with the State of New York to pay $150 million dollars to New York homeowners and to modify and reform its practices concerning the servicing of mortgage obligations. The settlement was made with the Department of Financial Services of the State of New York.

Payment to Former and Current Homeowners

The terms of the settlement require Ocwen to pay $50 million dollars in restitution to both current and former homeowners who had dealings with Ocwen. Ocwen is to pay $10,000 to each homeowner who lost their homes pursuant to a foreclosure proceeding since 2009. In addition, Ocwen had to pay a $100 million dollar civil penalty by the end of December 2014. The State of New York is going to utilize these funds for foreclosure relief, housing for families whose homes have been foreclosed on and for community development purposes.

The $150 million dollar consent agreement with Ocwen was the result of an investigation between 2010 and 2011 concerning wrongful foreclosures, poorly documented foreclosure practices, “robo-signing”, the submission of inaccurate affidavits to courts, and sloppy, improperly maintained business records and paperwork.

Conclusion

In the event you are a homeowner whose home is currently in foreclosure or was foreclosed upon by Ocwen since 2009, you are entitled to compensation pursuant to Ocwen’s settlement with New York State.

Elliot Schlissel is a foreclosure defense attorney. He helps keep clients in their homes. He obtains mortgage modifications for clients and he fights for client’s rights in foreclosure lawsuits.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: bad faith, defective foreclosure lawsuits, foreclosure attorney, foreclosure defense lawyers, New York foreclosure attorney, wrongful foreclosures

Bank Sanctioned For Failure to Negotiate a Mortgage Modification In Good Faith

May 17, 2015 by Elliot S. Schlissel

A foreclosure action was referred to Justice Genine Edwards who sits in Kings County. The lawsuit had been referred to her for a bad faith and standing hearing after more than 25 foreclosure conferences had been held regarding the case during a period of more than 36 months. After numerous attempts to reach an agreement between the homeowner and the bank, a hearing was conducted by Justice Genine Edwards.

Foreclosure Court Conferences

The foreclosure court conferences had taken place before a referee. The referee had written a report which stated the defendant, Diakite had qualified for a HAMP trial mortgage modification. In addition, Diakite had made three monthly payments under the HAMP temporary mortgage modification. After the three payments were made, the bank refused to accept any further payments from Diakite.

Three Mortgage Payments Made Under The Temporary Mortgage Modification

The first three mortgage trial modification payments were accepted by Aurora Loan Services. Aurora rejected the final modification. They claimed Diakite needed to restart the process all over again since Aurora did not receive the executed mortgage modification agreement from Diakite. Diakite indicated the reason she didn’t send it to Aurora was that she had never received it in the first place. Nationstar Mortgage thereafter informed Diakite the servicing on the loan was being transferred to them from Aurora. Nationstar thereafter denied Diakite’s HAMP application. They claimed Diakite did not provide necessary documentation.

The Judge’s Decision

Justice Edwards took into consideration that while she had directed the bank to produce a copy of the mortgage and the note and any assignments which indicated proof of ownership of both instruments, the bank had failed to produce any documentation whatsoever. She concluded the record supported the referee’s report. The plaintiff had failed to negotiate in good faith pursuant to New York Civil Practice Law and Rules section 3408. Justice Edwards therefore confirmed the referee’s report and stayed all interests, costs, and attorneys fees due and owing to the bank from March 1, 2010 until October 27, 2014, the date the hearing took place before her.

Conclusion

More and more banks are being sanctioned for failure to negotiate in good faith at mortgage modification conferences. Making homeowners provide documents over and over again, not taking responsibility for misplacing the documents, or losing the documents is simply unfair. In addition, it is unfair to grant a homeowner a mortgage modification, have them pay the required amount pursuant to the modification for between three and six months and thereafter have the bank say, no we are not going to make the modification permanent.

Filed Under: Foreclosure, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure defense attorneys, mortgage modifications, New York foreclosure defense lawyers

Homeowner Sues Bank For Breach of Contract Regarding Temporary Mortgage Modification

May 8, 2015 by Elliot S. Schlissel

Homeowner Lyo brought a breach of contract proceeding against Bank of America. Lyo had attempted to obtain a mortgage loan modification from Bank of America. She had contacted Bank of America. Bank of America sent her an application for a loan modification. Thereafter Bank of America accepted and mailed Lyo an agreement for a trial modification mortgage plan.

Payments Made Under Trial Mortgage Modification

Lyo made all necessary payments under the trial program. She continued to make payments which were accepted by Bank of America even after the trial program finished. However, Bank of America never sent her a permanent mortgage loan modification. Bank of America notified Lyo she did not meet the eligibility requirements for a modified loan. They claimed this was due to the present value of her home.

23 Payments Accepted, 24th Payment Rejected

Bank of America had accepted payments from Lyo for 23 consecutive months after she had agreed to the trial period mortgage modification plan. Bank of America rejected her 24th payment. Supreme Court Justice Judith McMahon sitting in the Supreme Court Part in Richmond County ruled Lyo’s temporary mortgage modification plan could be considered an enforceable agreement. This agreement granted Lyo a loan modification as described within the terms of the agreement. She found the language in the temporary mortgage modification plan unequivocally provided, if Lyo complied with all the conditions, Bank of America was obligated to grant her a permanent loan modification. Bank of America’s application to dismiss Lyo’s breach of contract lawsuit against it was therefore denied.

Conclusion

Numerous homeowners come to my office each and every month with a story of woe concerning temporary mortgage modifications. The story goes as follows, the bank offered them a temporary mortgage modification and they accepted it. They thereafter made payments for a period of time, usually six months, under the temporary mortgage modification plan. Thereafter the bank comes up with some type of reason to turn them down for a permanent loan modification. Sometimes the reasons are very spurious. Homeowners who fulfill their obligations under temporary mortgage modification plans should always be given a permanent mortgage modification under the same terms!

Filed Under: Foreclosure, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, mortgage modifications, Mortgage Modifications new york

Failure to State Statute of Limitations Defense in Answer Waives The Defense

April 29, 2015 by Elliot S. Schlissel

Wells Fargo Bank brought a foreclosure legal action in the Supreme Court of Bronx County. The case was before Justice Mary Ann Brigantti. The defendant in the case, Ali, brought a motion to dismiss Wells Fargo’s Complaint. The motion claimed the residential foreclosure lawsuit was time barred.

The bank had initiated the foreclosure case with an Order of Reference entered in its favor. It had accelerated the mortgage when Ali failed to make payments on the loan. Ali’s moving papers stated the new foreclosure proceeding was not initiated until almost a year after the six year statute of limitations to bring a new foreclosure lawsuit had expired.

Statute of Limitations Defense Waived?

The bank claimed Ali waived the statute of limitations as a defense because he had not plead this defense in his answer. In addition, Wells Fargo’s attorneys claimed the initial acceleration of the mortgage (at the time of the accelerating of the mortgage the statute of limitations begins to run) may not have been valid because at the time it took place, Wells Fargo may not have had standing to commence the lawsuit. This was because the assignment was executed sending the mortgage to Wells Fargo after the lawsuit was initiated. The bank also claimed they revoked the prior acceleration of the loan by voluntarily discontinuing the prior lawsuit without prejudice in 2012.

Judge Brigantti denied Ali’s motion to dismiss. Her decision stated he waived the statute of limitations as a defense because he did not plead it as a defense in his Answer to the bank’s Complaint. In addition, the judge stated Ali did not establish the bank properly accelerated the debt in the prior lawsuit which was discontinued in 2007. Since Ali didn’t prove the acceleration of the debt he cannot argue the statute of limitations was triggered.

Conclusion

It is important to allege a statute of limitations defense in the event there is any possibility six years has elapsed from the initial acceleration of the note and mortgage. The statute of limitations is an extremely powerful defense. This is because it is a complete defense to bringing a lawsuit on the note. If the statute of limitations has expired, the bank’s lawsuit will be dismissed by the court if an appropriate motion is made.

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

Question As To Whether Bank Possessed Note Before Starting Foreclosure Lawsuit

April 25, 2015 by Elliot S. Schlissel

Wells Fargo brought a foreclosure lawsuit against defendants in a Supreme Court Foreclosure Part in Kings County. The case was before Supreme Court Justice Carolyn Demarest. Wells Fargo eventually brought a motion to strike the defendant’s Answer and for summary judgment. The bank’s moving papers in the motion stated the defendants did not make a single payment on the note. The default was more than nine years old.

Note And Mortgage Assigned On Numerous Occasions

Justice Carolyn Demarest looked into the fact the note and mortgage had been assigned many times. Upon close examination she found all three assignments were assigned by a single person. This individual was identified only as an “authorized signator”. There was no explanation as to which entity the person was working for at the time he signed all three assignments. In addition, the bank alleged it had physical possession of the note before the commencement of the action. However, the judge found there was no explanation in the affidavit submitted by the bank’s servicer as to why assignment number three was dated more than a month before assignments one and two.

Bank’s Standing to Foreclose Challenged

The homeowners challenged the bank’s standing to proceed on this foreclosure lawsuit. Justice Demarest in her decision stated, the bank claimed the physical possession of the note, in and of itself, gave it standing at the time of the commencement of the lawsuit.

Summary Judgment and Motion to Dismiss Denied

Justice Demarest found the defendants had raised an issue of fact with regard to whether the bank actually had possession of the note before the action was initiated. Based on this, she denied the bank’s motion for summary judgment and to strike the defendant’s first and fifth affirmative defenses.

Conclusion

It is clear the bank’s representations cannot possibly be true in this case. As stated most eloquently by William Shakespeare, “there is something rotten in Denmark.”

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

Monetary Damages In a Countersuit Against the Bank

April 4, 2015 by Elliot S. Schlissel

Please click on the link below to watch today’s video blog:

http://youtu.be/ja5dxpyWpxg

Elliot S. Schlissel is a foreclosure attorney. He and his associates have been helping homeowners stay in their homes for more than 45 years. He also helps his clients obtain mortgage modifications. Elliot can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: Counterclaims, defective foreclosure lawsuits, foreclosure, foreclosure defense lawyers, foreclosure proceedings, Monetary damages, New York foreclosure attorneys

Motion to Foreclose Mortgage Denied

April 1, 2015 by Elliot S. Schlissel

Citibank brought a foreclosure proceeding in Kings County Supreme Court before Justice Francois Rivera. Judge Rivera noted the affirmation submitted by Citibank relied on documents. Judge Rivera pointed out the documents need to be annexed to the affirmation and the affiant has to establish an evidentiary basis for the court to accept these documents. Judge Rivera ruled that the mere submission of these documents by counsel for Citibank without any detailed identification or presentation or authentication was an inadequate presentation.

Judge Rivera noted the motion papers submitted by counsel for Citibank stated there were exhibits labeled A through C. Citibank’s attorneys, in their moving papers, clearly described exhibits A and B. They did not explain what exhibit C was. Due to Citibank’s attorney’s failure to describe exhibit C, Judge Rivera completely disregarded it.

Bank’s Motion Was Ambiguous

Judge Rivera found Citibank’s motion papers to be ambiguous. He also felt they were incomplete. Judge Rivera stated in his decision he was not sure whether Citibank sought to substitute Federal National Mortgage Association (FNMA) as plaintiff because it was the owner of the note and mortgage or because it was the servicer of the owner of the note and mortgage. Judge Rivera’s decision stated, although an assignment evidencing the mortgage was assigned by Citimortgage to FNMA no evidence of an admissible nature was submitted that FNMA owned the note. In addition, no evidence was submitted showing FNMA had any authority to act as servicer on the note.

Conclusion

The standard that banks and their attorneys must meet to be successful in a foreclosure lawsuit is a very high standard. Unless the bank attorney is very careful and submits appropriate motion papers, their motions to foreclose on homeowners’ properties can be denied by vigilant judges.

Elliot Schlissel is a foreclosure defense attorney who has been representing homeowners and helping them keep their homes for more than 45 years.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure crisis, foreclosure defense attorneys, mortgage, New York foreclosure defense lawyers, Note

Foreclosure Dismissed, Bank Fails To Show It Was The Holder Of The Note

Various Fraudulent Mortgage Transaction Issues – Part II

Various Fraudulent Mortgage Transaction Issues – Part I

Ocwen Financial Corporation Fined $150 Million Dollars

Bank Sanctioned For Failure to Negotiate a Mortgage Modification In Good Faith

Homeowner Sues Bank For Breach of Contract Regarding Temporary Mortgage Modification

Failure to State Statute of Limitations Defense in Answer Waives The Defense

Question As To Whether Bank Possessed Note Before Starting Foreclosure Lawsuit

Monetary Damages In a Countersuit Against the Bank

Motion to Foreclose Mortgage Denied

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