defective foreclosure lawsuits

History of Foreclosure Court Conferences

July 9, 2014 by Elliot S. Schlissel

In 2008, at the height of the financial crisis, foreclosure court conferences were mandated with regard to homeowners who had taken out sub-prime and/or expensive mortgages. When this new requirement for financial institutions went into effect, they were also required to give notice 90 days prior to bringing a foreclosure lawsuit in New York. In 2009, the foreclosure settlement conferences were mandated to all types of foreclosure proceedings brought against homeowners. The foreclosure settlement conference requirements were scheduled to expire in February of 2015. The New York State Legislature, New York State Assembly and New York State Senate, have approved a bill to extend the foreclosure settlement conference requirement until 2020.

Courts Inundated with Foreclosures

The legal system in New York State is having difficulty dealing with the huge number of foreclosure settlement conferences and foreclosure lawsuits. In 2013, there were 100,000 settlement conferences in the courts in New York State. It is expected there will be in excess of 100,000 settlement conferences in 2014.

100,000 Foreclosures Pending

There are approximately 100,000 foreclosure cases pending in New York State. In May of this year, the administrator for the legal system in New York State decided to place more judges at foreclosure settlement conferences. This was in response to complaints from foreclosure lawyers that financial institutions were sending attorneys to the conferences who did not have the authority to make settlements. If the attorneys for the financial institutions cannot make decisions concerning settling the foreclosure cases, the whole purpose of the settlement conferences is defeated. It is anticipated the new judges will be in place and there will be new procedures to follow by the end of July 2014.

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

Is Bankruptcy the Solution to Stopping Foreclosure Proceedings?

June 26, 2014 by Elliot S. Schlissel

There is a common misconception that filing for a bankruptcy, whether it be a Chapter 13 or Chapter 7 bankruptcy, is a solution to being sued in a foreclosure lawsuit. This is generally not the case. Although under certain limited circumstances bankruptcy may be helpful to you, you should consult with a foreclosure lawyer before considering filing a bankruptcy. Although my office has been involved in filing more than 800 bankruptcies, in most cases involving foreclosure, we do not recommend the filing of a bankruptcy in a federal bankruptcy court is the solution to the foreclosure problem. Foreclosure defense has become a niche legal practice. The litigating of foreclosures in New York State courts is becoming a more and more specialized area. Foreclosure defense lawyers over the past 20 years have developed unique skills in defending foreclosure lawsuits which put the banks on their heels and keep homeowners in their homes.

The Automatic Stay

The filing of a bankruptcy will immediately stop a foreclosure from moving forward. However, the automatic stay granted by a bankruptcy court is only a temporary solution to the underlying problem of the foreclosure. Most homeowners whose homes are in foreclosure are not only looking for a temporary solution to the problem. They are looking for a permanent solution. The filing of a bankruptcy is not necessarily the best route to take.

Foreclosure Lawyers

Financial institutions have engaged in numerous fraudulent, unethical, improper practices. There have been many lawsuits by attorney generals in all 50 states as well as the federal attorney general’s office with regard to these improper, fraudulent practices. The banks have been fined more than $100 billion for their improper and fraudulent practices.

There are numerous federal and state laws regulating bank practices. There are also procedural laws to protect consumers in the State of New York with regard to foreclosure lawsuits. There is an entire body of case law that has been developed which can be utilized to stop foreclosure lawsuits in their tracks, and in some situations, get these lawsuits dismissed.

Mortgage Modifications

New York State has a law which requires all financial institutions to negotiate in good faith at foreclosure court conferences with regard to mortgage modifications. The law is designed to help consumers stay in their homes. Unfortunately, the success rate in obtaining mortgage modifications in New York State is very low. However, pressure can be placed on a bank and its attorneys at these conferences to force them to make reasonable offers with regard to mortgage modifications.

Litigating the Foreclosure Case

In a foreclosure lawsuit, every individual has a right to ask for a jury trial. Jury trials provide homeowners with a constitutional level of protection. During the course of these trials evidence of robo-signing, sham foreclosure affidavits, improper bank practices, violation of federal Truth in Lending Laws, violation of New York State Consumer Protection Laws, and violation of procedural laws involving the initiation of foreclosure lawsuits can be put into evidence. If properly presented, these foreclosure lawsuits can be dismissed.

Conclusion

Although the bankruptcy may be a solution to some issues related to foreclosure proceedings, it is generally not the way to go. Homeowners facing foreclosure should fight the foreclosure in the New York State court they are sued in. The best way to deal with this issue is hire an experienced, dedicated foreclosure defense lawyer to see to it your rights are protected and that the banks have acted properly.

Filed Under: Bankruptcy, Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: bankruptcy, Bankruptcy mortgage modification, defective foreclosure lawsuits, Mortgage Modifications attorney, New York foreclosure defense lawyers

Foreclosure Truths and Falsehoods – Part II

June 24, 2014 by Elliot S. Schlissel

Fighting The Foreclosure Lawsuit

3. Can I fight a foreclosure case on my own or do I need a lawyer?

You technically do not need to hire a lawyer to fight a foreclosure case. In theory you can represent yourself. But let’s look at the facts.

The financial institutions bringing the foreclosure proceedings are multi-billion dollar institutions. Banks such as Chase Manhattan are worth as much as a trillion dollars. The lawyers the banks hire to bring the foreclosure lawsuits specialize in foreclosure litigation. Many of these law firms have been operational for more than 25 years and are experts in handling foreclosure litigation. Unless you are very knowledgeable and experienced in the law regarding foreclosures, it would be a terrible mistake to try to defend yourself in a foreclosure proceeding. Experienced foreclosure lawyers have expertise in litigating foreclosure cases. Our law firm has been representing clients in foreclosure cases for more than 20 years. We have scores of cases pending, and many of our clients have been in their homes more than 6 years since the foreclosure proceedings were initiated against them.

Trying to represent yourself at a foreclosure proceeding, although legally appropriate, is almost always a mistake. You need to retain the right lawyer. You should look for a law firm that has extensive experience in representing clients in foreclosure lawsuits.

Loan Modifications

4. Are loan modifications the answer to foreclosure problems?

Loan modifications are the answer for many families’ foreclosure problems. However, they do not work if you have lost your job, are disabled, or have very little cash flow. Banks are not social service organizations. They are in business to make money. They make the mortgage loans to homeowners with the hope of making a profit on these loans.

There are various mortgage modification programs. However, the success rate consumers have in obtaining mortgage modifications runs approximately 20%. Sometimes the best way to motivate a bank to provide you with a mortgage modification is to aggressively litigate the foreclosure case and let them know you are not going to take this matter lying down. Foreclosure defense lawyers utilize the mandatory foreclosure conference parts to press the financial institutions into providing the clients with reasonable mortgage modifications. The failure of a financial institution to negotiate in good faith can be used as a defense in the foreclosure lawsuit.

Walking Away From Your House

5. Your loan modification was denied, should you turn over your home to the bank?

False!

Approximately 80% of the people who apply for loan modifications don’t receive permanent loan modifications. This does not mean you are going to be forced out of your home in the near future. Sophisticated foreclosure defense law firms file answers with numerous affirmative defenses and a variety of countersuits against the financial institutions. They can also demand documents, records and other material from the banks which may be embarrassing or may show the banks have violated federal and state laws. This can put further pressure on financial institutions to grant the client’s mortgage modifications.

Facing Foreclosure: What Do You Do?

6. What should I really do if I am behind on my mortgage and facing foreclosure?

Simply stated, call us. The Law Offices of Schlissel DeCorpo have been helping New Yorkers fight foreclosures and stay in their homes for more than two decades. We have an unparalleled record of success. Our law firm is known to the bank attorneys, the court personnel, and the judges. Call us at 1-800-344-6431, 516-561-6645, or 718-350-2802 for a free consultation. We will keep you in your home!

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

Foreclosure Truths and Falsehoods – Part I

June 22, 2014 by Elliot S. Schlissel

Foreclosure Summons and Complaint

1. If you are served with a summons and complaint in a foreclosure case, all you have to do is later show up at court at the mandatory arbitration court conference. This is not true!

If you are served with a summons and complaint in a foreclosure lawsuit, you have 30 days to submit a written answer to opposing counsel and the court, if served by any other means than by personal service. If the summons and complaint is personally put in your hand, you have 20 days to submit a written answer. If you do not answer it, you are considered to have defaulted. In the event you default, the financial institution’s lawyers, can move forward with the foreclosure case without you participating in it.

Under the law that exists in New York today, you would still be eligible to appear in court at a mandatory foreclosure mediation conference. However, you shouldn’t get your hopes up real high of it being successful and obtaining a mortgage modification. 4 out of 5 people who apply for mortgage modifications are turned down. Even those who are accepted for temporary mortgage modifications should not start celebrating. More than half of the time after the temporary modification period is over, the banks reject entering into a permanent mortgage modification.

You Will Be Thrown Out Of Your House

2. If your house is foreclosed on, you will most likely be thrown out of it in the near future. This is not true!

The foreclosure process can be a long and arduous process. If a foreclosure proceeding is brought against you, you can fight the lawsuit. There are numerous federal and state statutes which protect consumers in foreclosure lawsuits. There are issues involving robo-signers, bad assignments, failure to serve appropriate documents, and failure to effectively plead the case, which can be used as defenses against banks. Banks can also be countersued in the foreclosure proceeding for their violating state and federal laws and for the failure to act appropriately. If served with a foreclosure lawsuit do not vacate your home! You can continue to live in your home. There are remedies available to you!

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

Wrongful Foreclosures

June 19, 2014 by Elliot S. Schlissel

There have been a significant number of lawsuits brought by attorney generals in states throughout the country as well as the federal attorney general’s office involving numerous financial institutions acting inappropriately with regard to foreclosure lawsuits. Lenders such as Bank of America, JP Morgan Chase, PNC Financial Services Group, Wells Fargo and GMAC mortgage company, have actually admitted to improprieties in the way these financial institutions handled the processing of foreclosure paperwork. These financial institutions and many others, including many mortgage servicing organizations, failed to verify the court documents they used to justify foreclosing on homes. In numerous situations, individuals referred to as “robo-signers” signed hundreds of documents which they did not read or were not familiar with. Far worse than that, many of these robo-signers were signing foreclosure documents for financial institutions they were not affiliated with.

Your Home

A family’s home is usually its most valued possession. No family should be forced from their home as a result of faulty bank practices. If your home has been foreclosed upon, is in the process of being foreclosed on, or is even being threatened with a foreclosure, it is important that you seek legal representation as soon as possible. There are numerous grounds to challenge foreclosures, numerous affirmative defenses, and potential lawsuits you may have available to you against the bank for financial damages. If you are the victim of a wrongful foreclosure lawsuit you owe it to yourself and your family to see to it your legal rights are protected.

Mortgage Servicing Companies

Many banks that make home loan mortgages do not service their loans. They either assign the loans to other financial institutions or they subcontract out the responsibilities to service the loans to mortgage servicing companies. Over the last 6 to 8 years, mortgage servicing companies have been overwhelmed with the large number of foreclosure cases they were required to service. Mortgage servicing is a high volume industry. The mortgage servicing companies sometimes hire employees with little formal training in handling these mortgages. In addition, many of them have inadequate supervision and have cut corners to make themselves more profitable. The unusually high number of mortgage defaults has added to this problem by overwhelming some of the mortgage servicing agencies. An example of the irregularities involved in servicing mortgages can be found with regard to Wells Fargo, one of the largest banks in the country, admitting to thousands of mistakes made in foreclosure documents. However, in spite of Wells Fargo’s admissions, they never took any action to stop those foreclosures based on mistakes and fraudulent documents from moving forward.

Robo-Signing

It was indicated earlier in this article the term robo-signer refers to individuals signing documents without authority and without reading these documents. During the course of depositions taken by foreclosure defense lawyers, some robo-signers have admitted to signing more than 10,000 foreclosure affidavits during a month. Most of these affidavits indicated the robo-signers actually personally reviewed the files and determined the paperwork they were signing was correct. During the course of depositions, these workers acknowledged there was virtually no time to even look at the files. They just simply signed the documents claiming to have reviewed files they never looked at.

Are You The Victim of Predatory Lending or
Improper Bank or Foreclosure Practices?

If you feel you are the victim of predatory lending or improper bank or foreclosure practices you should immediately retain a qualified law firm to investigate the situation. There are a variety of remedies available to you. You can even take legal action under certain limited circumstances to set the mortgage on your home aside. It may be that the mortgage loan against your home is unenforceable. If you feel you have grounds to challenge a mortgage or foreclosure practice, call our law firm for a free consultation. Our phones are monitored 24/7. We can be reached at 1-800-344-6431, 516-561-6645, or 718-350-2802.

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

Owning a Home is Better Than Renting

May 31, 2014 by Elliot S. Schlissel

There are a number of factors that should be taken into consideration when comparing the benefits and problems of home ownership versus renting.

No Mortgage vs. No Landlord

When you own a home you are in charge. It is yours! It belongs to you. If something breaks, you fix it. When you rent, you are living in the landlord’s house. If something breaks you need to contact the landlord to fix it. Landlords are not always very responsive to helping their tenants deal with problems in their apartments.

Fixed Rate Mortgages Don’t Go Up: Rent Does!

If you buy a house and obtain a fixed rate mortgage, you will pay the same amount each and every year. If you rent an apartment, periodically the landlord will raise your rent. It should be noted although your mortgage rate won’t go up, taxes on real property go up over time.

Homeowners Obtain Tax Deductions for Mortgage Interest

There are significant tax benefits for owning a home. You can deduct, in your federal and state income taxes, the interest paid on your mortgage. In addition, there are a variety of energy efficient improvements to the home that can be made which are also tax deductible. When you sell your home, the first $250,000 in profit payable to the owner of the home is not subject to capital gains tax.

Managing Your Own Space

When you are in an apartment there are small cosmetic things you can do. However, you cannot customize the space to meet all your needs. If you own a home, you can move walls and do anything you want with it. The space can be modified to meet all of your personal needs and/or whims.

Homeowners Can’t Be Evicted

If you rent an apartment and you don’t pay rent, thirty days afterwards a landlord can bring a summary proceeding and have you removed from the apartment. Eviction proceedings are relatively quick proceedings (although in the City of New York they can take as much as six to eight months). However, if you don’t pay your mortgage, and a financial institution has to bring a foreclosure lawsuit, those proceedings can take as long as three to five years. During that period, you can be living in your home while not making mortgage payments.

Elliot S. Schlissel is a foreclosure lawyer. He represents clients whose homes are going into foreclosure. He helps them stay in their homes, obtain mortgage modifications, and litigate a variety of issues involved regarding foreclosures with financial institutions. Elliot can be reached for a free consultation at 1-800-344-6431, 516-561-6645, and 718-350-2802.

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

Foreclosure Dismissed: Bank Makes Technical Mistake

May 29, 2014 by Elliot S. Schlissel

In a case before Justice Wilma Guzman in Bronx County, Judge Guzman dismissed a foreclosure lawsuit. Deutsche Bank had sued for foreclosure. They moved for a judgment of foreclosure and asked that they be allowed to sell the property. The defendant, Samuel Lopez, brought a cross-motion. He asked that the foreclosure proceeding be dismissed. He claimed there was a failure to comply with a condition precedent of Real Property Actions and Proceedings Law sections 1303 and 1304. He argued in his motion the section 1304 notice to the defendants, provided by American Servicing Company, indicated it was a debt collector and informed defendants they had a right to cure their default and failure to do so might result in American Servicing Company starting a lawsuit against them. Deutsche Bank argued it was in full compliance with section 1304. It was pointed out its notice to the defendants did not contain the method in which the notice had been mailed. This is required by this section of the law.

No Evidence of Mailing

Judge Guzman took into consideration in rendering her decision to dismiss the foreclosure action that no evidence was presented of a first class mailing. There was also no affidavit of mailing for a lender, the lender’s agents or any individual with personal knowledge of the transaction. Justice Guzman’s decision stated a mortgagee’s failure to strictly comply with a condition precedent required the dismissal of this foreclosure legal action.

In this case, American Servicing Company did not provide documentation they were the appropriate loan servicing agent for Deutsche Bank. They also did not fully comply with section 1304 of the Real Property Actions and Proceedings Law. Justice Guzman also pointed out in her decision the Home Equity Theft Prevention Act required a notice as a mandatory “condition” before a financial institution could proceed with a foreclosure lawsuit. The failure of Deutsche Bank and its servicing agent to strictly comply with this statute was valid grounds to dismiss this case.

Conclusion

If a bank doesn’t dot its i’s and cross its t’s, you can get the case dismissed!

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

Rabbi Unable to Stop Foreclosure on Synagogue

May 9, 2014 by Elliot S. Schlissel

Valley National Bank brought a foreclosure lawsuit with regard to a synagogue in Brooklyn. In 2008, the synagogue borrowed $500,000 from State Bank of Long Island. This bank thereafter merged with Valley National Bank. The congregation of the synagogue alleged that the synagogue had two functions. It was a place of prayer and it was the principal residence of the rabbi and his family. They claim “this dual property function had existed since 1970 when the present rabbi’s grandfather established a congregation at its present location.

In such Hasidic Sects, the Shtiebel is the rabbi’s home and his presence is the essence of the Shtiebel.” The congregation alleged in their papers when the mortgage was taken out, the bank was made aware Rabbi Teitelbaum’s residence was located on the site of the synagogue.

A Residential Foreclosure?

The congregation argued that the foreclosure was therefore a residential foreclosure. It should therefore have been in a residential foreclosure part and not in a commercial foreclosure courtroom. As a residential foreclosure, Rabbi Teitelbaum was entitled to notice pursuant to New York Real Property Actions and Proceedings Laws concerning the residential foreclosure.

Bank Argues Rabbi Teitelbaum Has No Standing

The foreclosing bank’s position was that Rabbi Teitelbaum was not a necessary party to the foreclosure lawsuit. They claimed it was a commercial loan and he was not a signatory on the loan. The bank’s attorneys stated in their papers, “instead of presenting a modified defense to [Valley National Bank’s] claims, borrower obfuscates by mischaracterizing the facts in attempts to divert attention from its acknowledged commercial loan default by repeatedly alleging that the rabbi and his family actually reside in the synagogue that is the mortgaged commercial premises.”

Judge Holds Property is Not Residential

The judge on the case rendered a decision that the property at issue was a religious structure and not residential property. The judge went further on to hold Rabbi Teitelbaum was not an indispensable party to the lawsuit. Judge Carolyn Demarest rejected the argument submitted by Teitelbaum. She held that even though he lived on the premises, he was not a signatory to the loans, promissory note, or the mortgage. He therefore was not an indispensable party to the lawsuit.

When Judge Demarest was presented with a similar case where the Appellate Division, Second Department made a different ruling, she stated, “in this action, defendant does not establish that Teitelbaum has a lease to the property and even it Teitelbaum does have a lease he may not be dispossessed by a purchaser at a foreclosure sale absent further proceedings.” With this, she was referring to the fact in the event the bank took title to the property they would still have to bring an eviction proceeding to get Rabbi Teitelbaum, his wife and eight children, off the property.

Conclusion

This is a very close call made by Judge Demarest. I would suggest Rabbi Teitelbaum appeal this decision to the Appellate Division of the Second Department. He may be able to persuade them that he should be named as a party because he was a tenant, even without a lease. Month to month tenants are still tenants and they should be named in all foreclosure lawsuits as interested parties.

Elliot Schlissel is a foreclosure attorney representing individuals and families in residential or commercial foreclosure lawsuits throughout the Metropolitan New York area. Elliot and his staff of dedicated lawyers have an excellent success rate in keeping families in their homes and stopping foreclosure lawsuits in their tracks.

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

Citibank Fails to Show it Has Standing to Bring a Foreclosure Proceeding

April 29, 2014 by Elliot S. Schlissel

In a case before Justice Carolyn Wade, in the Supreme Court of Kings County, in a Foreclosure Part, CitiMortgage moved for summary judgment in a foreclosure lawsuit. The bank submitted a copy of a note which the Williamsons, the defendants in the proceeding, executed. The note was payable to Premium Capital Funding. The Williamsons acknowledged they had this debt and that they had executed a mortgage to Premium Capital Funding. Premium Capital Funding had executed an assignment of the mortgage to CitiMortgage.

The defendants had submitted arguments the plaintiffs’ affidavits which were submitted do not conform with New York State Law and therefore should be considered defective. They also claimed there was an endorsement on the allonge which was also defective.

Bank Does Not Have Standing to Bring The Foreclosure Lawsuit

CitiMortgage failed to establish it was the appropriate holder of the note. Justice Carolyn Wade rendered a decision stating that Citibank failed to submit the documentation substantiating that CitiMortgage was the appropriate successor to CitiFinancial Mortgage Company. CitiFinancial Mortgage Company was the name of the institution which Premium Capital Funding had assigned the note and mortgage to.

Note Not Physically Delivered

Justice Wade in her decision also indicated CitiMortgage failed to establish it was the actual holder of the original note and mortgage by way of physical delivery. The Judge’s decision went on to state the allonge and note were undated and had not been affixed to the mortgage. (It should be noted that an allonge is a document which modifies, changes, and provides further information with regard to a mortgage). Judge Wade in her decision also stated an out of state affidavit needs to be accompanied by a Certificate of Conformity in the appropriate admissible form before it can be accepted in a proceeding in a New York State court. The affidavits herein were not in conformity and therefore are considered defective. CitiMortgage’s application for summary judgment was therefore denied.

Conclusion

Time and time again in the numerous articles I have written, lack of standing affirmative defenses have been successful in preventing banks from successfully bringing summary judgment motions in foreclosures. It is therefore extremely important in every foreclosure lawsuit the defendants allege a lack of standing argument. Until the lawsuit is initiated and discovery takes place within the confines of the lawsuit, it is usually impossible to ascertain as to whether the appropriate financial institution is bringing the foreclosure legal action. Stated in another form, the defendant homeowners don’t know whether the right party is suing them and therefore it is necessary to allege a lack of standing affirmative defense in all cases where the plaintiff in the foreclosure lawsuit is not the original financial institution that granted the mortgage loan.

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

Homeowner Seeks to Rescind Mortgage Loan in Foreclosure Proceeding

April 24, 2014 by Elliot S. Schlissel

Bank of New York Mellon (hereinafter referred to as “BNYM”), had brought an application for summary judgment against the Kahn defendants in a foreclosure legal action. BNYM sought to have the Kahn’s Answer and Counterclaims dismissed. The Kahn’s cross-moved for partial summary judgment. They claimed, in their counterclaim, there was a violation of the Truth in Lending Act.

Mortgage Loan Assigned

The Kahns, after initially purchasing their home, refinanced their mortgage with Countrywide Home Loans. Countrywide Home Loans assigned the mortgage to BNYM. BNYM had initiated the proceeding to foreclose on the Kahns’ home. The Kahns had submitted an Amended Answer. In their Amended Answer they sought to assert a rescission claim. This rescission counterclaim alleged a violation of the Truth in Lending Law by Countrywide Home Loans. They claimed that Countrywide had understated the finance charges by more than $35 in the required Mortgage Financial Disclosure Statement. They claim this was a material misrepresentation in the mortgage disclosure statement. BNYM argued the rescission claim was not presented in a timely manner. They claimed the Amended Answer was served more than three years after the time of closing and therefore in violation of the statute of limitations with regard to the legal theory of rescission.

Relation Back Doctrine Doesn’t Toll the Statute of Limitations

Judge Anil Singh ruled the relation back doctrine alleged by the Kahns did not apply in deciding whether a claim to rescind a transaction was timely made. Judge Singh also noted when rescinding a transaction the timing of the rescission notice is based on when the creditor receives the notice. In this case, Judge Singh held the notice to rescind the matter was received more than three years after the transaction took place and therefore was beyond the statute of limitations for rescinding the transaction. Therefore Judge Singh held the Kahns could not assert the right to rescind this transaction in their counterclaim in the pending foreclosure proceeding. Summary judgment by BNYM was granted and the Kahns partial summary judgment was denied.

Conclusion

The Kahns in this case created a very innovative defense to the foreclosure proceeding. Their defense basically stated there had been a violation of the Truth in Lending Law, albeit a very small violation, involving $35 by Countrywide Home Loans at the time of the refinance. Therefore because of this violation they were rescinding the entire transaction. The court in this case held there was a three year statute of limitations with regard to rescinding a transaction of this type. Therefore the Kahns had to provide Countrywide Home Loans notice with the rescission within three years from the date of the closing. In this case, the Kahns provided Countrywide Home Loans notice of the rescission as part of a counterclaim alleged more than three years after the date of closing. Judge Singh held the Kahn’s argument that their counterclaim, submitted in the foreclosure lawsuit, should be considered to be related back to the time of the closing.

I like the argument. If I was the judge, I would have upheld it!

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

History of Foreclosure Court Conferences

Is Bankruptcy the Solution to Stopping Foreclosure Proceedings?

Foreclosure Truths and Falsehoods – Part II

Foreclosure Truths and Falsehoods – Part I

Wrongful Foreclosures

Owning a Home is Better Than Renting

Foreclosure Dismissed: Bank Makes Technical Mistake

Rabbi Unable to Stop Foreclosure on Synagogue

Citibank Fails to Show it Has Standing to Bring a Foreclosure Proceeding

Homeowner Seeks to Rescind Mortgage Loan in Foreclosure Proceeding

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