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Suing Large Financial Institutions

foreclosure defense attorneyThe Consumer Financial Protection Bureau is reviewing new regulations which will put the brakes on a contentious practice called mandatory arbitration. Under mandatory arbitration rules, consumers must take disputes they have with financial institutions to third party mediators. This prevents them from going into courts and presenting their issues to judges. Consumer advocates feel this practice benefits large financial institutions, credit card issuers and financial service providers to the detriment of consumers.

Fine Print in Consumer Contracts

Most Americans are unaware that there is fine print in many consumer contracts which requires they submit complaints concerning issues, such as disputed charges on financial accounts, to arbitration. Consumer advocates claim arbitrators are often biased and rule against consumers. It should be noted, in many situations, rulings by arbitrators are not appealable.

Arbitration Process

The arbitration process started out as a good idea. Its intent was to give consumers an inexpensive way to challenge bank practices. However, financial institutions have manipulated the arbitration process. When they feel an arbitration firm does not rule in their favor on a regular basis, they shop around for other arbitration companies. This gives arbitration companies a reason to rule in favor of banks so they will hire them again and again.

George Slover with the Consumer’s Union, the public policy and advocacy arm of Consumer Reports Magazine, stated “this proposal is a tremendous step towards cleaning up a system that has heavily favored companies over consumers who were wronged.”

The new proposal before the Consumer Financial Protection Bureau does not create a complete ban on arbitration. It proposes new rules which would allow unhappy consumers to start lawsuits against banks or other financial institutions as a group, through class actions, if they feel it is appropriate instead of submitting to arbitration.

foreclosure defense lawyerElliot S. Schlissel is a foreclosure lawyer representing consumers throughout the Metropolitan New York area. He litigates foreclosure cases against financial institutions. His goal is to keep his clients in their homes.

Rescission of a Loan

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

https://youtu.be/UU2gtDLgo2k

Elliot S. Schlissel is a foreclosure defense lawyer helping homeowners stay in their homes throughout the Metropolitan New York area.  He and his associates can be reached for consultation at 516-561-6645 or 718-350-2802 or send an email to schlissel.law@att.net.

The Rise of Non-Bank Mortgage Servicing Companies – Part II

foreclosure and real estate lawyer in New YorkServicing $10 Trillion Dollars of Mortgage Loans

Non-bank institutions which service mortgages have grown at an incredible rate in the past few years. The largest fifty non-bank mortgage servicing companies handled almost $10 trillion dollars in mortgage loans in 2014. Non-bank servicing organizations accounted for almost 30% of these loans last year. In 2010, they accounted for only 7% of these loans. Ocwen serviced nearly $400 billion dollars in loans in 2014, and NationStar Mortgage serviced more than $377 billion dollars in loans. This is 500% more than they serviced in 2010.

Large Employee Turnover

These non-bank institutions have large turnovers of their employees. It makes it extremely difficult for homeowners to reach the same individual at these institutions to deal with their problem. This can create a gut wrenching situation for the homeowners who are trying to straighten out administrative problems caused by the servicing agencies.

Non-bank servicing companies are much harder to work with than traditional financial institutions. They are not as well equipped or well versed in issues concerning loss mitigation.

In 2014, the Consumer Finance Protection Bureau imposed new mortgage servicing requirements on both banks and non-bank servicing mortgage companies. Under these new rules, all mortgage servicing companies are supposed to create a “single point of contact”. This single point of contact is designed to help homeowners with troubled loans.

Approximately a year ago, the New York Department of Financial Services blocked a transfer of almost $3 billion dollars in mortgage servicing contracts from Wells Fargo Bank to Ocwen. In December 2014, Ocwen reached a $150 million dollar settlement with the New York Department of Financial Services concerning abuses and conflicts of interest. Hopefully in 2015, this New York agency will be able to regulate these non-bank servicing institutions and/or motivate them to provide higher quality levels of service to the tens of thousands of beleaguered mortgage holders who are forced to deal with them.

New York foreclosure defense attorneyElliot S. Schlissel is a foreclosure attorney. He helps homeowners with homes which have gone into or are going into foreclosure. He is the author of more than 400 articles on his blog concerning foreclosure defense.

The Rise of Non-Bank Mortgage Servicing Companies – Part I

There has been an explosive rise in the number of mortgages serviced in the United States by non-bank mortgage servicing companies. Mortgage servicing companies don’t offer checking accounts or savings accounts. They are simply hired by financial institutions to process payments and perform various administrative banking tasks that are commonly referred to as “servicing”. These non-bank institutions in the year 2014 are servicing a larger and larger portion of all mortgage loans in the United States. Non-bank mortgage servicing companies operate under a different regulatory scheme than banks. They are subject to considerably less scrutiny with regard to their practices.

Alarm About Non-Bank Servicing Companies

A number of homeowner complaints concerning large non-bank servicing companies are growing at a significant rate. The largest non-bank mortgage servicing companies are Ocwen Financial Corporation and NationStar Mortgage. These two mortgage servicing companies, pursuant to the Consumer Financial Protection Bureau, accounted for 4,658 complaints from consumers in the year 2014. This was a dramatic increase in the number of consumer complaints from previous years.

Benjamin Lawsky, Superintendent of New York’s Department of Financial Services, recently stated that behind every troubled mortgage loan is “a family, a person, and it’s usually someone struggling to make ends meet”. Long Island is a great example of that. We have lots of homes under water and people who need loan modifications.

Transferring of Mortgages

The servicing of mortgages is not a simple business model. Each and every time the mortgage gets transferred from one bank to another or one servicing agency to another, there is potential for mistakes and errors which can result in putting the homeowner into financial turmoil. There have been numerous cases of individuals whose mortgages have been transferred from one servicer to another that have had their lives turned upside down by the mistakes made by these agencies.New York foreclosure defense attorney

The Lack of Standing Defense in Foreclosure Lawsuits – Part I

foreclosure help for homeownersWhen a financial institution brings a foreclosure lawsuit, they have a legal obligation to prove to the court they are the rightful holder of the mortgage and note they are suing on. Mortgages and notes are standardized documents. In most situations a variety of financial institutions and servicing organizations will handle the mortgage and note prior to the initiation of the foreclosure lawsuit. The financial institution who in the end brings the foreclosure lawsuit must show each of the assignments, starting with the financial institution who made the loan, was properly executed and the requisite documents were filed in the County Clerk’s office. Over and above that, the financial institution who brings the foreclosure lawsuit must have in its hands at the time the lawsuit is initiated, the original mortgage and note.

Bank Assignments

Sometimes mortgages have traveled through many different banks and servicers’ hands before a foreclosure lawsuit is brought against the homeowners. The proof of the ownership by the financial institution who brings the lawsuit revolves around the chain of assignments from one previous owner to the next. Sometimes the actual paperwork on the assignments are never completed or are not correctly done. The documentation of the assignments may only exist within the computers of the financial institutions. That is insufficient. The party bringing the foreclosure lawsuit must have the original note and mortgage and be able to show that every step of the way, between the original bank and the bank bringing the foreclosure, involved a proper assignment which was properly filed and executed by the appropriate parties.

Homeowners have been successful in dozens of lawsuits in the Metropolitan New York area in showing the financial institution bringing the foreclosure lawsuit was not a proper party due to a defect in the assignments. This causes the lawsuit to be dismissed! The theory behind the assignments is the party bringing the lawsuit has standing to sue under the terms of a contract (the mortgage and note are contracts). The initiating party in the lawsuit must have a documented ownership interest in the contract. In addition, the party having the ownership interest in the contract must have suffered some damages (the non-payment of the mortgage).New York foreclosure defense attorney

Deeds In Lieu of Foreclosure: An Imperfect Remedy

foreclosure attorney for homeownersDeeds in lieu of foreclosure are used by many attorneys and homeowners to short circuit the foreclosure process. I rarely suggest to a client to execute a deed in lieu of foreclosure. What a deed in lieu of foreclosure accomplishes is it allows the bank to take the home back quickly. It often leaves the homeowner with no credit, no assets, and no place to live! The reason given for executing a deed in lieu of foreclosure is it will eliminate a deficiency judgment.

Deficiency Judgment

Here is an example of what a deficiency judgment is: let’s assume there is a home worth $300,000, and a mortgage on the home in amount of $400,000. The house sells for $250,000 to a speculator at a foreclosure sale. There is a $150,000 deficiency which is still owed by the borrower. The deed in lieu of foreclosure prevents the bank from getting a deficiency judgment in the amount of $150,000.

This is the selling point used by many attorneys. It is usually a false selling point. Banks, generally speaking, do not pursue deficiency judgments in the Metropolitan New York area if the homeowner has no assets. Even if the bank desires to move forward for a deficiency judgment, the homeowner can simply file a Chapter 7 bankruptcy and eliminate the debt.

Fighting the Foreclosure Proceeding

When the homeowner decides to hire an attorney and fight the foreclosure proceeding, both the homeowner and his or her family will probably spend the next three or four years living in their home and not facing the problems of finding a place to live without credit and financial resources.

Deeds in Lieu of Foreclosure Won’t Always Work

A deed in lieu of foreclosure is usually only accepted by financial institutions where there is no equity in the property, and there are no liens or other mortgages attached to the property. In these types of cases, most banks will agree to a deed in lieu of foreclosure transaction.

If there is a second mortgage, monetary judgments on the property, mechanics’ liens, or other types of liens on the property, the bank will generally not agree to a deed in lieu of foreclosure transaction. In these situations they want the foreclosure sale to go forward. At the foreclosure sale, the second mortgage, the mechanics’ liens, and the judgments will be eliminated. The bank will obtain clear title to the property and not have to deal with the nuisances involved with other title impediments. In situations where there are second mortgages, mechanics’ liens, or other judgments or liens on the property, most banks will simply want to continue with the foreclosure process to obtain clear title.

New York foreclosure defense attorney IslandElliot Schlissel is a foreclosure defense lawyer helping homeowners stay in their homes throughout the Metropolitan New York area.

Various Fraudulent Mortgage Transaction Issues – Part II

legal help for homeownersFraudulent 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.

New York foreclosure defense attorney IslandElliot 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.

Question As To Whether Bank Possessed Note Before Starting Foreclosure Lawsuit

foreclosure defense lawyerWells 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.”foreclosure attorney on Long Island and New York City

Missing Mortgage Payments

assistance for homeownersIt is common for homeowners on occasion to fall a month or two behind in paying their mortgages. Banks will usually not take any action in these situations. However, if you should fall three or more months behind on your mortgage payments, the bank who holds your mortgage may refuse to accept your mortgage payments in the future unless you pay the total amount of the arrears you owe including late charges and penalties. This is called accelerating the mortgage.

Notices By Banks

Banks will usually provide you with a late notice when you don’t make your mortgage payments. They also may send a letter to you describing options you have with regard to mortgage modifications, deeds in lieu of foreclosure, and short sales.

Negotiations With Lenders

If you are behind on your mortgage, it is recommended you try to negotiate with your lender. Your lender may be willing to enter into a forbearance agreement with you. Forbearance agreements are sometimes given to homeowners when they become disabled or when they suffer a temporary loss of employment. The attorneys at the Law Offices of Schlissel DeCorpo have extensive experience in negotiating with lenders for alternative remedies to be utilized by banks instead of foreclosure proceedings.

If you have a continued inability to make your mortgage payments you may receive a notice of default correspondence from your financial institution. Eventually you will be sent a letter by your lender giving you 90 days notice prior to the start of a foreclosure lawsuit. If you haven’t hired an attorney by this time, it is strongly suggested you hire a foreclosure defense lawyer when you receive this correspondence. The purpose of this letter is to give you one last opportunity to bring your mortgage current by making all back payments before you get served with a foreclosure Summons and Complaint. The foreclosure lawsuit will not start for at least 90 days. This gives you several months to try to rectify the situation with your financial institution.

Foreclosure Lawsuits

After receiving the 90 day notice, the lender may not actually sue you in 90 days. The lender may take several more months to obtain the necessary documentation and paperwork before initiating the foreclosure proceeding.

Bankruptcies

In some situations, filing either a Chapter 7 bankruptcy or Chapter 13 bankruptcy can be helpful to deal with your financial difficulties which put you into foreclosure. The Chapter 7 bankruptcy will eliminate all of your debts including your mortgage obligation. In a Chapter 13 bankruptcy you can catch up on your arrears over a 5 year period while making your current mortgage payments. Unfortunately, if you couldn’t afford your mortgage payments to begin with the Chapter 13 bankruptcy won’t work for you.

Experienced Foreclosure Defense Lawyers

The attorneys at the Law Offices of Schlissel DeCorpo have helped numerous New Yorkers stay in their homes, fight foreclosures and obtain mortgage modifications. Should you fall behind on your mortgage, give us a call and we will set up a free consultation to set up a specific plan to protect you and your family from being forced from your home.foreclosure defense lawyer in New York

Foreclosure Defense Facts: Keeping Your Home When Facing Foreclosure – Part II

foreclosure defense attorneys for homeownersDo I Need A Lawyer To Help Me Litigate The Foreclosure Case?

The answer to this question is yes. In theory you can submit an Answer and represent yourself. However the law firm representing the bank usually brings hundreds of lawsuits against consumers. They usually have an expertise in foreclosing on homes and having the homes sold at auction on the courthouse steps. If you do not hire a lawyer, you will find yourself in an extremely disadvantaged situation. You will not understand the laws, the court rules, and the procedures involved in fighting a foreclosure case. Retaining a law firm who has fought hundreds of cases and has a successful record such as our law firm puts you in the best situation to keep your home, obtain a mortgage modification, and/or get the foreclosure lawsuit dismissed.

You Can Obtain A Mortgage Modification

You will have the opportunity to modify your mortgage under the auspices of the mandatory mortgage modification conference. New York requires, in all foreclosure lawsuits, a mandatory settlement conference on residential mortgage foreclosure cases. At the foreclosure settlement conference you will have an opportunity to apply for a mortgage modification. Even if you have already been turned down, you can apply for another mortgage modification under the supervision of the referees in the mandatory foreclosure settlement conference part in the courthouse.helping homeowners stay in their homes

Foreclosure Defense in Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick and Bellmore, New York

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