Federal Government Seeks $863 Million from Bank of America For Defective Mortgages

foreclosure defense lawyerThe United States government has gone into the Federal District Court in New York City requesting Bank of America pay $863.6 million dollars in monetary damages related to fraudulent activities concerning defective mortgages which were sold by Countrywide Financial Services in 2008. It is claimed Bank of America defrauded Fannie Mae and Freddie Mac, government controlled mortgage companies, with regard to the sale of loans purchased from Countrywide in 2007 and 2008. These mortgage loans generated $1 billion dollars in losses.

The Hustle

The case filed in United States District Court in Manhattan claims Countrywide operated a program called high speed swim lane or HSSL, nicknamed the “Hustle”. The Hustle program was set up to provide financial incentive for employees to make as many loans as possible. The program eliminated many underwriting requirements to ensure loans met minimum standards. The government’s position is penalties are necessary “to send a clear and unambiguous message that mortgage fraud for profit will not be tolerated” stated Judge Jed S. Rakoff, who presided over the trial in this matter. The amount of the penalties requested is based on the losses Fannie Mae and Freddie Mac incurred.

assistance for homeownersElliot Schlissel, Esq. is a foreclosure attorney representing homeowners concerning mortgage modifications and foreclosure litigation.

JP Morgan $13 Billion Settlement for Bad Mortgage Practices

mortgage modification attorneysFor 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.

assisting homeownersElliot 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.

Courts Impact On The Foreclosure Crisis

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.

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

Home Prices Are DownMortgage 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.

Buyers Are Still Wary Of Purchasing Homes In New York

The housing market on Long Island did not improve in the month of January 2012. According to Multiple Listing Service on Long Island the median sales price of a home in Nassau County  fell 6.1% between January 2011 and January 2012.  This brought the median home price down from $410,000 to $385,000.  During the same period of time homes in Suffolk County fell 5.2%.  With the median price going from $313,000 to $296,800.  The volume of homes that were sold also was reduced.

James Retz, a Vice President at Daniel Gale Sotheby’s International Realty in Cold Spring Harbor, stated with regard to the real estate market on Long Island it is “showing a lot of life, but there’s still a lot of caution.”

High Foreclosure Rates

The high foreclosure rates on Long Island continue to have a negative impact on the sales price of homes.  There are simply too many homes on the market in Long Island.  When you have a lack of equilibrium between the amount homes listed to be sold and the number of purchasers interested in buying homes the market will continue to go down.

Conclusion

It is still a difficult time to sell a house and buyers who are in the market today can obtain substantial bargains.

Real Estate Lawyers

The Real Estate Lawyers at the Law Offices of Schlissel DeCorpo can help you if your home is in foreclosure or if your home is heading toward foreclosure.  We can represent you at foreclosure court conferences.  We can submit foreclosure defenses in litigation brought by financial institutions against you.  A commonly utilized pleading involves defenses such as defective foreclosures, predatory lending, foreclosure fraud, and other real estate related defenses.  We can also help you with regard to a forensic audit with regard to your mortgage.  Call us and we will discuss your foreclosure options with you.
An additional option when faced with foreclosure is filing a Chapter 7 or Chapter 13 bankruptcy.

Our attorneys are available to discuss foreclosures related to bankruptcy with you.  Feel free to call us.

Twenty Five Million Dollar Mortgage Settlement

The Federal Government has recently settled for 25 million dollars with Bank of America, Wells Fargo, JP Morgan Chase, Citigroup, and Ally Financial with regard to pending litigation concerning their improper activities regarding mortgages.

The cases were initially started in 2010.  Banks were initially found of guilty of signing off on foreclosures without appropriately reviewing them.  The scandal uncovered what has been referred to as robosigning.  Robosigning is where bank officials sign documents without reading them.  Sometimes as many as hundreds of these documents within a day.

Banks Broke The Law

The banks involved in the robosigning scandal broke the law.  As a result of their improper activity thousand of homeowners were evicted from their homes for invalid or nonexistent documentation.

Who Receives the 25 Million?

The exact details with regard to the settlement have not been worked out. However, it is anticipated the money will be allocated as follows:

1.         1.5 billion dollars in cash payments will go to approximately 750,000 qualified homeowners who lost their homes in foreclosure between 2008 and 2011.  This works out to about $2000 per homeowner.

2.         Banks will agree to 17 billion dollars in principle reductions concerning homeowners who have homes that are underwater and are either at risk of default or currently in default on their mortgages.

3.         3 billion dollars will be allocated to homeowners who are currently paying high mortgage raters or have adjustable mortgages.  The adjustable mortgages can be reset to very low interest rates.

4.         The balance of the settlement funds will be utilized for consumer protection programs and to establish reforms with regard to the bank servicing agency.

It is estimated that it will take between eight and ten months to set up a methodology of distributing the funds and establishing who the homeowners are that would have to be compensated.  The settlement will be thereafter put into effect for a period of 36 months.

Federal officials have suggested that the total amount of funds paid by the financial institutions will end up being as high as 39 billion dollars.

This Is Not Enough

Paul Dales, a housing economist recently stated “you are hardly skimming the surface.  It could help some people a lot, individually. But in terms of the big picture, overall economy and housing market, it is really just a drop in the ocean of the problem.  Only the five banks mentioned have agreed to this settlement, while mortgages funded by Fannie Mae and Freddie Mac are exempt.  This cuts more than half of the homeowners from eligibility right off the bat.”

Punishment for Banks

Experts feel that the 25 billion dollars being paid by the financial institutions will not have a significant impact on dealing with the housing crisis in the United States.  While the plan may be flawed, it is a start in the right direction!

Stopping Foreclosure By Filing Bankruptcy

Foreclosure related bankruptcy filing is one of the possible options in dealing with foreclosure problems.  Individuals and spouses can file either Chapter 7 or a Chapter 13 bankruptcies.  The filing of the bankruptcy immediately stops foreclosures from moving forward, stops debt collection practices and stops creditor harassment.  In some circumstances the filing of bankruptcy can eliminate second mortgages.  Call us and we can discuss the types of bankruptcy that are available to you and why filing bankruptcy may be in your interest and other foreclosure defense related options.

Attorneys Who Defend Foreclosures In New York

The Long Island foreclosure defense lawyers at The Law Offices of Schlissel DeCorpo have for more than two decades been representing the families in the courts of Nassau and Suffolk Counties.  The firm helps clients obtain mortgage modifications.  The firm also prepares forensic audits on behalf of clients.  If a foreclosure action is started, the firm submits written answers alleging defenses such as predatory lending, defective foreclosure lawsuits and defective mortgages.  The firm’s attorneys appear in court for settlement conferenceand pressure the financial institutions to give their clients mortgage modifications.

Foreclosure related bankruptcies are another option to deal with foreclosure lawsuits.  Either the filing of a Chapter 7 or a Chapter 13 bankruptcy will bring a foreclosure proceeding to a halt.  Either of these bankruptcies can be utilized to stop foreclosures, stop debt collection, and stop creditor harassment.  Contact the firm for a free consultation.

Summer Home Buying Season, the Worst in Five Decades

home1Spring of each year starts the home buying season. The months of April through the end of August signals the time that most home buyers come into the market. This is usually a time of heightened activity in the real estate market for the sale of single family homes. This was not true, however, in the year 2011. From the period of April through the end of August of 2011, fewer homes were sold in the United States during any six month period in the last fifty years. Home sales from the Spring and Summer were the weakest since 1963. This is an indication of how poor the real estate market and the economy in the United States is doing.

Low Mortgage Rates

Mortgage rates reached their lowest levels since records were kept during the Summer months. However, even with record low mortgage rates and home prices continuing to go down, would-be buyers are still not being enticed. Approximately one hundred and seventy thousand homes were sold from March through August of this year. This is even less than was sold in the same period in 2010, which, up until that time, was the worst in a half a decade. Normally, approximately four hundred thousand homes would sell during this period of time.

Home Prices Falling

The medium price for the sale of existing homes fell to approximately $168,000. This was decreased in 5% from the prior year. New home prices averaged about $209,000, which was almost 8% less than the prior year. Low priced foreclosure sales and short sales have been driving the market down. This causes real estate brokers to press sellers to lower their prices on their homes to compete with these foreclosures and short sale homes. It is estimated that homes in foreclosure and short sales sell for 20% less than their market value. This has the impact of lowering home prices throughout the areas where the short sales and foreclosures are located.

Is the single family home becoming a depreciating asset? Is the American dream over? I don’t think so. However, we may be headed for an additional five years of flat real estate prices before we see a significant rebound

Bankruptcy can act as an escape valve to prevent the loss of a home, stop foreclosure, eliminate a second mortgage and stop debt collection harassment. Your credit can be re-established after filing either a Chapter 7 or a Chapter 13 bankruptcy One bankruptcy myth is that you will never receive credit again after filing bankruptcy. This is simply untrue.

Bankruptcy Lawyers

Should you have questions or issues concerning your financial situation or are considering filing for bankruptcy, feel free to call the Law Offices of Schlissel DeCorpo. We’ve been helping our clients for more than 30 years deal with foreclosure defense and bankruptcy matters. We can be reached at 1-80–344-6431, 516-561-6645 or 718-350- 2802.

Falling Home Prices Wreaking Havoc on the Economy

Falling Home Prices WreakingEconomists in the United States are taking the position that falling home prices are a significant problem preventing the economic recovery in the United States. The devaluation of homes in the United States has cost Americans billions of dollars. The declining wealth of American homeowners has had a further negative impact on their confidence that the financial situation will improve in the future.

Richard Curtin, Professor of Economics at the University of Michigan, recently stated “people don’t expect their home to regain value, and that’s really lead to a change in consumer attitudes about the economy that we’ve just never seen before.”

Americans have a confidence problem in their future of their country. They no longer believe that the economy will necessarily improve and financial circumstances will get better. The average income of many American families has declined. The unemployment rate is still over 9%. The expectations for economic growth among Americans have fallen to one of the lowest levels in history.

The Decline of the Real Estate Market

Recent studies by economists have shown the decline in the real estate market affecting all aspects of consumer spending. It is estimated that Americans reduce their spending by $20-$70 a year for every $1,000 decline in the equity in their home. During times of appreciation in real estate, there was a “wealth effect.” The wealth effect made consumers feel that they had liquidity and, therefore, they spent more money. Often more than they actually had. The down side of the wealth effect is, as home values have declined, consumer confidence has declined and there has been a negative reduction in the wealth effect. In other words, consumers feel they’re getting poorer when their houses go down in value and are less inclined to spend money.

Economy Will Eventually Recover

The prevailing view among the economists is that even though things do not look good right now, the economy will eventually get better and Americans will start spending again. Hopefully, appreciating real estate prices will spearhead the economic recovery.

Foreclosure Lawyers

The foreclosure lawyers at the Law Offices of Schlissel DeCorpo can help you if you have a foreclosure problem. Our foreclosure defense lawyers litigate defective mortgages, defective foreclosure lawsuits, predatory lending and all other types of real estate related matters. We can explain the federal laws on foreclosure and how they affect you. We attend foreclosure court conferences for our clients.

In the appropriate situation, we will discuss foreclosure related bankruptcy issues, such as filing a Chapter 7 and a Chapter 13 bankruptcy with you. In bankruptcy situations, there is an automatic stay that goes into effect, ordered by the court, that stops foreclosure from moving forward. In some bankruptcy situations, we can eliminate second mortgages. At the end of the bankruptcy, we can assist you inre- establishing your credit. Feel free to set up a free consultation with us. We will discuss your foreclosure options with you.

Government Turning a Quarter Million Foreclosed Homes Into Rentals

Homes Into RentalsThe President is considering turning a quarter of a million homes taken over by government controlled agencies into rentals. Putting these homes on the market for sale will only further depress the real estate market. The Federal Housing Finance Agency would like to put 250,000 homes that are owned by Fannie Mae, Freddie Mac and the Federal Housing Administration on the market to be rented. These homes have been obtained by government agencies pursuant to foreclosure proceedings. Edward DeMarco, who is currently the acting director of the Federal Housing Agency, has stated that “renting these homes instead of selling them in foreclosure may reduce credit losses and help stabilize neighborhoods and home value.” It is estimated that homes placed on the market for sale in foreclosure sell for 20% less than their actual value.

Foreclosure Crisis Creates Demand In Rental Market

Since the housing crisis started, approximately three million former homeowners are now renting. This has reduced the inventory of homes available to be rented. Families that lose their homes in foreclosure have no choice but to rent. Their credit is ruined by the foreclosure proceedings, they generally have no money for a down payment and their only option is to rent. There are those who claim America is becoming a society of renters. The American dream of owning a single family home may become a broken dream. This dream emanated from the conclusion that owning a home would not only provide you with a stable place to live, but will allow you to develop equity. However, during a time of economic turmoil the value of single family homes has been going down. A home, instead of being a worthwhile investment in real estate for the past few years, has been a horrible investment. Single family homes have been declining in value for the last five years. It is estimated that it may be an additional five to ten years before single family homes start increasing in value. In a market where the value of real estate is going down, renting seems to be the logical choice. Why buy a home today that will be worth less in the future?

I think the Obama Administration is on the right track. I believe instead of foreclosing on homes and selling them at auction, the homes should be rented to prevent the continuing oversupply of homes to the real estate market. This will give the real estate market a greater opportunity to reach equilibrium between buyers and sellers. Down the road, when the real estate market recovers, the government can offer these homes to be sold to their renters or to other worthy individuals or families.

Foreclosure Defense Lawyers

Before your house falls into foreclosure, it is suggested you apply for a mortgage modification. If your mortgage modification program does not meet your needs, unfortunately your home may end up being foreclosed upon. Should you receive a Summons and Complaint in foreclosure, our law office can help you. We will attend foreclosure court conferences on your behalf and speak to the Judge about motivating your financial institution to give you a mortgage modification. We’ll also submit a formal written answer on your behalf. Defenses such as defective mortgages, predatory lending, defective foreclosure lawsuits and other real estate related legal defenses can be interposed on your behalf. Our law firm will use its extensive experience in handling these types of cases, to keep you in your home.

We will also discuss with you foreclosure related bankruptcy options. Filing a Chapter 7 or Chapter 13 bankruptcy may be the best route for you in dealing with your foreclosure situation. Why should you file bankruptcy and the types of bankruptcies available to you would be discussed upon your initial free consultation. Should you file bankruptcy you can sometimes eliminate second mortgages. Bankruptcy will stop foreclosure proceedings from moving forward and stop all debt collection activity against you. Call us for a free consultation.

We will discuss all of your foreclosure and bankruptcy options with you. Our phone numbers are 1-800-344-6431, 516-561-6645 or 718-350-2802. You’ve just visited the Elliot Schlissel, Esq. foreclosure blog.

NY Foreclosure Law Firm Fined Two Million Dollars

NY Foreclosure Law Firm Fined Two Million DollarsSteven J. Baum, P.C. of Amherst, New York, has been fined two million dollars for inappropriate foreclosure legal practices. Steven J. Baum, P.C. is the largest foreclosure law firm in the state of New York. Steven J. Baum, P.C. has agreed, in addition to paying the two million dollar fine, to re-vamp its practices with regard to the handling of pleadings, affidavits and mortgage assignments in New York State and Federal Courts.

The Law Firm has agreed to implement a variety of internal controls regarding its processing and handling of foreclosure proceedings. They have agreed to review original promissory notes received from their clients or custodians of the notes prior to filing new foreclosure lawsuits. These actions will bring the firm in compliance with the order issued by Chief Judge Jonathan Lipman regarding attorneys representing lending institutions.

Mortgage Foreclosure Proceedings

US Attorney Preet Bharara, from the Southern District of New York, stated, with regard to the settlement, “in mortgage foreclosure proceedings, there are no excuses for sloppy practices that could lead to someone mistakenly losing their home.” She stated further that “homeowners facing foreclosure cannot afford to have faulty paperwork or inadequate evidence submitted and today’s agreement will help minimize that risk.”

Baum Law Firm Released from Civil Liability

The Baum Law Firm, upon payment of the two million dollar fine and the imposition of new internal procedures, will be released from potential civil liability under the Financial Institutions Reform, Recovery and Enforcement Act of 1989. The Baum Law Firm acknowledges that it occasionally made inadvertent errors in its legal filings in state and federal courts, which it attributes to human error in light of the high volume of mortgages and foreclosures it handled throughout the State of New York in the wake of the national subprime mortgage crisis.”

It should be noted that this is a settlement. It is not a finding of wrongdoing by the Baum Foreclosure Law Firm. The Baum Law Firm has also agreed to have experienced attorneys supervising all aspects of the preparation of documents and reviewing of documents before they are filed with the courts. In addition, they are implementing a one to two-year training program for their attorneys to bring them in compliance with the rules regarding foreclosure proceedings in the state of New York.

Hopefully, this law firm will live up to its responsibilities in dealing with foreclosure proceedings. Taking a family’s home and putting them on the street is a sad end to the American dream. These proceedings should be handled in a manner that protects the homeowner’s rights and sees to it that homes aren’t wrongly foreclosed upon.

New York Foreclosure Defense Lawyers

The New York City and Long Island foreclosure defense lawyers at the Law Offices of Schlissel DeCorpo can help you if you have a foreclosure problem. Our foreclosure defense lawyers litigate defective mortgages, defective foreclosure lawsuits, predatory lending and all other types of real estate related matters. We can explain the federal laws on foreclosure and how they affect you. We attend foreclosure court conferences for our clients.

In the appropriate situation, we will discuss foreclosure related bankruptcy issues, such as filing a Chapter 7 and a Chapter 13 bankruptcy with you. In bankruptcy situations, there is an automatic stay that goes into effect, ordered by the court, that stops foreclosure from moving forward. In some bankruptcy situations, we can eliminate second mortgages. At the end of the bankruptcy, we can assist you inre- establishing your credit. Feel free to set up a free consultation with us. We will discuss your foreclosure options with you.

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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