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Statutes of Limitations Defenses To Foreclosure Lawsuits

foreclosure defense for homeownersIs it possible to stop paying your mortgage, and live in your home for many years, and stop the bank in its tracks from forcing you to make payments to them or successfully foreclosing on your home? The answer to this question is yes! If your bank fails to sue you, in the State of New York, for a period of six years from the time they accelerated the mortgage, you have a complete legal defense to the foreclosure lawsuit. This defense is known as the statute of limitations. If you plead this defense in your Answer to the Summons and Complaint you can take action to have the bank’s foreclosure lawsuit dismissed!

Defense Available to Thousands of Homeowners

It is estimated there are thousands of homeowners who have not made mortgage payments in the past six years in the State of New York, who have this defense available to them when they are sued in foreclosure. There are a variety of reasons that have caused the banks to delay in bringing foreclosure lawsuits. The federal government has made 69 separate changes to its mortgage modification programs. This has forced lenders, on numerous occasions, to withdraw previous offers to homeowners and extend new terms. This ties the house up in a pre-foreclosure situation for long periods of time.

In addition, many banks have poor practices with regard to maintaining their records concerning mortgages on homes.

Seven Million Foreclosures In America

It is estimated there have been approximately seven million homes foreclosed upon in America since 2006. In addition, there are approximately another one million homes which will go into foreclosure at some time in the next few years.

I personally see cases where there are valid statute of limitations defenses which can be plead in the Answers for my clients. In many of the cases which our office handles the lenders themselves are to blame for a case not moving forward in a foreclosure proceeding for six years.

Owning a Home For Free

Recently, Judge Michael B. Kaplan sitting in a United States Bankruptcy Court in Trenton, New Jersey, wrote an opinion reflecting about the foreclosure crisis. This judge had previously written “no one gets a free house.” In his recent decision Judge Kaplan stated “with the proper measure of disquiet, and chagrin, this court now must retreat from this position.”

Conclusion

One of the first things every foreclosure defense lawyer must look for when a client comes to their office whose home is in foreclosure, is whether a statute of limitations defense can be plead in their Answer.New York foreclosure defense attorney

Court Denies Bank Default Judgement and Appointment of Referee

foreclosure assistance for long island homeownersHomeowners had originally taken out a mortgage with Countrywide Mortgage Company. Countrywide assigned the mortgage to Bank of New York Mellon. Bank of New York Mellon brought a foreclosure lawsuit in Kings County, New York. The foreclosure proceeding was based on the fact the homeowners had failed to make their payments pursuant to the terms of the mortgage.

Non-Party to the Lawsuit Opposes Foreclosure

Rivera, claiming he was not a defendant or a party to the lawsuit but nevertheless an interested party based on his ownership of Ozone Park Management, submitted an affidavit opposing Bank of New York Mellon’s application for a default judgment and appointment of a referee. Justice Francois Rivera sitting in the Supreme Court Part in Kings County which deals with foreclosure lawsuits, found Rivera, a non-party to the lawsuit, had failed to bring a cross-petition for leave to intervene in the case. Since he was not a party to the lawsuit and didn’t intervene in the litigation, his affidavit in opposition to Bank of New York Mellon’s motion could not be considered by the court.

Court Denies The Bank’s Motion

Justice Rivera found the Complaint in the lawsuit was verified by the attorney for the bank. Since it was not verified by a bank officer with knowledge of the transaction, the affidavit of the attorney did not meet statutory requirements. In addition, an affidavit of merit which was submitted from Ussery, an individual representing New Penn Financial, the servicing agent, also did not provide information with regard to what relationship this entity had with Bank of New York Mellon. In addition, the court found the moving papers did not provide documentary evidence showing New Penn Financial even had the authority to make a presentation on behalf of Bank of New York Mellon. Based on the aforementioned, Justice Rivera denied the application for a default judgment and the appointment of a referee brought by the bank.

Conclusion

If you hire a foreclosure defense attorney who digs deep enough, they sometimes find mistakes, omissions, failures to provide appropriate information and other defenses which can be utilized to cause the foreclosure lawsuit to be dismissed.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

Underwater Homes

foreclosure defense lawyer in New YorkThe term “underwater homes” means the home is worth less than the amount owed on its mortgage. Another way of referring to a home that has a mortgage greater than its value is “negative equity”. Most people who are in underwater homes are unable to sell their home or refinance it. At the height of the real estate crisis in America in 2012, approximately one-third of all homes in the United States were underwater. Today, approximately 15% of homes in the United States are underwater. This represents about 12% of all homeowners in the country, or approximately 950,000 homeowners have homes which are underwater. In many instances, homeowners’ homes are so far underwater that the mortgage is twice the value of their home.

Real estate values have been going up recently. However, many homes in America are so far underwater these homes will never reach a point of having equity in them.

Lack of Funds and Bad Credit

This can result in the homeowner trying to rent a home when they don’t have sufficient funds to pay the security and one month’s rent on a rental apartment or rental home. They also will most likely have a low credit score because they are behind on their mortgage payments. Landlords do not like to rent homes to families that have bad credit.

What Should Homeowners With Underwater Homes Do?

The best recommendation would be to consult with a foreclosure defense attorney. What homeowners of underwater homes should not do is move out and abandon their homes. The fact their home is underwater and they are behind on their mortgage, does not mean they are in imminent threat of losing their home and being forced out of it. In most situations, it is in the homeowner’s best interest to continue to live in their home. Many homeowners do not understand the full implications of simply moving out of their home, abandoning it and not paying their mortgage.

Conclusion

Don’t move out of your home solely if you are behind on your mortgage payments. Try to obtain a mortgage modification. Seek out an experienced foreclosure lawyer and review your options with him or her.New York foreclosure defense lawyer

New York Banks Agree to Maintain “Zombie Properties”

foreclosure defense for homeowners on Long IslandEleven banks in the State of New York have agreed to establish a program to maintain and monitor homes in foreclosure which are vacant. They have taken this action because of pressure from the New York State Attorney General, Eric Schneiderman, and complaints by neighbors surrounding these properties which have been made to the financial institutions. These eleven banks and credit unions represent approximately three-quarters of all of the houses in foreclosure in the Metropolitan New York market.

Bank To Check To See If Homes Are Vacant

The banks have agreed they will check all properties within 60 days of the loans becoming delinquent. The checking will involve an external inspection. In addition, the financial institutions will check each property in foreclosure every 25 to 35 days thereafter. If they reach a decision that the foreclosed home has been abandoned by its owners, they will post a notice with their contact information on it. In addition, they will change one of the door locks. They will also board up broken windows and doors and remove nuisance features. In addition, they will take action with regard to safety issues. All of these properties will be placed on a list to be shared with municipalities throughout the State.

The Eleven Banks

The eleven banks which have agreed to this process are: Ridgewood Savings Bank, M&T Bank, Bethpage Federal Credit Union, Astoria Bank, Green Tree Servicing, PHH, Northstar, Ocwen, CitiMortgage, Bank of America, and Wells Fargo.

More and More Zombie Homes

Attorney General Eric Schneiderman who had previously submitted legislation to the State Legislature, noted that zombie foreclosures have increased more than 50% recently. He claims there are approximately 17,000 zombie homes being foreclosed on. Zombie homes place burdens on the communities in which they are located. These burdens deal with maintenance costs, property tax issues, and vandalism of these homes.

New York foreclosure defense lawyerElliot S. Schlissel is a foreclosure lawyer representing homeowners throughout the Metropolitan New York area. His motto is, “I will keep you in your home.”

What Happens When You Fall Behind On Your Mortgage?

To watch today’s video blog, please click on the link below:

http://youtu.be/jZT2uG0JdTI

Elliot 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.

Foreclosure Lawsuit Dismissed a Second Time!

foreclosure defense lawyer for homeownersThe Federal National Mortgage Association (FNMA) brought an application in a foreclosure case for summary judgment in the year 2010. The summary judgment motion was denied because there were defects in the foreclosure lawsuit. FNMA in 2014 brought a second foreclosure lawsuit. In this lawsuit they made a similar motion for summary judgment seeking the same relief they had sought in their prior motion. The court denied the motion again.

Justice Alice Schlesinger, sitting in a Foreclosure Supreme Court Part in New York County, dismissed the lawsuit a second time. Her decision stated there were numerous deficiencies in the papers submitted by the attorneys for FNMA. FNMA’s attorneys claimed none of the defects in their papers were significant. Justice Schlesinger found they had four years to correct the problems which existed in the original lawsuit and they still hadn’t dealt with these issues. Justice Schlesinger was “troubled” by the ambiguous role the Mortgage Electronic Registration Systems, Inc. (“MERS”) had in the assignment process with regard to this mortgage. She also noted in her decision there were a number of scriveners errors in the Complaint submitted by the bank. Her decision stated these errors dealt with significant issues. Her decision stated there was an issue concerning who had possession of the note at the time the foreclosure lawsuit was initiated. Justice Schlesinger found that FNMA sought to amend their Complaint five years after initiating the original proceeding. The court declined FNMA’s leave to amend and dismissed the foreclosure lawsuit.

Conclusion

Experienced foreclosure defense lawyers who carefully review the facts of a case can come up with winning strategies to have these cases dismissed.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 I

foreclosure defense help in New YorkPhony 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.New York foreclosure defense attorney Island

The Foreclosure Process: The Initial Steps

foreclosure defense for homeownersThe first step in a foreclosure proceeding is the bank sending the homeowner a letter accelerating the mortgage. The acceleration letter advises the homeowner the financial institution (lender) will call in the entire balance of the mortgage, which represents the total amount due, unless the homeowner becomes up to date on his or her mortgage payments by a specified date. Most banks send an acceleration letter after the homeowner falls approximately three months behind on their mortgage payments. However, there is no specific rule which requires a bank to send an acceleration letter when the homeowner is three months behind.

Falling Behind On Your Mortgage Payments

The homeowner technically defaults on the payment of the loan on their home when they become one month late on their mortgage payments. However, as indicated earlier in this article, acceleration letters are almost never sent out prior to the homeowner being three months behind on their mortgage.

Ninety Day Pre-Foreclosure Filing Notice

New York State has a statute which requires the financial institution holding the mortgage to send out a notice a minimum of ninety days before they initiate a foreclosure legal action by filing a Summons and Complaint in the County Clerk’s office of the County in which the home is located. There are very specific rules and notice requirements concerning the ninety day pre-foreclosure filing notice. This notice also must list at least five not for profit organizations which can provide information or counseling to homeowners with regard to the problems they are having in making their mortgage payments.New York foreclosure defense attorney Island

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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