Banks Acting in Bad Faith

mortgage modification attorneysIn the case of Federal National Mortgage Association v. Singer, Index No. 850039/2011, Justice Moulton sitting in a Supreme Court Foreclosure Part in New York County, ruled the two banks involved should forfeit more than $100,000 in interest on loans to Mr. & Mrs. Singer. This was a sanction for the failure of the banks to act in good faith with regard to negotiating a mortgage modification with the Singers.

History of the Case

In 2004, the Singers bought two apartments in Manhattan which were next to each other. They gutted and renovated the apartments. When they purchased each of the apartments they took out a separate mortgage on each of the two apartments. After the apartments were renovated, New York taxed the two apartments as a single residence. In 2008, the Singers had a downturn in their income. They used all of their savings to try to keep up with the mortgage payments, taxes, common charges, and expenses which totaled in excess of $5,000 per month. The mortgages totaled more than $500,000 and had interest rates of 7.4% and 6.75%.

Mortgage Consolidation

Mrs. Singer, on numerous occasions, tried to consolidate the two mortgages at a lower interest rate. Initially, she applied to Countrywide, the original lender on the mortgages. Countrywide refused to extend the term or lower the interest rates on the mortgage. Countrywide took the position the Singers did not qualify as distressed borrowers. Their monthly payment on each loan did not exceed 31% of their combined monthly income. In response to this argument Judge Moulton said the bank’s analysis “resulted in an absurd result.” He said this was symptomatic of “many of the faults that plague the current system of refinancing residential property that is in default and/or in foreclosure.”

The loans were eventually sold to Bank of America and the Federal National Mortgage Association (Fannie Mae). Approximately a year and a half later a foreclosure lawsuit was initiated. The Singers again applied for a loan modification. Five months later their modification request was denied. The Singers also offered to pay $18,000 in accumulated interest as part of the loan modification.

Counsel for the Singers had on various occasions suggested balloon mortgages. These mortgages enable residents to make their mortgage payments and help the banks to receive the total amount due and owing to them. This is especially true in light of the fact the apartments owned by the Singers were worth substantially more than the $500,000 in combined mortgages.

Settlement Court Conference

The Singers had attended 5 court settlement conferences. At each of these conferences both Bank of America and Fannie Mae refused to meaningfully negotiate mortgage modifications.

Conclusion

Banks who do not cooperate in negotiating mortgage modifications in good faith can be punished by the courts.New York foreclosure defense lawyer

The Summons

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Elliot S. Schlissel is a foreclosure lawyer. He has helped hundreds of New Yorkers stay in their homes. He fights foreclosure lawsuits throughout the Metropolitan New York area and helps his clients obtain mortgage modifications. Elliot and his staff of attorneys can be reached 7 days a week.  He and his associates can be reached by calling 516-561-6645 or 718-350-2802 or by sending an email to schlissel.law@att.net.

What Is A Default Judgment?

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Elliot S. Schlissel is a foreclosure defense attorney who helps homeowners fight foreclosure lawsuits and obtain mortgage modifications.  He and his associates are available for consultation by calling 516-561-6645 or 718-350-2802 or send an email to schlissel.law@att.net.

Long Island Foreclosure Rates Continue to Climb

foreclosure defense attorney on Long IslandForeclosure rates for both Nassau and Suffolk Counties, on Long Island, are the highest in New York State. Approximately 3% of the homes in Suffolk County are in foreclosure. In Nassau County, approximately 2 ½% of all homes are in foreclosure. There are more than 27,000 pending foreclosure cases in Nassau and Suffolk Counties.

The Housing Crisis

The housing crisis has hit Long Island homeowners harder than homeowners in other areas of the State. Superstorm Sandy contributed to this problem by devastating many homes on Long Island. Thomas DiNapoli, the Comptroller of New York State, recently stated “if you are on Long Island and you have a huge mortgage, based on a price that no longer was attainable, you could easily get ‘underwater’.” Underwater refers to homes which owe more money on their mortgages than the home is worth.

While in many other areas in New York State the foreclosure crisis is easing, it continues to get worse in both Nassau and Suffolk Counties. In January of 2015, the number of homes going into foreclosure in Nassau County jumped by almost 20%. Some of this increase in homes being foreclosed upon was related to the delayed impact of Superstorm Sandy, which hit Long Island in 2012, has had on homes going into foreclosure. In the State of New York, approximately 1 in every 90 homes is in foreclosure. While in Nassau County 1 out of every 40 homes are in foreclosure, and in Suffolk County 1 out of every 35 homes are in foreclosure. Comparing this to the foreclosure rate in New York City which has only 1 out of every 116 homes in foreclosure shows the huge problem faced by homeowners in Nassau and Suffolk Counties.New York foreclosure defense lawyer

What to Look For In a Foreclosure Attorney

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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.

Rescission of a Loan

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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.

Truth in Lending Violations As a Defense

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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 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

Truth in Lending Disclosures

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Elliot S. Schlissel is a foreclosure defense attorney.  He has been representing homeowners for more than 45 years.  He and his associates can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

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

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