foreclosure defense attorneys

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

New Federal Mortgage Disclosure Requirements

May 14, 2014 by Elliot S. Schlissel

The Consumer Financial Protection Bureau has propounded new mortgage disclosure requirements. Financial institutions and mortgage lenders will need to provide individuals and families who take out mortgages with much more detailed disclosure material at the time of closing on the loan. The new disclosure requirements replace the existing Truth in Lending Statements, HUD-1 Settlement Statements and the present Good Faith Estimate Disclosure Statements required to be provided by financial institutions.

Three Business Day Requirement

All individuals applying for loans must receive, under these new requirements, loan estimates within three business days. These loan estimate disclosure documents must provide the specific loan terms and the estimated expenses the borrower will incur at the time of closing on the transaction. A second additional disclosure statement will also have to be provided to the individuals taking out a mortgage within three business days before the actual closing takes place. This disclosure document will need to provide a detailed accounting of all aspects of the mortgage loan transaction.

Effective Date August 1, 2015

The new rules promulgated by the Consumer Financial Protection Bureau will go into effect on August 1, 2015. All loans processed after that date will require the dual disclosures discussed above.

Financial institutions and mortgage companies have been modifying their procedures to deal with these new rules and regulations that will go into effect in approximately a year and a quarter. These changes to the disclosure requirements which providers need to give consumers, are the most significant changes and modifications regarding mortgage loan disclosures that have taken place in decades. It is hoped that these new disclosure requirements will educate consumers as to how much they are borrowing, how much it will cost them, and whether they can afford to take the mortgage they seek to obtain.

Elliot S. Schlissel is a foreclosure attorney. He has helped scores of New Yorkers stay in their homes and fight off foreclosures. Elliot and his staff of attorneys also assist their clients in filing Chapter 7 bankruptcies, Chapter 13 bankruptcies, and applying for mortgage modifications. Elliot’s greatest satisfaction is when he can help the families he represents continue to live in their homes.

Filed Under: Bankruptcy, Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: bankruptcy proceedings, Chapter 7, foreclosure, foreclosure defense, foreclosure defense attorneys, mortgage modification attorneys

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

Bank Fails to Prove it Has Standing on Date Foreclosure Action Started

April 17, 2014 by Elliot S. Schlissel

Justice David Schmidt, sitting in the Supreme Court Foreclosure Part in Kings County recently had a case before him concerning a foreclosure on a home where the defendant submitted a lack of standing defense. The foreclosure action was brought by US Bank as the trustee for Morgan Stanley Mortgage Loan Trust (hereinafter referred to as “MSMLT”). During the course of this proceeding, the attorneys for MSMLT brought a summary judgment motion against the defendants. (A summary judgment motion is a motion that alleges there are no questions of fact concerning the issues in the case and therefore the moving party should be entitled to judgment without the necessity of having the case go to trial).

The defendants submitted seven affirmative defenses in their answer. One of those affirmative defenses alleged the bank lacked the standing to bring this foreclosure lawsuit.

Lack of Standing

MSMLT argued that the defendants defaulted on the note due to the failure to make timely mortgage payments. The defendants had not made mortgage payments for a period of two years before MSMLT had started the lawsuit to foreclose on the their home. MSMLT alleged in their pleadings they were the holder of the note and mortgage which had been endorsed in blank and delivered to them before the lawsuit was initiated.

Justice David Schmidt denied the plaintiff’s application for summary judgment. He took the position the attorneys for MSMLT had failed to offer evidence of their standing to bring the foreclosure proceeding against the defendants. They failed to prove they had the note at the time of the commencement of the action. Judge Schmidt found there were triable issues of fact regarding delivery of the note from the original lender and endorser, Hemisphere National Bank, to MSMLT. The court further stated in its decision MSMLT made conclusory statements it had “continuous possession” of the note. These conclusory statements were not sufficient to establish standing in the eyes of the judge. The judge ruled plaintiff’s allegations that equated the possession of the note with the Uniform Commercial Code’s requisite delivery requirements was not convincing and therefore he denied the motion.

Conclusion

In each and every foreclosure lawsuit, the attorneys for the homeowners should allege a lack of standing defense. Our office has had numerous cases where banks have been unable to successfully foreclose on our client’s property due to their failure to prove they had standing to initiate the foreclosure lawsuit.

Elliot S. Schlissel is one of the leading foreclosure lawyers in the Metropolitan New York area having helped scores of his clients to stay in their homes and fight foreclosure lawsuits.

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

Judgment of Foreclosure and Sale Vacated The Case To Be Brought Back to the Foreclosure Settlement Part

April 1, 2014 by Elliot S. Schlissel

foreclosure defense lawyer JP Morgan Chase had initiated a foreclosure legal action and had been granted summary judgment. In addition, a referee was appointed to compute with regard to the sale. The property never was sold at auction. JP Morgan Chase thereafter brought a proceeding before Justice Francesca Connolly in Westchester Supreme Court requesting the Order of Reference and Judgment of Foreclosure and Sale be vacated. They took this action because they claim they were unable to comply with Administrative Order 431-11. Justice Connolly granted JP Morgan Chase’s unopposed application. The Order of Reference and Judgment of Foreclosure and Sale were vacated. Thereafter, Chase brought a motion for summary judgment again and for another Order of Reference. The court decided the defendants were entitled to have the matter sent back to the foreclosure settlement conference part.

Since the property involved was residential which was occupied by the owners of the property, and the action was started before September 1, 2008, and a final judgment had not been entered, it was appropriate that the defendants had a statutory right to request the matter be sent back to the foreclosure conference part to try to settle the matter with the bank.

Elliot Schlissel is a foreclosure lawyer with more than 45 years of legal experience, who has successfully represented homeowners throughout the Metropolitan New York area in foreclosure lawsuits.

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

Foreclosure Proceeding Dismissed: Bank Had No Standing

March 28, 2014 by Elliot S. Schlissel

A foreclosure lawsuit was brought by Deutsche Bank in Kings County, New York, Supreme Court. The Judge in the Part was Larry Martin. During the course of the proceeding, Deutsche Bank brought a motion for summary judgment and the defendant, Johnson, cross moved for summary judgment and dismissal of the complaint. Summary judgment motions basically state there are no issues of fact that need to be litigated. With regard to a summary judgment motion, a party has to establish that there are no facts in controversy concerning the position that party takes. Here, each side was seeking a win based on the idea the other party was completely wrong. Deutsche Bank argued, in their application to the court, Johnson had not made payments under the note. Johnson, in his motion, challenged the debt. He also claimed that Deutsche Bank was not the owner of the note. Johnson had requested the original note, the mortgage and a mortgage modification that she had allegedly entered into, be produced. Johnson claimed that Deutsche Bank had failed to properly assign these mortgages.

No Evidence of a Written Assignment of the Mortgage

Judge Larry Martin, in his decision, held evidence was not produced of a written assignment of the note from Deutsche Bank to OCWEN. Judge Martin held Deutsche Bank had to prove the note was physically delivered to it before November 3, 2011, the day the action was commenced. The attorneys for Deutsche Bank said that they had the original note and mortgage. However, the law firm did not provide documentation as to the time they came into possession of the note and mortgage.

Judge Martin, in his decision, held the only evidence Deutsche Bank submitted with regard to their standing to bring this lawsuit was inconclusive. The fact that they had failed to submit a written assignment of the note or documentation to establish the physical delivery of the note caused their claim to fail. Johnson’s motion to dismiss the lawsuit was granted.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: foreclosure attorney, foreclosure defense attorneys, mortgage assignment, mortgage modification, New York foreclosure attorney

Judge Sanctions Bank for Foreclosure Activities: The Appellate Division Reverses the Sanctions

March 26, 2014 by Elliot S. Schlissel

foreclosure defense lawyers John Lucido, who had been a mortgage broker, had taken out a mortgage loan, in March of 2007, of approximately $500,000 with regard to his Rocky Point, Long Island New York home. He was unable to make his mortgage payments and in 2009, Bank of America brought a foreclosure lawsuit in Suffolk County, New York.

Foreclosure Court Conferences

There were numerous foreclosure mediation conferences. However, Lucido had been ill and his wife had died during the course of the litigation. This complicated the issues that were dealt with at the foreclosure conferences. At the time of the foreclosure mediation conferences, Lucido represented himself. The conferences were held pursuant to New York Civil Practice Law and Rules Section 3408, which states “both the plaintiff and the defendant shall negotiate in good faith to reach a mutually agreeable resolution with regard to residential foreclosure lawsuits.”

Judge Spinner’s Ruling

The case was heard before Judge Spinner sitting in a Foreclosure Court Part in Suffolk County. Judge Spinner, in April 2012, ruled Bank of America had “deliberately acted in bad faith.” He had made this ruling because they had delayed six months in producing a pooling and servicing agreement. Judge Spinner also stated Bank of America gave “material misstatements of fact” which had been calculated to deceive the court and also cause delay of the court proceedings. Judge Spinner went on and held the bank had misinformed the court that the pooling and servicing agreement which controlled Mr. Lucido’s mortgage specifically forbade principal reductions. Later the bank acknowledged there was no bar to principal reductions in the pooling and servicing agreement.

Judge Spinner in his decision forever restrained Bank of America from “demanding, collecting or attempting to collect, directly or indirectly” sums related to the $493,209 mortgage that were either “interest, attorneys’ fees, legal fees, costs and disbursements.” He had held the bank could only collect principal and any funds advanced by the bank related to property taxes or insurance on the property. In addition, Judge Spinner imposed $200,000 exemplary in damages against the bank. This cut the bank’s principal to $293,219.

The Appellate Division Overrules

The Appellate Division of the Second Department, an appeals court, overruled Judge Spinner’s decision in its entirety. The Appellate Division held he did not have the authority to impose that level of penalties against Bank of America. The Appellate Division held the bank’s conduct did not justify the sanctions imposed by Judge Spinner and sent the case back to Judge Spinner for further proceedings. The appellate court took into consideration Lucido’s “unfortunate situation.” However, they held the record on appeal “reveals the conduct of the plaintiff in this case was not so egregious as to merit the imposition of sanctions against it.” The fact Bank of America refused to give Lucido a principal reduction and they had delayed in producing documents did not, in and of itself, amount to a failure to act in good faith.

Conclusion

Judge Spinner’s remedy was unusual, but there have been other cases that have upheld the tolling of interest when banks do not negotiate in good faith. I believe Judge Spinner was looking to send a message to financial institutions to be more cooperative at the foreclosure mediation conferences. Unfortunately, the Appellate Division did not agree.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: foreclosure defense attorneys, foreclosure mediation, foreclosure proceedings, mortgage modification

Beware of Mortgage/Foreclosure Fraud – Part I

March 11, 2014 by Elliot S. Schlissel

foreclosure defense attorneys The number of homes going into foreclosure on a national basis has been decreasing. However, the number of homes in the Metropolitan New York area that have been placed into foreclosure by financial institutions has not been going down during the past few months.

Homeowners who find themselves with financial difficulties can be vulnerable to fraudulent mortgage and foreclosure schemes. In California, a woman by the name of Jewel Hinkles swindled approximately 1300 homeowners out of $5,000,000 through a group of companies which she claimed were in the business of buying distressed properties from the homeowners. This is one of many examples of fraudulent foreclosure/mortgage schemes that have been perpetrated on individuals finding themselves in financial difficulty and unable to make mortgage payments on their home.

Avoiding Foreclosure Scams

The most important thing to take into consideration in avoiding being defrauded is if a deal sounds too good to be true, it probably is fraudulent! Foreclosure proceedings are subject to public disclosure in the courts. It is therefore easy for criminals who seek to scam homeowners by obtaining information about their foreclosure and making false representations to the beleaguered homeowner.

Another type of foreclosure scam which is common involves alleged foreclosure counseling companies. Sometimes these companies solicit business with flyers dropped off in homeowners’ mailboxes or they actually come knocking on the door of homeowners whose homes have been placed into foreclosure by financial institutions.

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

Methods of Avoiding Foreclosure

February 28, 2014 by Elliot S. Schlissel

Everyone who buys a home expects to be able to make their mortgage payments. Unfortunately, there are numerous hardships and problems in one’s life that may cause you to fall behind in making your mortgage payments. A death in the family, the loss of a job, a divorce, a disability or medical problem are just a few of the hardships that can occur that can cause you to fall behind on your mortgage payments.

Foreclosure is the start of proceedings to take back a home for non-payment of the mortgage. There are a number of strategies that can be utilized by a homeowner to avoid having their home being foreclosed.

Loan Forbearance Agreement

A loan forbearance agreement is a temporary arrangement between the homeowner and the bank. The purpose of the forbearance agreement is to give the homeowner a reasonable period of time to catch up on his or her mortgage payments. This gives the homeowner time to catch his or her breath! If the homeowner makes the agreements under the forbearance agreement they can become up to date on their mortgage.

Loan Modifications

The Home Affordable Mortgage Program (HAMP) was created by President Obama during his first administration. It still remains in effect in his current second term as President of the United States. This is a federal program that virtually all financial institutions are part of. The benefit of this program is it gives the homeowners who have fallen behind on their mortgage a chance to reduce their mortgage payments. The unfortunate part of the program is that it is an extremely poorly managed program by the individual banks and only approximately 1 in 5 people who apply for mortgage modifications are successful in obtaining them. In addition to President Obama’s mortgage modification program, many banks have their own internal mortgage modification programs. In theory, mortgage modification programs take into consideration the home’s current value, interest rates and the ability of the homeowner to make payments under this program.

Negotiated Short Sale

A negotiated short sale is a transaction where the homeowner contacts the bank and advises the bank they would like to sell the house which is currently under water (currently worth less than the amount of the mortgage). The bank, in a short sale, appraises the house and in the appropriate situation agrees that the house can be sold for less than the amount of the mortgage and the bank will satisfy the mortgage for less than they are owed. The writer of this article is not a big proponent of short sales. Short sales should only be undertaken at the end of the foreclosure process to avoid a deficiency judgement.

Bankruptcy

In the event you file a bankruptcy, you obtain a stay from a Federal Court that prevents a lender from moving forward with a foreclosure lawsuit in a New York State Court. In a Chapter 13 bankruptcy you enter into a plan to become current with your mortgage over a period of up to 5 years. In a Chapter 7 bankruptcy you eliminate the personal loan obligation portion of your debt. Therefore if the bank forecloses on your home, all they are entitled to receive is what they obtain from the sale of the house. They will not be able to obtain a deficiency judgment against you.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: bankruptcy, foreclosure, foreclosure defense attorneys, foreclosure proceedings, Mortgage Modifications attorney

Qualifying for a Mortgage

February 26, 2014 by Elliot S. Schlissel

foreclosure defense attorneys The purchase of a single family home is usually the largest single purchase made by Americans during the course of their lifetime. Before you can purchase a home, it is strongly suggested you look into your ability to qualify for a mortgage to help you pay for the home. There are a number of significant factors taken into consideration by financial institutions when underwriting a mortgage.

Are You Employed?

The underwriters of mortgages at financial institutions are interested in your employment history. They are especially interested in if you are currently employed. If you are self employed, the underwriters may want detailed information about the capacity in which you are self employed. If you are working for a company or business, they are going to ask you questions as to how long you have worked in this position for, and what were your prior positions. It is especially important that you maintain good records concerning your past three years tax returns, bank statements concerning your checking and savings accounts, pay stubs and other material necessary to verify your employment history.

The Down Payment

If you are looking to obtain a conventional mortgage, most banks will loan you up to 80% of the cost of the house. This means you will have to come up with 20% of the funds on your own. In cases where you have a problematic credit history, you may need to put down more than 20% of the cost of the house as a down payment.

Closing Costs

There are numerous closing costs related to buying a home in New York. There are bank fees. There are underwriting fees. There are points payable to the bank. There are attorneys’ fees for your attorney and the attorney for the financial institution. There is the prepayment of taxes on the house. There is the payment of casualty insurance on the house. You will have to reimburse the seller for all of the oil in the oil tank. In addition, there are numerous other types of closing costs. It is estimated that closing costs in New York will run anywhere from $5,000 to $15,000 to purchase a home. You should carefully look into the closing costs with the attorney representing you on the real estate transaction.

Credit Scores

The financial institution will order credit reports for those individuals whose names will appear on the mortgage of the home. You should obtain a copy of your credit report in advance. In the event there is inaccurate information on your credit report, you should immediately take action to correct this. In the event your credit score is not high enough to meet your bank’s requirements to obtain a mortgage, there are a variety of things you can do to boost your credit score prior to submitting a mortgage application.

The Mortgage Loan Application Process

The process of obtaining a mortgage loan can be aggravating for the prospective homeowners. Financial institutions currently are asking for significant amounts of information from a prospective homeowner to determine whether you are a good risk and that you have the ability to repay your mortgage loan. Hopefully this article will open your eyes as to the various areas you should look in before contacting a financial institution and starting the process of trying to obtain a mortgage.

Elliot Schlissel has been representing clients in real estate related matters for more than 45 years. Elliot and his staff of attorneys represent homeowners who are buying and selling homes. In addition, Elliot and his staff of attorneys provide foreclosure legal defense for their clients.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure defense attorneys, Mortgage Modifications attorney, real estate

Foreclosure Dismissed: Bank Makes Technical Mistake

New Federal Mortgage Disclosure Requirements

Homeowner Seeks to Rescind Mortgage Loan in Foreclosure Proceeding

Bank Fails to Prove it Has Standing on Date Foreclosure Action Started

Judgment of Foreclosure and Sale Vacated The Case To Be Brought Back to the Foreclosure Settlement Part

Foreclosure Proceeding Dismissed: Bank Had No Standing

Judge Sanctions Bank for Foreclosure Activities: The Appellate Division Reverses the Sanctions

Beware of Mortgage/Foreclosure Fraud – Part I

Methods of Avoiding Foreclosure

Qualifying for a Mortgage

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