foreclosure defense attorneys

Hidden Expenses When Buying A Home – Part I

February 10, 2014 by Elliot S. Schlissel

There is a common misunderstanding with regard to the total of all expenses new homeowners are exposed to when they purchase a home. Homeowners often believe all they have to do is put the down payment down, get the balance of the funds for the mortgage from a bank, and this will be sufficient to purchase a home. However there are numerous other expenses prospective homeowners face when purchasing a home.

Down Payment

I’ve already mentioned the down payment. In most real estate transactions, the homeowners puts 10% of the purchase price down at contract, and an additional 10% at the time of closing. This amounts to a total of 20% of the purchase price. If the homeowners are obtaining a Federal Housing Authority (FHA) mortgage, their down payment may be as little as 5% to 10% of the purchase price of the home.

Engineering Inspection

A home is the largest purchase a family will make during the course of their lifetime. Before jumping into the purchase of a home, it is usually necessary to have an engineer do a thorough inspection of the home to make sure the roof doesn’t leak, the electrical system is adequate, the plumbing doesn’t leak, the foundation is secure and numerous other items in the home are in good condition. Home inspections can cost anywhere from $500 to $600 in the Metropolitan New York area by qualified engineers.

Expenses of Moving

When a family moves into a home, they usually hire a moving company to help them pack up their possessions and move them to their new home. Moving expenses can cost a homeowner anywhere from $1,500 to $6,000. If the move is cross country, or over a long distance, it could cost significantly more.

Elliot Schlissel is a foreclosure attorney representing homeowners in the buying and selling of homes, and fighting foreclosures when banks seek to take their homes away from them. In addition, Elliot Schlissel and his attorneys assist homeowners in obtaining mortgage modifications and to avoid losing their homes in foreclosure proceedings.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: costs of buying a home, foreclosure, foreclosure attorney, foreclosure defense attorneys, mortgage modifications, Mortgage Modifications attorney, New York foreclosure defense lawyers

Deficiency Judgments After Foreclosure

February 7, 2014 by Elliot S. Schlissel

Deficiency Judgments

A deficiency judgment can be taken against you when your property is sold at a foreclosure sale for less money than you owe on the mortgage. By example, if you owe on your mortgage $500,000 and your property sells in foreclosure for $300,000, the financial institution can take a deficiency judgment against you for the balance of the $200,000 that you owe. Lenders will go after deficiency judgments, generally speaking, if they feel you have an ability to pay the balance of the judgment off.

Deficiency judgments are not automatic. The attorneys for the foreclosing bank must engage in further legal action to obtain a deficiency judgment against you. In cases where the financial institution does not believe that you have the capability of paying a deficiency judgment, they generally won’t go after a deficiency judgment.

How To Avoid Deficiency Judgments?

There are a variety of ways of avoiding a deficiency judgment. One of these involves selling your home at a short sale and having the bank agree they will not go after you for any deficiency between the amount the property is sold for and how much you owe. The second route to avoiding a deficiency judgment is filing a bankruptcy.

Deficiency judgments are taken against you in New York State Courts. If you file a bankruptcy in the United States Bankruptcy Court, under federalism, the federal court that you file the bankruptcy in is a higher court than the New York State court. You can discharge any deficiency owed by you with regard to your mortgage by filing a Chapter 7 bankruptcy in a Federal Court. In addition to avoiding a deficiency judgment, you can also avoid credit card debts, personal loans and other financial obligations by filing a bankruptcy.

Foreclosure Lawyer

There are a specific set of laws dealing with deficiency judgments in foreclosure lawsuits. These statutes are complicated. Each and every foreclosure situation is a separate individual case with different facts and different circumstances. The purpose of this article is to educate you that deficiency judgments can occur. Should you have concerns about a deficiency judgment or other issues in foreclosure legal action, it is important you contact an experienced, knowledgeable foreclosure defense lawyer to represent you.

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

Can’t Read or Write English? Not An Excuse in a Foreclosure Proceeding

February 3, 2014 by Elliot S. Schlissel

Justice Thomas Whelan, sitting in the Supreme Court of Suffolk County, was recently presented with a case involving a litigant who could not read or write in the English language, and also did not understand what was involved in the service of process in starting a foreclosure lawsuit against him. One West Bank brought a foreclosure proceeding against Navaro. They took this action because Navaro did not pay her mortgage obligations. Navaro brought an application to the court seeking to dismiss One West’s lawsuit against her. One West had moved for a default judgment within a year of the case being removed from the foreclosure conference mediation part. One West was able to establish even though they had delayed for approximately a year, they had a reasonable excuse for the delay and their claim in foreclosure was valid.

Ignorance of the Law – No Excuse

Navaro brought a cross motion. She sought to remove the default. She claimed a reason for failing to submit a written answer to the summons and complaint after being served was because she could not read and write in the English language. In addition, she claimed she did not understand her responsibility to submit a written answer to the summons and complaint served upon her in the foreclosure proceeding. The court denied Navaro’s cross motion. Justice Whelan held confusion or ignorance of the law and/or the legal process did not in and of itself constitute a reasonable excuse for failure to answer the summons and complaint or appear in court regarding the case. The court granted One West’s motion to obtain a default judgment and to appoint a receiver to compute the amount owed and subsequently thereafter sell the house.

Conclusion

If you get served with a summons and complaint and you are not sure what you need to do, hire a foreclosure defense lawyer. Ignorance of the law is not an excuse in a foreclosure proceeding.

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

Foreclosures and the Rental Market on Homes

January 27, 2014 by Elliot S. Schlissel

foreclosure defense attorneys The large number of foreclosures due to the housing bubble in the United States has created an abundance of homes available for rental purposes. Approximately 20% of all single family homes are now rentals. The large number of single family homes being rented is related to the boom and bust of the recent real estate cycle. The significant number of homes sold in foreclosure proceedings have created an availability of homes for rental by families. In addition, millions of homeowners have lost their homes in foreclosure lawsuits. These families need a place to live. The availability of other homes that have been foreclosed on can be rented by them to meet their need for a place to live.

In addition to homes being foreclosed, homeowners who need cash flow are putting their homes on the market as rentals. They are even doing this during the foreclosure process. Since the foreclosure process in many states takes years, homeowners can literally move out of their home, charge rent to a tenant, and put the rental money in their pockets and not make their mortgage payments.

Rentals are Better than Vacant Homes

Officials in local areas have a preference for foreclosed homes to be rented instead of being left vacant. Vacant homes can be a blight on a neighborhood. They can invite trespassers and can be utilized by children for inappropriate purposes.

Although renting a home does provide a family with a place to live, it may not be their first choice. Their more likely first choice would be to stay in the home they had owned and not to have lost it in foreclosure.

Elliot S. Schlissel is a foreclosure defense lawyer representing homeowners, fighting financial institutions and banks to stay in their homes. Elliot and his associates have been protecting homeowners and keeping them in their homes for more than 45 years.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: financial crisis, foreclosure, foreclosure attorney, foreclosure crisis, foreclosure defense, foreclosure defense attorneys

New York’s New Mortgage Proposal

January 22, 2014 by Elliot S. Schlissel

New York is considering a new proposal which would provide an incentive for banks to modify mortgages on homes which are under water. Under this new proposal, the financial institutions would reduce the amount of the mortgage on homes under water. The mortgage amount would then be brought into conformity with the value of the home. In exchange for the reduction in the mortgage, the bank would be entitled to share in the profits if the home eventually increases in value and is sold. This new proposal will require changes in various state regulations. Under the current law, banks cannot enter into these types of arrangements with homeowners.

Governor Cuomo Backs New Mortgage Proposal

Governor Andrew Cuomo stated this initiative will help keep families in their homes and out of foreclosure, while at the same time reducing potential loses for investors. He went on to further state with regard to this new proposal “that’s good for homeowners, good for local neighborhoods, and good for the long term strength of the housing market.”

Unfortunately, pursuant to existing federal rules and regulations, the large majority of home loans in New York cannot qualify under this program. This is because Fannie Mae and Freddie Mac, the two federal agencies which purchase mortgages for approximately two-thirds of all home loans in the State of New York, do not allow forgiving outstanding mortgage balances.

The new proposed program would be available to homeowners who owe more on their homes than their homes are worth and have tried to obtain mortgage modifications and have been unsuccessful. Under this program, banks would provide disclosure to the homeowners concerning the terms of the new loan modifications and how much of the profits the bank would receive upon the sale of the home. The proposal would limit the bank to either 50% of the increase in value in the home or the total amount forgiven under the mortgage, whichever is less.

Homeowners Reluctant to Share in Appreciation

Interviews with a number of homeowners with regard to this new proposal, indicated they were reluctant to share in the appreciation of their homes with banks.

Conclusion

The program is an excellent idea. Homeowners whose homes are under water and are behind on their mortgage would be given a second chance to stay in their homes and have their mortgage modified to a realistic amount they could afford.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure defense, foreclosure defense attorneys, mortgage modification, mortgage modification denied, Mortgage Modifications attorney, New York foreclosure defense lawyers

Negotiations with Bank Does Not Stop Foreclosure Lawsuit

January 14, 2014 by Elliot S. Schlissel

A foreclosure lawsuit was brought by Citi Mortgage against Vatash. Vatash submitted an answer with affirmative defenses to the summons and complaint served by Citi Mortgage. Citi Mortgage moved for summary judgment. In their application they sought to dismiss the answer brought by Vatash. Vatash claimed, in his answer, Citibank lacked standing to bring this foreclosure action. He also claimed Citibank’s motion was inappropriate because he was involved in discussions with Citi Mortgage concerning a loan modification. He took the position since loan modification discussions were ongoing, Citibank had no right to move forward with the foreclosure case.

Standing Argument Dismissed

Justice Thomas Whelan sitting in a Supreme Court Part in Suffolk County, ruled Vatash’s argument that Citi Mortgage didn’t have standing was procedurally defective. The ruling was based on the allegation that Vatash failed to assert lack of standing in his answer or in a pre-answer motion to dismiss. In addition, the court took the position the argument even if it had been submitted appropriately in the answer, was substantively without merit. The court held Citi Mortgage was the owner and holder of the note and mortgage upon its merger with the original financial institution which made the loan.

The court ruled in favor of Citi Mortgage’s application for summary judgment (an application to grant a judgment without the need for a trial because there are no issues of fact). The court took the position the opposition papers submitted by Vatash did not create an issue of fact or an adequate defense.

Negotiations Do Not Stop Foreclosure Cases from Moving Forward

The Court specifically held the fact that Vatash was engaged in negotiations and/or discussions with Citi Mortgage is not a defense to the foreclosure lawsuit. Citi Mortgage’s motion for summary judgment was granted.

Conclusion

There are a number of important issues which were dealt with in this case. To start with, a lack of standing argument must be plead in the answer to the Summons and Complaint. Secondly, discussions with a bank concerning mortgage modifications or other ways of resolving the case have no impact on the foreclosure lawsuit moving forward.

Elliot Schlissel is a foreclosure defense lawyer. His office has represented homeowners for more than 45 years on mortgage foreclosure lawsuits throughout the Metropolitan New York area.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, mortgage modification, Mortgage Modification new york attorney, New York foreclosure attorney

Mortgage Lender Penalized for Failure to Comply with Notice Requirements

January 11, 2014 by Elliot S. Schlissel

Judge Dolinger sitting in the Supreme Court in Rochester recently ruled a mortgage lender who did not comply with the “consumer friendly notice requirements under New York State law should be given a second chance to comply with the statute.” However, the lender was permanently enjoined from imposing any interest, fees, costs or legal expenses on the borrower from 90 days before the filing of the complaint until the bank complies with the New York notice requirements.

Foreclosure Prevention Tenant Protection and Property Management Act

The Foreclosure Prevention Tenant Protection and Property Management Act of 2009, requires a lender give the homeowner notice prior to the house being foreclosed on. In the case before Judge Dolinger, Citi Mortgage failed to comply with this statute. Judge Dolinger was concerned if the case was dismissed, Citibank would get a second chance to comply with the statute’s notice requirements. However, the judge noted in his decision the bank’s failure to comply with the notice requirements in their first attempt. If they were successful in the second attempt the borrower would be worse off because they would be responsible for the entire amount of the unpaid debt including the portion of the interest penalties and attorneys fees which accrued on the debt during the period of time between Citi Mortgage’s first chance at complying with the statute and their second chance. Judge Dolinger wrote in his decision, “the borrower is worse off because the amount of the debt has been increased during the two year period in which the foreclosure action has been pending making a recasting of the mortgage more costly, if not prohibitively so.” To deal with this, Judge Dolinger entered an order permanently enjoining the bank from imposing any interest, fees or legal expenses on the borrower from 90 before the filing of the complaint until such time as they complied with the statute.

Notice Regarding Foreclosure Lawsuit

New York Real Property Actions Proceedings Law (RPAPL) § 1304 requires a creditor to notify a borrower by registered or certified mail as well as by first class mail, offering assistance on how to avoid foreclosure. Citi Mortgage had failed to comply with this section of the Real Property Actions Proceedings Law. In the case before Judge Dolinger, he stated “there was no sworn statement from any bank official regarding the mailing.” Judge Dolinger, based on the bank’s failure to provide the sworn statement regarding the mailing, could have dismissed the foreclosure lawsuit. He refused to do so because he stated he “will not allow the bank to escape the consequences of its failure to follow” the law. Judge Dolinger went on to state “when and if the bank complies” with this statute it can collect “any principal payments due at any time under the note and mortgage.” Judge Dolinger’s ruling, however, denied the bank the ability to collect interest, fees, costs and attorneys fees during the period of time the bank was in non-compliance with the statute.

Conclusion

This was a victory for the mortgagors, albeit a small victory.

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

Foreclosure Court Conference Denied

January 9, 2014 by Elliot S. Schlissel

In a case of first impression, Justice Cohen sitting in the Appellate Division, Second Department (an appeals court) recently wrote a decision that stated a residential foreclosure lawsuit which was caused by a default on a commercial loan is not entitled to participate in the mandatory settlement court conference program. Justice Cohen stated in his decision “while it is unfortunate that here a primary residence may be lost in foreclosure not everyone under every circumstance is entitled to reap the protections afforded to victims of the mortgage crisis by the New York State Legislature.”

History of the Case

Roz Valt Corp. took out a loan from Independence Bank in December 2006. It borrowed $230,000. The purpose of the loan was to provide funds to enable the corporation to acquire various types of equipment, to pay construction costs and to be utilized as funds to set up a “Quiznos” submarine shop in Brooklyn.

The president of Roz Valt Corporation was Roslyn Valentine. She was personally liable for the payment of the loan. In addition, she executed a collateral mortgage to Independence Bank for $230,000. This was a second mortgage on her home in Queens County. Unfortunately, Roz didn’t make the payments under the loan. Independence Bank brought a foreclosure action on the second mortgage on her home. In her pleadings, Ms. Valentine argued she was entitled to the mandatory settlement court conference pursuant to New York Civil Practice and Law Rule Section 3408.

Court of Appeals Ruling

The New York Court of Appeals ruled New York Civil Practice Law and Rule Section 3408 applies to settlement conferences for “any residential foreclosure action involving a home loan.” Judge Cohen agreed with Ms. Valentine’s argument that the settlement court conferences were designed to help homeowners avoid their homes being taken from them in foreclosure. However, he also found, in this case, she was not entitled to a foreclosure settlement court conference. He took this position because this case involved a commercial loan. The loan was made to Roz Valt Corporation which was not a natural person. The money loaned was not utilized for housing purposes. He also found Ms. Valentine was a guarantor of the loan not the borrower.

Conclusion

Unfortunately, Judge Cohen’s decision may cause Ms. Valentine to lose her home.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure settlement conference, New York foreclosure attorney, residential foreclosure

Foreclosure Dismissed – Citibank Has No Standing

January 3, 2014 by Elliot S. Schlissel

In a case before Justice Lizbeth Gonzalez, in the Supreme Court of Bronx County, the judge dismissed a foreclosure lawsuit brought by Citibank.

Citibank had filed a foreclosure proceeding against a homeowner named McCray. They had taken this action on behalf of a Bears Stearns Alt-A Trust. McCray brought a motion requesting the foreclosure lawsuit be dismissed. He argued Citibank had lacked standing to bring the lawsuit. Citibank claimed it had standing to bring the lawsuit because it was the holder of the original note.

Holder or Assignee of the Note and Mortgage

Judge Gonzalez in her decision stated a foreclosing party in a foreclosure lawsuit has standing when they are both the holder or assignee of the mortgage and underlying note at the time the action is commenced.

Citibank’s attorneys had argued they were the holder of the note. However, their legal submissions did not state they also were the holder of the mortgage.

Motion to Dismiss Case Granted

Judge Gonzalez found that there was no proof submitted by Citibank they were the holder of both the mortgage and the note at the time of the initiation of the lawsuit. The court therefore granted McCray’s motion to dismiss. Judge Gonzalez found that Citibank did not submit adequate proof it had the right to the debt in the absence of documentation of chain of custody and proof the mortgage and notes were lawfully assigned and held by it prior to commencing the lawsuit. Since Citibank did not establish and meet the requirements they had standing to bring the foreclosure lawsuit, Judge Gonzalez held that they did not have standing to foreclose and their foreclosure lawsuit was dismissed.

Conclusion

Before a financial institution can bring a foreclosure lawsuit they must be able to prove that they are the holder of both the note and mortgage. In addition, they must show that the mortgage has been rightfully assigned to them and the assignment was properly filed. The documentation of the assignment, the possession of both the note and the mortgage, should be attached to the summons and complaint in the foreclosure legal action. If the financial institution does not do this, the court should dismiss the case for lack of standing.

Elliot S. Schlissel is a foreclosure defense attorney. His office has helped homeowners in scores of cases fight foreclosures and remain in their homes.

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

Home Loans Will Be Harder to Obtain in 2014! – Part II

December 5, 2013 by Elliot S. Schlissel

Fewer Foreclosures in the Future

The creation of the Consumer Financial Protection Bureau (CFPB) may make it more difficult for financial institutions to foreclose on homes owned by homeowners who have stopped making mortgage payments. “For every foreclosure, lenders will have to show the CFPB that there was absolutely no way they could do anything else” according to Gaffney. This will require financial institutions to offer homeowners behind in their mortgage, additional options other than foreclosure. Those options may involve short sales, refinancing, cash for keys arrangements (these are arrangements where lenders pay delinquent homeowners to hand over the keys to their residence and walk away from their homes) and other potential options. Due to the necessity of offering these alternatives, lenders may become concerned that taking back homes from delinquent homeowners will be more difficult. This may result in more conservative underwriting requirements by lenders which will end up shutting more prospective homeowners out of the marketplace to obtain mortgages.

Ability to Pay Rules

Under the new rules going into effect in 2014, financial institutions will have less latitude in evaluating prospective homeowners regarding mortgages. The lender will have to take into consideration the “ability to pay” of the prospective borrower. The following are a list of the new rules lenders will have to take into consideration in underwriting new mortgages in 2014:

Current or reasonably expected income or assets;
Credit history;
Monthly mortgage payments;
Current employment status;
Current debt obligations, (alimony, child support, credit card bills);
Monthly payments on other loans;
Monthly payments on mortgage related obligations; and,
Monthly debt to income ratio or residue income.

Debt to Income Ratio

The debt to income ratio under the new rules will create problems for many families who seek to obtain mortgages. Under the new rules going into effect on January 1, 2014, the monthly debt to income ratio will be set at a maximum of 43%. This means homeowners will not be able to utilize more than 43% of their income to pay all of their financial debts. These debts will include car loans, credit cards, personal loans, and other financial obligations over and above the prospective mortgage they seek to obtain.

Conclusion

Applying for a mortgage in 2014 is going to be more difficult. If you are interested in obtaining a mortgage, apply now!

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, defective mortgages, financial crisis, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, mortgage modification, Mortgage Modifications attorney, New York foreclosure attorney

Hidden Expenses When Buying A Home – Part I

Deficiency Judgments After Foreclosure

Can’t Read or Write English? Not An Excuse in a Foreclosure Proceeding

Foreclosures and the Rental Market on Homes

New York’s New Mortgage Proposal

Negotiations with Bank Does Not Stop Foreclosure Lawsuit

Mortgage Lender Penalized for Failure to Comply with Notice Requirements

Foreclosure Court Conference Denied

Foreclosure Dismissed – Citibank Has No Standing

Home Loans Will Be Harder to Obtain in 2014! – Part II

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