foreclosure defense attorneys

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

December 3, 2013 by Elliot S. Schlissel

Starting on January 1, 2014, it will be more difficult for prospective homeowners in the United States to obtain mortgage loans. This is as a result of the passage of the Dodd-Frank Act. This statute was passed by Congress when the housing market melted down a number of years ago. After the housing meltdown, the federal government funded a bailout of large financial institutions. The Dodd-Frank Act is an attempt to regulate the lending industry. It is designed to protect consumer/taxpayers. In addition to the Dodd-Frank Act there is a Consumer Protection Act of 2010 which also goes into effect January 1, 2014.

“Under the new rules if [banks] want to lend correctly, by the book, they are going to [have to] leave out a lot of borrowers who would otherwise qualify for a mortgage” according to Jacob Gaffney, the Executive Editor of HousingWire.com, and HW magazine. It is estimated close to 50% of the borrowers who could obtain a mortgage in 2013, may not qualify in 2014. What do you do if you are thinking about getting a mortgage? It is suggested you obtain it in 2013.

The Consumer Financial Protection Bureau

Under the Dodd-Frank Act the Consumer Financial Protection Bureau (“CFPB”) is created. The Bureau became operational in July of 2011. The purpose of the CFPB is to prevent consumers from taking out mortgages which were beyond their ability to repay. This federal agency acts as a watchdog to see to it banks don’t start making loans to consumers they can’t afford.

According to Jacob Gaffney, the Consumer Financial Protection Bureau is a mistake. He recently stated “any company out there, especially the larger banks that have business operations outside of mortgages, are going to dwindle their mortgage operations because [the mortgage operations are] just too risky.” He further stated if there are fewer large lenders he anticipates there will be fewer mortgages offered.

Elliot S. Schlissel is a foreclosure attorney with more than 45 years of experience helping homeowners to keep their homes by fighting foreclosure lawsuits. He also helps clients obtain mortgage modifications and seeks out other alternatives to foreclosure.

Mortgage Terms – Part I

November 25, 2013 by Elliot S. Schlissel

Most homeowners in the State of New York hire an attorney to represent them when buying or selling a house. The attorney handles the paperwork, deals with the bank lawyer, and the other parties’ attorney. Unfortunately when homeowners fall behind on their mortgage payments, the banks bring foreclosure lawsuits against them. Homeowners will sometimes research their rights on the internet to determine whether they have viable defenses to their foreclosure proceedings. When reviewing the terms of either a summons and complaint in foreclosure or with regard to the financing of a home through a financial institution, at the time of purchase, it is important to know actually what the specific terms utilized by financial institutions mean.

The Note

The loan document or note refers to a promissory note given by the borrower to the lender. The promissory note creates a contract wherein the borrower agrees to pay a certain amount of money to the financial institution pursuant to specific terms. With regard to notes involved in real estate transactions, the length of the repayment obligation is usually 15 or 30 years. The interest rate on the financial obligation determines how much the borrower will have to pay the financial institution each month. In addition to repaying the interest and principal on the loan, taxes and insurance on the residence are usually added to the monthly payment costs.

A simplified way to look at the promissory note is that it is basically an “IOU”. The note actually does not specifically relate to the property involved. It exists on its own as a financial obligation between the borrower and the financial institution. If the borrower does not make timely payments pursuant to the terms of the promissory note the lender can sue the borrower on the note for breach of contract.

The Mortgage

Let’s start with what a mortgage is not. A mortgage is not a “promise” to pay the loan on the property. The mortgage is not any type of promise. The mortgage is attached to the property by the debt created by the note. The mortgage contains language similar to a deed that gives the lender the right to take the property back if the borrower does not make the timely payments pursuant to the promissory note. In effect the mortgage attaches the note to the property and gives the lender a remedy to sell the property in the event the terms of the promissory note are not adhered to by the borrower.

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

Issue of Standing in Foreclosure Lawsuit is Waived By Failure to Plead It In The Defendant’s Answer

November 22, 2013 by Elliot S. Schlissel

Columbia Capital had loaned Mr. Cuervo $130,000. They had received a mortgage against real estate owned by Mr. Cuervo as security for this loan. Mr. Cuervo had executed a note and a mortgage to Columbia Capital at the time of the closing on the purchase of the property.

Summary Judgment Motion

Columbia had made an application for summary judgment. Their application was based on their cause of action for foreclosure. (A summary judgment motion sought to have the court render a decision there was no question of fact that the plaintiff, in this case, was entitled to a judgment based on their allegations and no trial was necessary). In their summary judgment application Columbia asked the court to strike all of the affirmative defenses made by the defendant.

Columbia Claims Mortgage is in Arrears

Columbia claimed that Mr. Cuervo did not make his mortgage payments pursuant to the note and mortgage and that they were entitled to summary judgment because there were no issues of fact in the case. The opposition papers submitted by Mr. Cuervo’s attorney alleged Columbia did not have standing to bring this lawsuit. (Lack of standing means Columbia was not the appropriate party to move forward with this foreclosure lawsuit).

Justice Peter Mayer sitting in the Supreme Court in Suffolk County held the opposition submitted by Cuervo’s attorney did not raise any questions of fact. It did not rebut Columbia’s prima facie showing of entitlement to summary judgment. Judge Mayer went on to state the failure to raise as an affirmative defense the issue of standing by Mr. Cuervo’s attorney acted as a waiver concerning this potential defense to the lawsuit. In other words, since Cuervo didn’t plead a lack of standing, the Court would not hear arguments as to whether there actually was a lack of standing for Columbia to bring this foreclosure proceeding.

Columbia’s application for summary judgment was granted by Judge Mayer.

Conclusion

Defense counsel should allege a lack of standing in all foreclosure lawsuits. At the time the answer is submitted by the defendant, the defendant is usually not in a position to know whether the plaintiff has standing. These issues are clarified during the discovery process of the lawsuit.

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

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

November 20, 2013 by Elliot S. Schlissel

The 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.

Elliot Schlissel, Esq. is a foreclosure attorney representing homeowners concerning mortgage modifications and foreclosure litigation.

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

US Bank and Wells Fargo Violate Duty to Negotiate in Good Faith at Mandatory Foreclosure Settlement Conference

November 19, 2013 by Elliot S. Schlissel

Justice Robert Torres, sitting in Supreme Court in Bronx County, recently ruled US Bank and Wells Fargo were barred from collecting any interest, unpaid late fees or attorney’s fees until a homeowner was given an appropriate review and determination of his mortgage modification application. A foreclosure action was brought against a homeowner named Rodriguez in Bronx County.

Rodriguez brought an application to find that US Bank and the loan servicer on this mortgage, Wells Fargo Bank, had violated their duties and obligations under the HAMP guidelines to negotiate in good faith at a foreclosure settlement conference. Rodriguez took the position Wells Fargo mishandled and misapplied the HAMP guideline with regard to his application for a mortgage modification. He further argued both US Bank and the loan servicer, Wells Fargo, had failed to act in good faith as required by financial institutions under the HAMP program.

Court Rules Against the Banks

Justice Torres found that Rodriguez had provided sufficient documentation to his allegations concerning the violation of the good faith requirement by the financial institutions at the settlement conference. His decision stated in this foreclosure proceeding, the financial institutions did not follow HAMP guidelines such as violating section 3408(f) regarding the duty to proceed in good faith. The Court took into consideration the presentation by Rodriguez’s representative that Wells Fargo did not explain why they refused to evaluate him under Tier 1 and Tier 2 programs. Under the HAMP guidelines a loan servicer must evaluate the homeowner pursuant to these guidelines. Judge Torres’ ruling stated Wells Fargo had not complied with the current HAMP directive and failed to work towards a loan modification in good faith.

Conclusion

Financial institutions must cooperate and work with homeowners and evaluate mortgage modification applications pursuant to the HAMP guidelines.

Elliot S. Schlissel is a foreclosure attorney representing homeowners in foreclosure lawsuits. His office seeks to keep their clients in their homes by helping them obtain mortgage modifications and by challenging the foreclosure lawsuits brought by financial institutions, and countersuing them for violating federal and state laws.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: Bankruptcy mortgage modification, defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, mortgage modification attorneys

The Foreclosure Process in New York

November 18, 2013 by Elliot S. Schlissel

The foreclosure process in New York is much more complicated than most homeowners understand it to be. It is a process that involves a number of steps to complete. The purpose of this article is to inform homeowners about the foreclosure process and the options homeowners have to stop foreclosures from moving forward.

Time Frames for Foreclosure

The foreclosure process in New York can be discussed with regard to two types of time frames. If the homeowner ignores the Summons and Complaint, takes no legal action and does not hire an attorney to defend them, the process can take approximately 18 months and depending on how aggressive the financial institution is, even longer. However, if the homeowner hires an attorney, files a formal Answer, contests the proceedings, engages in the discovery process and opposes a summary judgment motion, the foreclosure process can be extended to 3 years or more.

Missing Mortgage Payments

In the event you are unable to make your mortgage payments on a timely basis, the best means of dealing with the situation is to notify your financial institution. Many of the lenders in New York are willing to work out payment plans during financial hardship situations for homeowners. You can apply for a mortgage modification or a forbearance agreement. In the event you realize you will not be able to make your mortgage payments over the long run, it is necessary to hire a foreclosure attorney to represent you in the foreclosure proceeding that will be forthcoming.

Banks do not, in New York State, take action to initiate foreclosure proceedings until the homeowner is a minimum of 3 months behind in their mortgage payments. Some banks will wait as long as 6 to 9 months before they will consider taking legal action. If there are problems with the paperwork, issues involving assignments, robo-signers, violations of truth in lending or New York State laws, the banks may wait years before they initiate a foreclosure proceeding.

Pre-Foreclosure Notice

In New York State a lender must notify the homeowner in writing 90 days before beginning legal proceedings. This pre-foreclosure notice advises the homeowner the bank is accelerating the mortgage. This means the bank is calling the entire amount of the mortgage due and owing. Once the mortgage is accelerated, if the homeowner makes a mortgage payment, the banks will usually reject the payment and demand the entire mortgage be paid in a lump sum.

Foreclosure Legal Proceeding

The foreclosure process is started by the attorney for the financial institution drafting a summons and complaint, filing the summons and complaint, and hiring a process server to serve the summons and complaint on you. If the summons and complaint is served on you personally, you have 20 days to hire an attorney and submit a formal written answer. If it is served on you in any other manner other than through personal delivery, you have 30 days to respond by submitting a written Answer to the summons and complaint.

Mortgage Modification

Some homeowners have the mistaken idea that submitting a mortgage modification application acts as a response to the summons and complaint. This is not true. If served with a summons and complaint in a foreclosure, you need to submit a written answer admitting or denying the allegations in the complaint alleging affirmative defenses and possibly countersuing the bank.

End of Foreclosure Proceeding

A foreclosure proceeding ends by the sale of the home by a referee in an auction type sale. Don’t wait for this to happen. Hire a competent foreclosure defense lawyer to represent you if you want to stay in your home!

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

Losing Your Home

November 15, 2013 by Elliot S. Schlissel

When you have financial problems it can turn your life upside down. Financial problems cause anxiety and stress. One of the worst and most problematic financial problems is when you cannot make your mortgage payments. Failing to make mortgage payments over a period of 3 months or more can result in the financial institution that holds the mortgage on your home bringing a foreclosure lawsuit. Foreclosure is the bringing of a lawsuit for purposes of the financial institution reclaiming the ownership of the home. In the end, if the financial institution is successful in the foreclosure proceeding, they can evict the homeowners from their home.

Under Water Homes

Many homeowners bought their homes in the years 2002 through 2008 when home prices were rising. Many of the homes facing foreclosure today are worth less than the amount of money due and owing on the mortgages.

Fighting Foreclosure Lawsuits

A foreclosure lawsuit is initiated by the attorneys for the bank filing, in the County Clerk’s office in the County where the home is located, a Summons and Complaint in Foreclosure. Simultaneously with filing the Summons and Complaint in the County Clerk’s Office, the financial institution also files a Lis Penden which notifies anyone who conducts a title search the house is now involved in a foreclosure lawsuit. After the summons and complaint is filed with the county clerk’s office, the attorney for the financial institution hires a process server who serves the summons and complaint on the homeowners. The summons and complaint can be served personally on the homeowners, by nailing it to the door and mailing it to them, and/or by serving a person of suitable age and discretion at the homeowners residence or principal place of business. So, what do you do if you are served with a summons and complaint?

Foreclosure Defense Lawyers

There are attorneys who have extensive experience in litigating foreclosure lawsuits. Foreclosure lawyers can explain the process to you. They can investigate and see whether the financial institution that is suing you actually has the right to sue you. They can look into whether Truth in Lending Laws were complied with. They can investigate as to whether New York Laws concerning the assignment of mortgages and the execution of affidavits related to the foreclosure lawsuit have been properly undertaken. Homeowners are consumers and there are consumer protection laws in the State of New York and Federal Laws that protect homeowners from unfair practices by financial institutions.

Mortgage Modification

Many homeowners apply for mortgage modifications get rejected and assume that there is nothing that can be done. That is not correct. The first stage of a foreclosure lawsuit is the attendance by the financial institution and the attorney for the homeowner at a foreclosure court conference. At this time, pressure can be brought on the financial institution of cooperate and to act in good with regard to the underwriting of a mortgage modification application. Even if the homeowner has been turned down in the past, the homeowner can file a new mortgage modification at no cost as part of this process.

Procedural Defenses

There are a number of procedural defenses that can be raised in a foreclosure lawsuit by a sophisticated foreclosure defense lawyer. The writer understands that the homeowner actually received the money and purchased the house. This does not prevent the homeowners from protecting their legal rights under Federal and State consumer protection laws with regard to unfair banking procedures, fraudulent foreclosure practices and being defrauded regarding misleading documents.

Conclusion

Don’t despair. If your home goes into foreclosure, hire the right lawyer and you may be able to stay in your home longterm!

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

New York’s Backlog of Foreclosure Cases

November 7, 2013 by Elliot S. Schlissel

The foreclosure process in New York, even under optimum circumstances, can take as long as three years. New York has enacted legislation regarding the robo-signing scandal that was uncovered in 2010. There are new court imposed rules affecting attorneys representing banks that seek to bring foreclosure lawsuits.

New Foreclosure Requirements

The attorneys for financial institutions must prepare an affidavit or swear under penalties of perjury that the foreclosure documents being submitted are accurate. Consternation by lender’s attorneys with regard to the accuracy of notes, mortgages and assignments of mortgages have caused delays as long as two years in the New York foreclosure process.

Lenders themselves must verify, when a foreclosure action is initiated, that the lender has the right to sue. This deals with the issue of standing. Notes and mortgages are sold as commercial paper. If the sale is not accompanied by an appropriate assignment from one bank to another, the second bank has no right to bring a foreclosure lawsuit.

The delays in foreclosure proceedings can cause interest and penalties to accrue against the homeowner.

Foreclosure Settlement Conferences

When a foreclosure lawsuit is initiated in the State of New York, the homeowner is entitled to attend a foreclosure settlement conference. At these conferences, judges and their staff seek to mediate foreclosure issues and assist homeowners in obtaining mortgage modifications. Unfortunately, the reality is many of the homeowners whose homes have gone into foreclosure could not afford, when they bought the homes, to pay the mortgages and due to the economic crisis facing America have even less capability today of paying their mortgages.

Elliot S. Schlissel, Esq. is a foreclosure defense lawyer representing homeowners throughout the metropolitan New York area who seek to fight foreclosure lawsuits.

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

What Do You Need to Know Before Buying a Home?

November 2, 2013 by Elliot S. Schlissel

When buying a home, prospective purchasers need to look at all of the factors involving the home. They should not be overly focused on the most attractive details of their prospective purchase. Sometimes prospective purchasers fall in love with the kitchen or the bathrooms. While an attractive kitchen and modernized bathrooms are important, there are other factors to be taken into consideration when purchasing a home.

The Home’s Condition

Before purchasing a home, every prospective purchaser should hire an engineer for the purpose of looking into the heating system, plumbing system, electrical system, checking that the roof doesn’t leak, and looking into the structural integrity of the house. The engineer should be especially careful to look into whether the house has drainage issues and/or whether it floods in heavy rainstorms.

Location, Location, Location

Before purchasing a house you should drive around the house’s neighborhood. You should look into how far the house is from schools, public transportation, and stores. Purchasing a house in an area that has an excellent school district adds value to the house and will help your children advance in their lives and careers.

Taxes

The amount you will be paying each year for school taxes and real estate taxes should be a significant factor in making a decision as to whether this is the right home for you. Unfortunately, taxes usually go up. You should take into consideration how much the taxes in this area have risen in the last few years and plan to pay higher taxes in the future on the home.

Nuisances

Are there businesses, factories or other circumstances nearby the prospective home that will cause either a noise, pollution or general type of nuisance for you?

Home’s History

Some people are very superstitious about buying a home where individuals died or were murdered in. If this is an issue for you, you should look into the history of who owned the home and what happened to those former homeowners.

Meeting Your Needs

Lastly and most importantly, the home must meet your needs. Are there enough bedrooms? Will there be enough space in the home? Above all, can you really afford this home?

Elliot S. Schlissel, Esq., for more than 45 years has been representing homeowners with regard to the purchase and sale of single family homes. In addition, Elliot and his aggressive associates fight foreclosure lawsuits, help their clients obtain mortgage modifications, and are well known foreclosure lawyers.

Filed Under: Foreclosure Tagged With: foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, mortgage modification attorneys, real estate, real estate attorneys

Appearance at a Foreclosure Settlement Conference Considered an “Informal Appearance” and not a Default by the Mortgagor

October 7, 2013 by Elliot S. Schlissel

In a case of first impression, Justice Jack Battaglia sitting in Supreme Court Real Property Part in Kings County, New York, dealt with an issue as to whether the appearance by the mortgagor at the mandated Foreclosure Court Conference part in Kings County without submitting a formal written answer to the summons and complaint can be considered an informal appearance denying the financial institution the ability to claim the homeowner was in default.

In this case, the financial institution brought a summary judgment application to the Court. A summary judgment motion claims there are no issues of fact and therefore no trial is necessary. The basis for the summary judgment was the default by the mortgagor, Butler, in this proceeding. There were two prior applications by the financial institution but questions concerning the affidavit of service caused them to be denied. The Judge had the case sent over to the Foreclosure Settlement Conference Part for mandatory foreclosure settlement proceedings.

Mr. Butler made numerous appearances at the Foreclosure Conference Part. The judge questioned whether since Butler appeared in the action in the Foreclosure Conference Part, how could she be “in default” for purposes of entering a judgment on default. The Court took the position, under New York case law, what Butler made was called an “informal appearance” within the time specified in the Summons and Complaint.
This is covered by New York Civil Practice and Rules § 320(a). The judge therefore entered a decision that Butler was not in default. A motion to enter judgement based on default could not be granted since Butler was not in default. Butler had participated in court conferences pursuant to this informal appearance. It should be noted, Butler appeared twenty-five times in the Foreclosure Conference Settlement Part and several other times before the court. The financial institution’s application for a default judgment was denied.

Elliot S. Schlissel is a foreclosure defense attorney representing homeowners throughout the metropolitan New York area. Elliot and his staff of attorneys have been keeping homeowners in their homes for more than 45 years.

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

Mortgage Terms – Part I

Issue of Standing in Foreclosure Lawsuit is Waived By Failure to Plead It In The Defendant’s Answer

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

US Bank and Wells Fargo Violate Duty to Negotiate in Good Faith at Mandatory Foreclosure Settlement Conference

The Foreclosure Process in New York

Losing Your Home

New York’s Backlog of Foreclosure Cases

What Do You Need to Know Before Buying a Home?

Appearance at a Foreclosure Settlement Conference Considered an “Informal Appearance” and not a Default by the Mortgagor

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