Court Enforces Mortgage Modification Agreement

foreclosure assistance for long island homeownersIn the case of Brown v. Nationstar Mortgage reported in the New York Law Journal on June 26, 2015, Brown had brought a lawsuit seeking to enjoin the enforcement of a judgment of foreclosure which resulted in the sale of his home. In addition, he sought to stop a proceeding which attempted to remove him from his home after the foreclosure sale had taken place. His lawsuit requested the court rescind the sale of his property and find a mortgage modification agreement he had previously entered into with Nationstar Bank was effective and enforceable.

The court found the only issue which needed to be dealt with, because all of the other relief requested by Brown had previously been litigated, was whether the mortgage modification agreement should be enforceable.

Justice Daniel Barrett found Brown had reasonable notice of the foreclosure proceedings. He stated, however, he was “perplexed by the inactivity concerning this matter.” Mr. Brown had testified he had received a letter from the respondent offering him a mortgage modification. The letter required he sign a mortgage modification agreement and agree to make a payment for the agreement to become effective. He testified that he complied with all of the requirements the bank had requested. In spite of entering into a valid mortgage modification agreement with the bank, a foreclosure sale was conducted and Nationstar Mortgage bought the property. They thereafter served Brown with a 90 day notice to remove himself from the premises.

Mortgage Modification Agreement is Valid and Mortgage Set Aside

Justice Barrett ruled there was a valid mortgage modification agreement because Brown had complied with all of the required terms of the agreement. He then sought to place the parties in the position they would occupy if the agreement was performed pursuant to all of its terms. The judge therefore directed both parties continue to perform under the terms of the agreement and, in addition, there be a two year interest free period.

Conclusion

The entering into of a mortgage modification agreement does not stop lawsuits from moving forward. Banks usually hold the lawsuits in abeyance to see if the terms of the mortgage modification agreement are complied with. However, sometimes the outside counsel representing banks in foreclosure lawsuits have no idea the banks are entering into a mortgage modification agreement. They therefore continue with the foreclosure process which can result in the sale of the home and eviction of the family that lives in the home. To make sure the attorneys representing the bank in the foreclosure proceedings are aware of what is going on between the bank and the homeowner, it is important to provide documentation to the attorneys for the bank with regard to the existence of the mortgage modification being underwritten and being accepted.New York foreclosure defense lawyer

Foreclosure Lawsuit Blocked Concerning Death Issues

foreclosure attorney in New YorkA foreclosure action was brought by JP Morgan Chase in the Supreme Court of New York County. Justice Francois Rivera was the judge assigned to the case. Chase claimed in their pleadings that Charles had executed a mortgage and note on real property in favor of Fleet Real Estate Funding. They claimed Fleet Real Estate Funding had assigned the mortgage to JP Morgan Chase. They claimed Charles defaulted on making his payments on the note and mortgage, they had accelerated the note and mortgage and served the acceleration notice on Charles.

Charles’ Death

After Chase had commenced this lawsuit they ascertained that Charles had died. It should be noted Charles did not respond to any of the documents served upon him by Chase or the Summons and Complaint. That may have been related to the fact that he wasn’t alive!

Although Chase was aware that Charles had died, the moving papers submitted by them did not contain an original death certificate. The court was never made aware as to when Charles died. Judge Rivera advised Chase that when an individual to a lawsuit dies, the court is divested of jurisdiction to continue legal proceedings until an appropriate substitution is made. In addition, any court order rendered after the date of death of a party and before a legal representative is appointed to represent the deceased party would also be void.

Judge Rivera reached the conclusion since Chase had not submitted a death certificate, and they weren’t aware of the date of death, they could not determine if Charles was ever legally a party to this lawsuit. The court further stated if Charles died after the lawsuit was initiated, the action would be stayed under New York State law. In the end, Judge Rivera found that Chase could not have any relief at all until they resolved the issues concerning Charles’ death.

Conclusion

Dying is a defense to a foreclosure lawsuit! However, there are less painful defenses which can be established by hiring a foreclosure lawyer upon the initiation of legal proceedings against you.New York foreclosure defense lawyer

Truth in Lending Disclosures

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

https://youtu.be/iUS_okDSEU0

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

Court Denies Bank Default Judgement and Appointment of Referee

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

Non-Party to the Lawsuit Opposes Foreclosure

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

Court Denies The Bank’s Motion

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

Conclusion

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

Defense to Foreclosure Lawsuit: The Mortgage Company Made a Mistake – Part I

foreclosure defense attorney for homeownersBanks and their servicing companies make mistakes. Homeowners, at one time, blindly believed whatever a bank did and whatever documents they submitted were always correct. Since the mortgage crisis started in 2008, there have been dozens of publications of inappropriate actions, mistakes, issues involving robo-signing and bad practices by financial institutions. As a result of these disclosures, attorney generals in all 50 states as well as the United States Attorney General have brought lawsuits which have resulted in banks all over the country paying hundreds of billions of dollars in fines and penalties.

Katherine M. Porter, a law professor, conducted a study based on the filings of 1,300 Chapter 13 bankruptcy cases. Her study revealed, in a majority of these bankruptcies, documents submitted by the holders of the mortgage contained errors (Misbehavior and Mistake in Bankruptcy Mortgage Claims, Texas Law Review, 2008.)

What Type Of Mistakes To Look For

Mortgage servicing companies cannot always be counted on to give you credit for all of your mortgage payments. They may charge excessive fees in violation of state laws. They may fail to advise you that you can redeem your property by becoming current on your mortgage payments. In the event you seek to reinstate your mortgage, and you receive a statement from the mortgage servicing company with regard to what they claim is necessary to be paid to reinstate your mortgage, that reinstatement must have an accurate itemization of what they claim is due them. An example of a mortgage servicer mistake would be charging you for a reappraisal or home inspection on your home when the mortgage documents don’t make it an obligation of yours to pay these fees. The following are examples of common mortgage servicer mistakes:

  • the bank engaged in coercive improper collection practices concerning their mortgage
  • your mortgage payments get applied to someone else’s account
  • the bank receives your mortgage payment but doesn’t give you credit for it
  • the bank buys insurance on your property and charges you for it in spite of the fact you already had insurance on your property
  • the bank fails to pay your property taxes in a timely manner and a penalty is assessed or the bank fails to pay your property taxes altogether even though they have received the money in escrow for your property taxes
  • the bank charges you late fees and property expense fees even though your mortgage payments were made on a timely basisNew York foreclosure defense attorney

The Lack of Standing Defense in Foreclosure Lawsuits – Part II

loan modification lawyerPresenting the Lack of Standing Issue to the Court

To start with, the lack of standing must be plead as an affirmative defense in the homeowners’ Answer. The homeowner can thereafter during the discovery portion of the case demand documentation from the financial institution of the chain of assignments which led them to bring this lawsuit. If the bank cannot produce documentation of this chain of assignments the homeowner can make a motion to dismiss under New York Civil Practice Law and Rules section 3211. The homeowner, in their moving papers to dismiss the lawsuit, must make the argument the financial institution bringing the lawsuit is not a valid holder of the note and mortgage and/or there is an issue concerning one or more of the assignments in the chain of assignments.

Lack of Standing Arguments

Many homeowners who come into my office have researched on the internet and through other sources the issue of standing and seek to submit a lack of standing argument to the court. However, the technicalities of bringing a motion to dismiss under section 3211 of the New York Civil Practice Law and Rules and the manner in which the motion needs to be presented to the court generally requires an expertise which is beyond the ability of most homeowners. The best way to assert and/or prove a lack of standing argument for the purpose of getting a foreclosure case dismissed is to hire an experienced foreclosure defense lawyer to make these arguments for you.New York foreclosure defense attorney

The Lack of Standing Defense in Foreclosure Lawsuits – Part I

foreclosure help for homeownersWhen a financial institution brings a foreclosure lawsuit, they have a legal obligation to prove to the court they are the rightful holder of the mortgage and note they are suing on. Mortgages and notes are standardized documents. In most situations a variety of financial institutions and servicing organizations will handle the mortgage and note prior to the initiation of the foreclosure lawsuit. The financial institution who in the end brings the foreclosure lawsuit must show each of the assignments, starting with the financial institution who made the loan, was properly executed and the requisite documents were filed in the County Clerk’s office. Over and above that, the financial institution who brings the foreclosure lawsuit must have in its hands at the time the lawsuit is initiated, the original mortgage and note.

Bank Assignments

Sometimes mortgages have traveled through many different banks and servicers’ hands before a foreclosure lawsuit is brought against the homeowners. The proof of the ownership by the financial institution who brings the lawsuit revolves around the chain of assignments from one previous owner to the next. Sometimes the actual paperwork on the assignments are never completed or are not correctly done. The documentation of the assignments may only exist within the computers of the financial institutions. That is insufficient. The party bringing the foreclosure lawsuit must have the original note and mortgage and be able to show that every step of the way, between the original bank and the bank bringing the foreclosure, involved a proper assignment which was properly filed and executed by the appropriate parties.

Homeowners have been successful in dozens of lawsuits in the Metropolitan New York area in showing the financial institution bringing the foreclosure lawsuit was not a proper party due to a defect in the assignments. This causes the lawsuit to be dismissed! The theory behind the assignments is the party bringing the lawsuit has standing to sue under the terms of a contract (the mortgage and note are contracts). The initiating party in the lawsuit must have a documented ownership interest in the contract. In addition, the party having the ownership interest in the contract must have suffered some damages (the non-payment of the mortgage).New York foreclosure defense attorney

Defense to Foreclosure Lawsuit: The Mortgage Company Made a Mistake

Defense to Foreclosure Lawsuit: The Mortgage Company Made a MistakeViolations of Truth In Lending Law

The Truth in Lending Law (hereinafter referred to as “TILA”) is usually violated by a lender failing to provide the appropriate disclosure to the homeowner at the time of closing. The financial institution must specifically disclose the annual percentage rate of the loan. In addition they must disclose the finance charges, the amount financed, the total payments, the payment schedule and many other items. These disclosures are supposed to be included in the document referred to as the Truth in Lending Disclosure Statement. The lender is responsible for all of the calculations contained in the Truth in Lending Disclosure Statement being accurate.

TILA and HOEPA Violations Apply To All Subsequent Banks
Who Will Receive Assignments From The Original Lender

The actual violations of TILA and the Home Ownership and Protection Law (hereinafter referred to as “HOEPA”) are caused by the original lender not complying with these statutes. Thereafter if the loan is assigned to subsequent financial institutions these lenders are held accountable for the violations of the original bank. The only way subsequent financial institutions can avoid liability under these statutes is if they can show a reasonable person exercising ordinary due diligence would not have been able to determine the violation or improper practice pursuant to TILA or HOEPA.

Rescinding the Loan

The method in which you rescind the loan is to give written notice to the lender you are exercising your right of rescission. If you are successful in your request to rescind the loan, the financial institution must return everything you paid to them except for the payments of the loan principle. In addition, you must return the portion of the loan principle that has not yet been repaid. When you rescind the loan you can eliminate being responsible for the payment of the loan under its terms but you still can’t keep the loan proceeds. The reality is when you rescind the loan you must refinance to repay the portion of the principal you received. However, rescission of a loan will always stop a foreclosure proceeding in its tracks!

It should be noted recently the United States Supreme Court rendered a decision in the matter of Jesinoski v. Countrywide Home Loans that you don’t have to sue within the three year rescission period for rescission. You only have to provide written notice to the lender to preserve all of your rights during that three year period.

Foreclosure Defense Lawyer

If you seek to hire a lawyer to represent you in a foreclosure defense, one of the things he or she should be familiar with are the regulations involving TILA and HOEPA. The lawyer should know how these laws can be asserted by you in a foreclosure proceeding as a defense and how you can obtain damages as a result of violations of these laws. An excellent publication which can provide you with more ideas concerning the fighting of foreclosure lawsuits is Foreclosures published by the National Consumer Law Center.New York foreclosure defense attorney

Unfair Lending Practices

foreclosure defense lawyersThere are a variety of federal and state statutes which can be utilized by homeowners to fight foreclosure lawsuits. These laws were enacted to protect homeowners from illegal or improper practices by financial institutions. There are two federal laws designed to protect homeowners against unfair lending practices. These laws specifically deal with residential mortgages. The first statute is the Truth in Lending Act. This law is sometimes referred to as “TILA”. The second statue designed to protect homeowners is the Home Ownership and Equity Protection Act. This statute is often referred to as “HOEPA”. Both of these federal statutes give a homeowner the ability to sue for monetary damages. In addition, homeowners can also sue for financing costs paid by them. Under some circumstances both of these statutes allow a homeowner to have the mortgage canceled. If the mortgage is canceled, the foreclosure lawsuit will come to an end if the homeowner can make arrangements to refinance the balance of the principle due to the lender.

Rescission of a Loan

Rescission of a loan means canceling the loan. There is a concept under TILA of retroactively canceling or rescinding a loan. The technical term for this is extended rescission. A lender has to give you three days notice under certain circumstances to rescind or cancel a loan. However, your right to rescind or cancel the loan can be extended up to three years if you can show the lender violated portions of TILA. The three year period can be extended even in the event a foreclosure lawsuit has been initiated. This means in a foreclosure lawsuit if you can show a material violation of either TILA or HOEPA you can cancel the loan and by taking this action you can be successful in defending the foreclosure lawsuit. It should be noted the most common types of loans covered by either TILA or HOEPA are refinanced loans and HELOCs.New York foreclosure defense attorney

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