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Bank Fails to Show Standing to Maintain Foreclosure Lawsuit

Bank Fails To Show Standing To Maintain Foreclosure LawsuitIn a case before Justice Robert Muller sitting in Clinton County, Beneficial Finance Service provided a mortgage loan to Carpenter. Carpenter defaulted in making payments to Beneficial Finance Service. Caliber Home Loans, acting under a Power of Attorney for Beneficial Finance Service, started a foreclosure lawsuit against Carpenter. Carpenter claimed defenses to the lawsuit including a lack of standing by Caliber Home Loans.

Summary Judgment Application

The Calibers brought a motion for summary judgment against Carpenter. They sought to have his answer dismissed. Justice Robert Muller noted plaintiff’s papers did not contain a power of attorney. They also did not contain a servicing agreement authorizing Caliber Home Loans to act as attorney in fact and servicer.

The Judge’s Decision

Justice Muller found it was unclear whether the affidavit by Neilson indicating he was familiar with Caliber Home Loans business records also claiming that Caliber was the custodian receiving physical possession of the note and mortgage from Beneficial Finance Service was valid. Justice Muller found it was also unclear whether the plaintiff actually had physical possession of the note. The assignment of the mortgage did not discuss who had possession of the note. It only discussed the transfer of the mortgage.

Justice Muller rendered the decision stating Beneficial Home Servicer and Caliber Home Loans failed to establish standing to bring the foreclosure lawsuit and the summary judgment motion was denied.

Conclusion

Financial institutions must prove they are the appropriate party to bring a foreclosure lawsuit. The defense to the foreclosure lawsuit being brought by an institution that does not have the proper authority is called “lack of standing.”

schlissel-headshotElliot S. Schlissel is a foreclosure attorney who has been fighting foreclosure lawsuits for more than three decades. He can be reached at 800-344-6431 or e-mailed at Elliot@sdnylaw.com.

Foreclosure Action Dismissed: Bank Had No Standing

Foreclosure Action Dismissed: Bank Had No StandingIn a case in Orange County before Justice Maria Vasquez-Doles a plaintiff moved for summary judgment claiming there were no questions of fact and that a trial was not necessary in this foreclosure case. They requested an appointment of a referee to compute the amount which was owed. In addition, they wanted a default judgment against non-appearing defendants. The original note and mortgage was between Home Funds Direct and the homeowners. It was claimed the homeowners defaulted by not making timely mortgage payments. US Bank Trust moved for summary judgment. The defendants argued US Bank Trust did not have standing to bring the lawsuit. They claimed MIRS was never authorized by the original lender to assign the note and mortgage to US Bank Trust. The defendants claimed the note was in the possession of “a custodian Wells Fargo Bank” not US Bank Trust.

The Judge’s Decision

Justice Vasquez-Doles found US Bank Trust had not met its burden of proof to show it had standing to bring the foreclosure lawsuit. She found they failed to establish a prima facie case that US Bank Trust was in possession of the note because Wells Fargo continued to possess the original note. She also found US Bank Trust could establish the standing by showing the note was assigned to them, but they failed to do this. She also pointed out there is no endorsement to MIRS on the note giving it authority to assign the note. The evidence presented in the case was there was no evidence indicating MIRS had a right to assign the note. MIRS also could not transfer something it did not have possession of. Although US Bank Trust could have established physical delivery of the note to them, they did not undertake to do this in this case. Justice Vasquez-Doles therefore dismissed the case.

schlissel-headshotElliot S. Schlissel is a foreclosure lawyer representing homeowners throughout the Metropolitan New York area for more than 35 years. He can be reached at 800-344-6431 or e-mailed at Elliot@sdnylaw.com.

Technical Foreclosure Defenses

Technical-Foreclosure-Defenses

In almost all foreclosure situations the homeowners have applied for a mortgage, they have been approved by the financial institution, they obtained the mortgage, went to closing and purchased their home. Thereafter, the homeowners fell behind on their mortgage. So how can homeowners who borrowed the money and have not made the payments defend a foreclosure lawsuit? Most foreclosure defenses are based on the failure of the financial institution, its attorneys and/or its employees to comply with the many federal, state, local and other regulatory requirements involved in mortgage lending, recording of mortgages, servicing and administrating the mortgages, modifying the mortgages and providing the homeowners with the appropriate statutory notices they are entitled to. Lenders need to comply with many state and local ordinances andrules.

Issues Related to Closings

All financial institutions have disclosure requirements regarding what takes place at real estate closings. They are also laws and rules regarding predatory lending, fraud, unreasonable fees and other issues related to the underwriting of mortgages.

Standing Issues

Financial institutions have to produce the note. They need the original note before they can proceed with the foreclosure. Clear copies of the loan documents should be attached to the complaint. Homeowners should receive 30 days notice under Real Properties Actions and Proceedings Law Section 1304. There may be defective assignments of the mortgage. There may be late assignments of the mortgage. The individuals signing affidavits related to the foreclosure may not have had the appropriate authority to sign those affidavits. Some assignments of the mortgage may be invalid.

Mortgage Modifications

There are many issues that can occur with regard to the mortgage modification process. Sometimes financial institutions do not negotiate in good faith. They have an obligation in New York State to do this. Trial modifications sometimes are approved and then the permanent modifications are arbitrarily denied. Payments made under the trial modifications are sometimes kept by the financial institutions and homeowners are not given credit for those payments.

Litigation Issues

The Summons and Complaints in the foreclosure lawsuit must be properly served on the appropriate party. Homeowners are entitled to 90 days notice under the Real Property Actions and Proceedings Law before the foreclosure lawsuit is started. Financial institutions need to schedule foreclosure settlement mortgage conferences. They need to file affidavits of due diligence. The death of the homeowner can also create significant issues for the financial institution. Financial institutions also need to comply with the Fair Debt Collections Practices Act.

Legal Defenses and Affirmative Defenses

There are many types of defenses and affirmative defenses that can be alleged in foreclosures other than “I don’t owe the money”. The legal defenses need to be plead in the homeowner’s answer and they need to be backed up by detailed discovery demands forcing the financial institution to turn over all their books and records regarding the underwriting of the mortgage, the closing assignments of the mortgage and compliance with federal and state statutes. The way to win a case often involves investigating what the bank and their attorneys did and what they didn’t do. Finding the bank or their attorneys made a mistake in the mortgage or foreclosure process can be a basis for having the foreclosure lawsuit dismissed.

Elliot Schlissel

Elliot S. Schlissel, Esq. is a foreclosure lawyer having represented homeowners throughout the Metropolitan New York area for more than 3 decades. He can be reached at 800-344-6431 or e-mailed at Elliot@sdnylaw.com.

Penalizing Banks for Foreclosure Irregularities

Wells Fargo and Company, the fourth largest bank by assets in the United States, Bank of America, the largest lender in the United States and Citigroup the third largest

8lender in the United States expect to be sanctioned by the United States government for bad foreclosure practices.

These banks are accused by federal regulators of abusing borrowers and illegally foreclosing on homes. A federal probe has been underway for many months. Federal investigators have found widespread deficiencies in the manner in which home loans are serviced, payments are collected, how loan modifications are processed and the foreclosure process itself on loans.

Banks to Be Penalized

Wells Fargo, Bank of America and Citibank have all been accused of improper and illegal foreclosure practices. There have been reports that federal regulators may demand as much as thirty billion dollars from some 14 mortgage companies regarding improper foreclosure and mortgage practices.

Bank of America is responsible for the most mortgage loans in the United States. It handles 2.1 trillion dollars in home mortgages. Bank of America besides being investigated by federal regulators has been subject to a variety of private lawsuits concerning their mortgage foreclosure practices. Bank of America had temporarily suspended all foreclosure proceedings in 2010 to conduct a review and investigation of its foreclosure and mortgage practices. Bank of America has recently re-instituted foreclosure proceedings. They claim they have dealt with all of their internal problems concerning the processing of mortgages and handling of foreclosure.

Long Island Foreclosure Defense Lawyers

If your home is in foreclosure or you need a mortgage modification we can help you. The Law Offices of Schlissel DeCorpo have been assisting consumers and homeowners with problems concerning debts to financial institutions for more than two (2) decades. We prepare mortgage modification documents. We can help deal with mortgage modification programs that fail to meet the consumers needs. If you are in foreclosure, we will attend foreclosure court conferences on your behalf.

We litigate defective foreclosure lawsuits, predatory lending issues, defective mortgages, bad faith on behalf of financial institutions, and other related real estate proceedings.

In situations where we feel a filing of a Chapter 7 bankruptcy or Chapter 13 bankruptcy is appropriate we file these proceedings with the United States Bankruptcy Court on behalf of our clients. We also assist our clients in reestablishing credit after filing for bankruptcy. We can help stop foreclosure in its tracks. Call us for a free consultation at 1-800-344-6431, 516-561-6645 or 718-350-2802.

Mortgages and Death of a Homeowner

Foreclosure Action Dismissed: Statute of Limitations Expired

When you die your mortgage payments are still due and owing. If your lender does not receive the mortgage payments when you die it can move forward to bring a foreclosure lawsuit against your home. The best way to deal with mortgage payments in the event you die is to have an estate plan set up while you are living to deal with this issue. One way of covering the balance due on your mortgage would be to take out a life insurance policy in an amount sufficient to cover your mortgage. There are specific life insurance policies designed for this purpose.

In the event you are married, have a significant other or have a co-borrower upon your death the cosigner or co-borrower would be liable to make the mortgage payments. However if you are the breadwinner and have no life insurance your co-owner or co-borrower may not be in a position to continue to make the mortgage payments. If the co-owner or co-borrower is not in a position to make the mortgage payments the best route may be to sell the home if there is equity in the home. However, if there are children attending local schools, this may not be a practical solution.

Have a Will

Should you write a will, you can make arrangements in the will with regard to what happens to your home in the event of your death. The issue is not who makes the mortgage payments but who inherits the house upon your death. A will can be also tied into a life insurance trust set up to pay off the mortgage when you die. An estate plan can see to it that your home passes to your heirs in a manner that allows them to keep your home.

The best way to deal with death related issues related to your mortgage or otherwise would be to meet with an estate planning attorney and make a plan in the event of premature death or not so premature death.

Elliot-Schlissel

Elliot S. Schlissel, Esq. is an estate lawyer representing clients in drafting of wills, trusts and probating wills and trusts throughout the Metropolitan New York area for more than 3 decades!.

Judge Cancels Mortgage against Wife Which Was Fraudulently Obtained

Fraudulently-Obtained

Justice Carmen Velasquez sitting the Supreme Court part of Queens County was recently presented with an unusual case. A wife and husband had married in 1981. The home they lived in was purchased by the wife in 1987. In 1996 a divorce action was initiated. A divorce agreement was entered into in 1997. Pursuant to the terms of this agreement the wife received 100% ownership interest in the home that she purchased in 1987.

Fraudulent Mortgage

The wife claimed her husband and his father had fraudulently obtained a mortgage for $840,000.00 against her home. The wife claims she never signed any documents giving her husband and his father a mortgage on her home. The husband took the position that the signatures on the mortgage were the wife’s, she claimed they were forged.

Wife’s Lawsuit

The wife brought a case seeking the declaration that the husband be barred from all claims to the property, she be considered the lawful owner of the property and the fraudulentmortgage be cancelled and discharged.

Justice Velasquez found the wife’s testimony to be credible and reliable. She took into consideration there was no documentary evidence of a mortgage loan by the wife to the husband’s father. She also took into consideration the wife came from an affluent family and had no need to borrow money. In the end Judge Velasquez granted the wife’s demand for relief, cancelled, removed and discharged the mortgage from the wife’s property.

Elliot-Schlissel

Elliot S. Schlissel, Esq. is a foreclosure lawyer representing clients in obtaining and litigating foreclosure lawsuits throughout the Metropolitan New York area. Elliot S. Schlissel, Esq. and his associates have been defending homeowners in foreclosure proceedings for more than 35 years.

The Statute of Limitations Defense

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

https://youtu.be/tIHRQQ2WhdY

Elliot S. Schlissel is a foreclosure lawyer who has been representing homeowners for more than 20 years.  His goal is to keep homeowners in their homes.  He defends homeowners in foreclosure lawsuits and helps his clients in obtaining mortgage modifications.  He and his associates can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

The 90 Day Notice of Default

foreclosure on Long IslandA recent case in Kings County before Justice Yvonne Lewis sitting in the Supreme Court, Foreclosure Part, deals with the 90 day notice of default. New York Real Property Actions and Proceedings Law Section 1304 requires that a financial institution must serve a 90 day notice accelerating the mortgage and calling it due and payable before a foreclosure proceeding can be initiated.

In this case the bank sought to confirm the appointment of a referee granting a judgment of foreclosure and sale. The lawsuit alleged the defendants defaulted under the terms of the note and mortgage. In addition, the suit claimed it was not a “high cost” or “sub-prime” loan and it was actually a commercial mortgage made to a commercial borrower. The financial institution claimed the mortgage was made for investment purposes.

Bank’s Failure to Serve A 90 Day Notice

The defendant maintained the bank had failed to comply with Section 1304 concerning the serving of a 90 day notice of default. Counsel for the plaintiff presented arguments alleging there was no need for service of a notice of default under Section 1304. They claimed they were exempt from this requirement because this was a commercial loan and not a residential loan. The bank’s position was that Section 1304 only applied to residential mortgages. The defendant contended the loan was a personal loan and the mortgaged property was used as his place of principle residence.

Judge Yvonne Lewis found there was a question as to whether the 90 day notice was required, and if it was required, was it properly served upon the defendant. Due to her concern regarding this issue, she denied the bank’s request for a judgment of foreclosure.

Conclusion

The 90 day notice needs to be served in all residential foreclosure proceedings. The failure of financial institutions to serve it can be plead as an affirmative defense in the defendant’s Answer to a foreclosure lawsuit brought by a bank.New York foreclosure defense lawyer

What Is A Default Judgment?

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

https://youtu.be/diLkv3UX-po

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

The Home Affordable Mortgage Program (“HAMP”) Does Not Work Well

loan modification lawyerPresident Obama established the HAMP program in 2009. The purpose of the program was to help 4 million mortgage holders who were in financial difficulty. However, a recent report by Christie L. Romero who was authorized by the Obama administration to monitor the program indicates the program has not accomplished its goal. The report indicated during the six years after the HAMP program was established 887,000 home owners are participating in loan modifications. The purpose of these loan modifications is to reduce the monthly costs of the mortgage to allow the homeowner and their families to continue to reside in their residence.

4 Million HAMP Mortgage Modifications Turned Down by Banks

The report indicates that instead of helping the 4 million borrowers obtain loan modifications, banks participating in the program have rejected more than 4 million borrowers’ requests for mortgage modifications. 72% of all applications for mortgage modifications have been denied. The report indicates there are two major flaws in the program. The first is the HAMP program is a voluntary program for banks. The second major flaw of the program is that banks who participate in the program process all applications based on whatever standards they decide to set up. The report on the HAMP program indicates that if you apply to CitiMortgage for a loan modification you only had a 13% chance of success. If you applied to Chase Manhattan Bank you had approximately a 16% chance of success, and if you applied to Bank of America, you had only a 20% chance of being successful.

Incomplete Mortgage Modification Applications?

The banks involved in the program claim there are numerous reasons why so many mortgage loan modifications are declined by them. They claim that in almost 40% of the cases the homeowner either does not fill out the application completely or provide the requisite documents. My office’s experience is that the banks lose or misplace the applications and the documentation even if it is provided to them several times.

HAMP Applications Rejected Without Just Cause

The report by Ms. Romero indicates that the Treasury Department is responsible for making sure that banks involved in the HAMP program are not rejecting homeowner’s requests for mortgage modifications without just cause. However, Ms. Romero says that is not taking place. She stated “we are constantly seeing problems with the way servicers are treating homeowners and are not following the rules.” She went on further to state “I don’t understand why there hasn’t been a stronger policing from the Treasury on servicers.”

Wrongful Denial of Mortgage Modifications

Jacob Inwald, the Director of Foreclosure Prevention at the Legal Services NYC which represents troubled homeowners, recently stated “virtually never does one get a loan modification application evaluated the first time.” He went on further to state “we deal with these issues every single day. It requires constant push back and challenging wrongful denials.”

There are a variety of reasons why banks are turning down mortgage modifications. However, before they are rejected the homeowner must get through the process. The process which should be relatively quick and efficient is not. Instead it can take many months and numerous requests to provide banks with the same documents over and over again before a mortgage loan modification application can be viewed by the financial institution. The delaying of the prospective homeowner’s mortgage loan modification request can be profitable for a financial institution. The more time that is involved in the modification process, the more interest, penalties and fees the bank can charge the homeowner. This can cause a drastic increase in the amount owed on the mortgage.

Conclusion

My office has been involved in scores of situations involving homeowners who have fallen behind on their mortgage. It is my experience the HAMP program very rarely works appropriately. Homeowners who apply for mortgage modifications must document everything they submit to the bank making sure it is in writing. I suggest mortgage modifications be sent to banks by email and be sent by certified mail, return receipt requested. All follow up on the application should be done in writing either by regular mail or by email. This helps build a case in the event the bank fails to act in good faith with regard to the mortgage modification.New York foreclosure defense lawyer

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