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Defective Foreclosure Lawsuits

foreclosure lawyer New YorkHas the bank initiated a foreclosure action against you? How do you know the bank has acted appropriately with regard to fulfilling their obligations as a financial institution? The question then becomes, is the foreclosure lawsuit defective?

There are a variety of reasons that a bank’s foreclosure proceeding against you may be defective. The first issue is whether the bank has all of the proper documents to have legal standing to foreclose on your property. Another issue is how significant misrepresentations, predatory lending issues, or issues involving sub-prime mortgages affected your case.

Exposing Defects in Foreclosure Cases

How do you expose a defect in a foreclosure case? To start with, all of the documents related to the mortgage need to be reviewed. In addition, a detailed Answer to the Summons and Complaint needs to be filed with both the court and opposing counsel. Numerous affirmative defenses concerning potential defects in the case need to be alleged. Thereafter a document demand must be made seeking copies of all of the documents the bank has in its file related to this matter. In addition, interrogatories or bills of particulars can be served on the bank asking a variety of questions concerning the origination of the mortgage, the term of the mortgage and various issues pertaining to the mortgage.

Sloppy Paperwork by Banks

When the real estate industry was booming in 2006 through 2009, banks became overwhelmed with the number of applications being submitted to them. In many situations, their paperwork was sloppy, unprofessional, improperly handled, involved misstatements, false statements, and applications submitted by mortgage brokers that did not reflect the financial circumstances of the prospective mortgagor. Underwriters often lost documents concerning mortgage applications. They also misplaced documents or simply incorrectly handled the underwriting of the mortgage. It is the job of the foreclosure defense attorney to bring all of these problems to light when a bank seeks to foreclose against the homeowner. It is then presented to a judge with the hope the judge will carefully review the situation and reach the conclusion the bank has acted improperly.

Legal Rights and Options

So how do you protect your legal rights? What are your options? The only way you will find an answer to these questions is to consult with an experienced, dedicated foreclosure defense attorney. You can call our office for a free consultation. Our phones are monitored 24/7. Our office phone numbers are 516-561-6645 and 718-350-2802.New York foreclosure defense lawyer

Zombie Homes

Please click on the link below to watch today’s video blog:

https://youtu.be/-_h4DA8o_fU

Elliot S. Schlissel is a foreclosure lawyer. He has helped hundreds of New Yorkers stay in their homes. He fights foreclosure lawsuits throughout the Metropolitan New York area and helps his clients obtain mortgage modifications. Elliot and his staff of attorneys can be reached 7 days a week.  He and his associates can be reached by calling 516-561-6645 or 718-350-2802 or by sending an email to schlissel.law@att.net.

Fighting Foreclosure Lawsuits

foreclosure lawyer for homeownersIf you are behind on your mortgage payments, do not despair. Foreclosure lawsuits can be fought in the courts in New York. If you receive a letter from your financial institution indicating your home is going into foreclosure or you are served with a Summons and Complaint, your best defense is to go on the offense.

Legal action can be taken to protect your home. The first thing which needs to be done is to have the situation properly evaluated. Should you apply for a mortgage modification? Can you qualify for a forbearance agreement? Should you litigate the foreclosure? Has the bank been involved in predatory lending, violations of Truth in Lending Laws, violation of New York State or Federal banking laws? Have they served you with the 90 day notice? Have they acted properly during the course of negotiations for mortgage modifications? There are numerous issues which need to be analyzed and dealt with as part of a foreclosure defense strategy.

Bankruptcy

Is bankruptcy the right solution for you? Should you file for bankruptcy now or wait until later stages of the foreclosure proceeding? Is a Chapter 7 bankruptcy the appropriate bankruptcy to file or should you file a Chapter 13 which involves a payment plan? Again, this depends on the circumstances involved in each case. Each family’s circumstances and needs are different.

Victim of Predatory Lending?

Predatory lending generally deals with unfair business practices or unethical business practices which lenders sometimes engage in. If the prospective mortgage holder was deceived or agreed to an unfair or abusive mortgage term, it may involve predatory lending. Due to the nature of predatory lending, most homeowners who have been subject to predatory lending end up having their homes foreclosed upon, and if appropriate action isn’t taken, lose their homes.

Predatory lending practices can be exposed as part of a foreclosure defense during the course of a foreclosure lawsuit. When served with a Summons and Complaint the homeowner can allege in his Answer the defense of predatory lending.

Conclusion

Should you find yourself behind on your mortgage, facing a foreclosure lawsuit or in the middle of a foreclosure lawsuit, the best way to protect your interests and keep your family in your home is to hire an experienced, dedicated foreclosure defense attorney.New York foreclosure defense lawyer

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

Long Island Foreclosure Rates Continue to Climb

foreclosure defense attorney on Long IslandForeclosure rates for both Nassau and Suffolk Counties, on Long Island, are the highest in New York State. Approximately 3% of the homes in Suffolk County are in foreclosure. In Nassau County, approximately 2 ½% of all homes are in foreclosure. There are more than 27,000 pending foreclosure cases in Nassau and Suffolk Counties.

The Housing Crisis

The housing crisis has hit Long Island homeowners harder than homeowners in other areas of the State. Superstorm Sandy contributed to this problem by devastating many homes on Long Island. Thomas DiNapoli, the Comptroller of New York State, recently stated “if you are on Long Island and you have a huge mortgage, based on a price that no longer was attainable, you could easily get ‘underwater’.” Underwater refers to homes which owe more money on their mortgages than the home is worth.

While in many other areas in New York State the foreclosure crisis is easing, it continues to get worse in both Nassau and Suffolk Counties. In January of 2015, the number of homes going into foreclosure in Nassau County jumped by almost 20%. Some of this increase in homes being foreclosed upon was related to the delayed impact of Superstorm Sandy, which hit Long Island in 2012, has had on homes going into foreclosure. In the State of New York, approximately 1 in every 90 homes is in foreclosure. While in Nassau County 1 out of every 40 homes are in foreclosure, and in Suffolk County 1 out of every 35 homes are in foreclosure. Comparing this to the foreclosure rate in New York City which has only 1 out of every 116 homes in foreclosure shows the huge problem faced by homeowners in Nassau and Suffolk Counties.New York foreclosure defense lawyer

When Does a Lender Have Standing To Initiate a Foreclosure Case?

foreclosure defense lawyerA financial institution has standing to foreclose on a mortgage when it is the holder or assignee of the subject mortgage. In addition, the financial institution must be the holder or assignee of the underlying note prior to the commencement of the foreclosure action which is initiated by the filing of the Summons and Complaint in the County Clerk’s office of the County in which the action is initiated. When the note is accepted by the assignee the mortgage passes to the new institution. It should be noted the transfer of a mortgage without the accompanying note does not validly transfer the mortgage.

How the Bank Becomes the Holder or Assignee of the Mortgage

For a bank to obtain standing to initiate a foreclosure lawsuit, it must be the holder or assignee of the note as well as have the original note and mortgage in its possession.

A plaintiff has standing to foreclose on a note if they are the holder of the note under the New York Uniform Commercial Code, if a person has possession of the note by delivery “from a person entitled to enforce it for the purposes of giving the plaintiff the right to enforce it”, the note was assigned to the plaintiff “by a person entitled to enforce it, for the purpose of giving the plaintiff the right to collect the debt.”

Lack of Standing Defense

It is important in every foreclosure case for a defendant to allege the plaintiff, financial institution, doesn’t have standing to bring the lawsuit. At the time the Answer is interposed, the defendant will usually not know whether this is true or not. The defendant will thereafter, through discovery demands to obtain copies of notes, mortgages and other original documents and/or review records at the County Clerk’s office, ascertain whether this defense has any merit to it. However, the way pleadings work in the State of New York, you must plead any potential affirmative defense whether you know the defense is valid or not. Thereafter you try to obtain records during the discovery process to validate your defense.

New York foreclosure defense lawyerElliot Schlissel is a foreclosure defense lawyer representing individuals in foreclosure cases throughout the Metropolitan New York area.

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

Rescission of a Loan

Please click on the link below to watch today’s video blog:

https://youtu.be/UU2gtDLgo2k

Elliot S. Schlissel is a foreclosure defense lawyer helping homeowners stay in their homes throughout the Metropolitan New York area.  He and his associates can be reached for consultation at 516-561-6645 or 718-350-2802 or send an email to schlissel.law@att.net.

Truth in Lending Violations As a Defense

Please click on the link below to watch today’s video blog:

https://youtu.be/yuiEqLNefHw

Elliot S. Schlissel is a foreclosure defense lawyer helping homeowners stay in their homes throughout the Metropolitan New York area.  He and his associates can be reached for consultation at 516-561-6645 or 718-350-2802 or send an email to schlissel.law@att.net.

The Rise of Non-Bank Mortgage Servicing Companies – Part I

There has been an explosive rise in the number of mortgages serviced in the United States by non-bank mortgage servicing companies. Mortgage servicing companies don’t offer checking accounts or savings accounts. They are simply hired by financial institutions to process payments and perform various administrative banking tasks that are commonly referred to as “servicing”. These non-bank institutions in the year 2014 are servicing a larger and larger portion of all mortgage loans in the United States. Non-bank mortgage servicing companies operate under a different regulatory scheme than banks. They are subject to considerably less scrutiny with regard to their practices.

Alarm About Non-Bank Servicing Companies

A number of homeowner complaints concerning large non-bank servicing companies are growing at a significant rate. The largest non-bank mortgage servicing companies are Ocwen Financial Corporation and NationStar Mortgage. These two mortgage servicing companies, pursuant to the Consumer Financial Protection Bureau, accounted for 4,658 complaints from consumers in the year 2014. This was a dramatic increase in the number of consumer complaints from previous years.

Benjamin Lawsky, Superintendent of New York’s Department of Financial Services, recently stated that behind every troubled mortgage loan is “a family, a person, and it’s usually someone struggling to make ends meet”. Long Island is a great example of that. We have lots of homes under water and people who need loan modifications.

Transferring of Mortgages

The servicing of mortgages is not a simple business model. Each and every time the mortgage gets transferred from one bank to another or one servicing agency to another, there is potential for mistakes and errors which can result in putting the homeowner into financial turmoil. There have been numerous cases of individuals whose mortgages have been transferred from one servicer to another that have had their lives turned upside down by the mistakes made by these agencies.New York foreclosure defense attorney

Foreclosure Defense in Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick and Bellmore, New York

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