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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 II

help for homeowners facing foreclosureFinding Errors By The Bank’s Servicing Organization

You should maintain organized records with regard to all transactions concerning financial institutions who hold your mortgage and their servicing organizations. There is a federal statute called the Real Estate Settlement Procedures Act. It is commonly referred to as “RESPA”. This provides you with a manner in which you can challenge many of the types of errors and improper practices engaged in by banks and their servicing organizations. It also gives you an ability to obtain the information necessary to make challenges.

To obtain the information under the RESPA law you should send the servicing organization by certified mail, a written request identifying you as the homeowner who entered into the loan and the account and information regarding the loan. The servicer has a legal obligation under the RESPA statute to notify you within 5 business days of their receipt of your qualified written request acknowledging your request was received by them. Thereafter they have 30 business days to provide you the information you requested be produced or explain to you in writing why it cannot be produced. If it cannot be produced they must provide you with the name and contact information of an individual with whom you can follow up to obtain this information. It should be noted the 30 business days to comply with your request can be extended by 15 business days if the servicing organization gives you written notification within the 30 day period of their request for an extension and the reasons why they are requesting this extension. Once you have made this request and the servicer is working on a response, they cannot report to a credit bureau information regarding alleged overdue payments that relate to the information contained in your request. If you should request this information after the foreclosure lawsuit has been initiated it will continue during the term that the request is being processed. In the event the servicing organization you requested the information from is no longer the servicing organization and there is another servicing organization which has replaced this servicing organization your written request must be sent not more than one year after the transfer to the new servicing organization.

Statutory Damages

Should the servicer fail to comply with your request, you can take legal action against the bank and you are entitled to $2,000 in statutory damages plus reimbursements for all of your attorney’s fees and in addition you are entitled to be compensated for any other losses or damages you might have. Unfortunately, due to the lobbying efforts of banks, this remedy will not cause the foreclosure action to stop or have any impact on the foreclosure lawsuit.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 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

mortgage modification lawyerViolations 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

The Response To Being Served With A Summons And Complaint: The “Answer” – Part II

foreclosure lawyer“Counterclaims”

In addition to denying the allegations and submitting affirmative defenses, the homeowner can countersue the financial institution within the confines of the foreclosure lawsuit. These counter lawsuits are referred to as counterclaims. An example of a counterclaim would be a request to quiet title based on some fraudulent activity. This basically means you wish to set aside the mortgage because of fraudulent activity. Counterclaims can also be related to monetary damages based on filing a false lis pendens which damaged the title to the homeowner’s home. There are other possible counterclaims which can be brought.

Default

Homeowners who do not submit an Answer to the court and the plaintiff’s counsel default with regard to the lawsuit. This allows the attorney for the bank to take a default judgment against the homeowner. The default judgment basically indicates the homeowner did not contest the lawsuit and the bank is entitled to all of the relief requested in their Complaint. When a financial institution receives a default judgment they can move much quicker to take action to cause the home to be sold at auction. The default will also allow the bank to obtain a deficiency judgment if they plead it in their Complaint should the proceeds of the sale of the home not satisfy the balance due in the note and mortgage.New York foreclosure defense attorney

The Response To Being Served With A Summons And Complaint: The “Answer” – Part I

foreclosure defense lawyerWhen homeowners are served with a Summons and Complaint they must file a response to that Summons and Complaint. The response is referred to as an “ANSWER“. There are very specific and detailed requirements as to what should be contained in the Answer submitted by the homeowners.

To start with, the Answer should include a response to each and every numbered paragraph and claim made by the financial institution in its Complaint. The paragraphs in the homeowners’ Answer should be numbered. The numbered paragraphs in the homeowners’ Answer should respond to the numbered paragraphs in the financial institution’s Complaint. The homeowner can either admit the allegations, deny the allegations, or deny knowledge or information sufficient to either admit or deny the allegation contained in the numbered paragraph of the financial institution’s Complaint.

The attorneys for the financial institution must prove all of the allegations in their Complaint which are either denied or which the homeowner denies knowledge or information sufficient to form a belief as to the truthfulness of the allegation contained in that paragraph. The paragraphs which are either admitted or not denied by the Answer of the homeowner are deemed admitted and the bank will not have to prove the truthfulness of those allegations at the time of trial.

Affirmative Defenses

In addition to either admitting, denying, or denying knowledge or information about the allegations in the specific paragraphs of plaintiff’s Complaint, the homeowners can assert affirmative defenses in their Answer with regard to the foreclosure lawsuit. An affirmative defense is basically a legal argument as to why the bank should not be allowed to be successful in prosecuting the lawsuit. Examples of affirmative defenses can deal with the fact the mortgage is actually current, and not overdo; that documents were signed by robo-signers; the homeowner was fraudulently induced into taking the loan; the financial institution violated Federal Truth in Lending Laws, New York State banking laws or Federal banking laws, the Fair Debt Collection Practices Act; predatory lending issues; bad assignments; lack of standing to bring the lawsuit; failure to serve a 90 day notice; failure to adhere to all types of procedural foreclosure requirements and many, many other affirmative defenses.

The Answer to the bank’s Complaint must be sworn to by the homeowners and acknowledged before a Notary Public. Thereafter a copy of it must be served on the attorney for the bank. The homeowners must file a copy of the Answer with the court and the bank’s lawyers. The Answer must have attached to it an Affidavit of Service of the Answer on the bank’s attorneys.New York foreclosure defense attorney

Underwater Homes

foreclosure defense lawyer in New YorkThe term “underwater homes” means the home is worth less than the amount owed on its mortgage. Another way of referring to a home that has a mortgage greater than its value is “negative equity”. Most people who are in underwater homes are unable to sell their home or refinance it. At the height of the real estate crisis in America in 2012, approximately one-third of all homes in the United States were underwater. Today, approximately 15% of homes in the United States are underwater. This represents about 12% of all homeowners in the country, or approximately 950,000 homeowners have homes which are underwater. In many instances, homeowners’ homes are so far underwater that the mortgage is twice the value of their home.

Real estate values have been going up recently. However, many homes in America are so far underwater these homes will never reach a point of having equity in them.

Lack of Funds and Bad Credit

This can result in the homeowner trying to rent a home when they don’t have sufficient funds to pay the security and one month’s rent on a rental apartment or rental home. They also will most likely have a low credit score because they are behind on their mortgage payments. Landlords do not like to rent homes to families that have bad credit.

What Should Homeowners With Underwater Homes Do?

The best recommendation would be to consult with a foreclosure defense attorney. What homeowners of underwater homes should not do is move out and abandon their homes. The fact their home is underwater and they are behind on their mortgage, does not mean they are in imminent threat of losing their home and being forced out of it. In most situations, it is in the homeowner’s best interest to continue to live in their home. Many homeowners do not understand the full implications of simply moving out of their home, abandoning it and not paying their mortgage.

Conclusion

Don’t move out of your home solely if you are behind on your mortgage payments. Try to obtain a mortgage modification. Seek out an experienced foreclosure lawyer and review your options with him or her.New York foreclosure defense lawyer

Foreclosure Lawsuits Time Barred by the Statute of Limitations

foreclosure attorneys for homeownerThe statute of limitations for bringing a foreclosure lawsuit in the State of New York is six years from the time the mortgage is accelerated by the bank (called due) or from the initiation of the foreclosure legal action, whichever occurs first.

The real estate crisis in America started many years ago. Foreclosure defense attorneys are now coming across cases initiated by banks where the statute of limitations defense bars the banks from moving forward with their foreclosure case. It should be noted the statute of limitations is a defense to the foreclosure lawsuit. However, it does not remove the bank’s lien from the property. What you end up with in a case where the statute of limitations defense is effectively plead, a bank is unable to collect on their mortgage but their mortgage still remains a lien on the property preventing it from being sold without it being repaid.

Acceleration of the Mortgage

A mortgage requires that a homeowner make payments over a period of time. The usual length of mortgages are 15 or 30 years. During the period the homeowner is making payments, all they owe each month is the amount of their payment. The acceleration of the loan involves the bank usually sending a letter to the homeowner saying it is calling the entire balance of the mortgage due and owing. This means, if the homeowner sends a payment in the correct monthly amount to the bank they will usually reject it claiming they want the entire mortgage paid in a lump sum payment. It should be noted however, if the homeowner is several months behind and pays all the arrears, the bank will usually reinstate the mortgage.

After the bank sends the acceleration letter or initiates a foreclosure lawsuit, if the homeowner takes action to acknowledge the debt, it can start the statute of limitations running all over again.

Conclusion

If there is any possibility the bank can be barred by moving forward with a foreclosure, it is extremely important the statute of limitations be plead as an affirmative defense in the homeowners’ Answer to the Summons and Complaint.New York foreclosure defense lawyer

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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