foreclosure proceedings

Foreclosures Loom Concerning Home Equity Loans

December 23, 2013 by Elliot S. Schlissel

There is concern there will be a new wave of foreclosure proceedings in the near future related to home equity lines of credit. Home equity loans are a type of second mortgage. Many home equity loans are almost ten years old. The ten year anniversary usually causes the homeowners who have taken out these loans to be forced to start paying back the principal on these loans as well as the interest they have been paying since the loans were originally taken out. It is estimated there is more than $220 billion dollars of outstanding home equity loans with large financial institutions in the United States. When the consumer has to start paying back principal as well as the interest, there is a significant increase in the amount of the monthly payments.

Popularity of Home Equity Loans

Prior to the housing bubble, financial institutions aggressively marketed home equity lines of credit. These lines of credit allowed consumers to pay back more expensive financial obligations such as credit card debts. In addition, home equity loans were used by consumers to buy cars and to take vacations. As a result of banks’ aggressive marketing of home equity loans between the years 2003 and 2007, the amount of outstanding home equity credit increased from approximately $345 billion to $600 billion dollars. Financial institutions that initially approved these home equity loans were counting on the value of the home to increase to support the payment of these loans. Unfortunately the value of homes stopped rising, and during the housing bubble the home valuations were significantly reduced. Large portions of these home equity loans are now unsecured (this means in the event the house was sold, the first mortgage on the property would be satisfied but there would be insufficient funds at the time of the closing of the real estate transaction to satisfy the home equity loan).

Averting a Home Equity Loan Crisis

A home equity loan crisis can be averted if the real estate market turns itself around and real estate values start increasing again. As the real estate values increase, home equity loans will become secured again and in the event of sale of the home, there will be sufficient equity in the homes to pay off the home equity loans.

Elliot S. Schlissel is a foreclosure attorney representing homeowners fighting foreclosure lawsuits. In addition, he helps homeowners obtain mortgage modifications to keep their homes out of foreclosure.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure proceedings, HELOC, home equity line of credit, 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

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.

New Law Helps Homeowners: Part II

October 4, 2013 by Elliot S. Schlissel

Standing to Sue

There is a key concept in New York law concerning standing to sue. If Bank 1 gives a loan to a homeowner and Bank 1 transfers or surrenders the mortgage to Bank 2, the homeowner is entitled to notice of the transfer. In addition, appropriate documents called an Assignment of Mortgage must be filed with the County Clerk’s office in the County in which the real estate is maintained. This applies to each and every subsequent transfer of the mortgage from one financial institution to another.

The failure to properly file all necessary documents or notify the homeowner disallows the financial institution at the end of the line from having standing to bring the lawsuit. In these cases, if the homeowner hires a foreclosure defense lawyer knowledgeable about these details, an affirmative defense of lack of standing can be placed in the answer to plaintiff’s complaint. This defense can be the basis for the dismissal of the lawsuit. My law firm has had numerous lawsuits dismissed because of lack of standing issues in the many foreclosure cases we have handled.

One of the additional purposes of this legislation is to clarify issues concerning who is entitled to sue a homeowner and how cases should proceed in a more orderly and logical manner, starting with the Foreclosure Court Conferences and thereafter with litigation.

Certificate of Merit

One of the purposes of this new statute is to eliminate the filing of misleading or fraudulent documents in foreclosure proceedings that has commonly been referred to as “robo-signing.” Chief Justice Jonathan Lipman of the New York State Court of Appeals, stated “the bill is crucial to ensuring the integrity and transparency of the foreclosure process especially for those New Yorkers impacted by the recent economic crisis.”

Certificate of Merit must be filed at the same time the foreclosure proceeding is initially commenced. The Certificate of Merit requires the attorney to attach to the Certificate any relevant documents concerning modifications, extensions, consolidations and assignments affecting the instrument and/or this indebtedness.

Missing Documents

In cases where the documents are missing or lost the statute allows the attorney or the representative of the plaintiff’s financial institution to file an appropriate affidavit which attests to all of the facts and veracity of those documents which are missing.

The Certificate of Merit specifically pertains to foreclosure lawsuits brought against owner occupied residences. This replaces the affidavits attorneys had been required to file under court administrative rules since 2010.

Legal Limbo

In the past, lenders have brought foreclosure lawsuits without the proper documentation that they were entitled to bring these lawsuits. This caused cases to be maintained on the court’s dockets for long periods of time tying up the legal system involved with foreclosures.

Christine Keef, a senior staff attorney with the Empire Justice Center, stated with reference to the new law “this is going to prevent homeowners from being stuck in this legal limbo in a time period when fees and costs continue to accrue on a loan, making it harder for the homeowner to afford a modification when one is offered.”

Elliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the metropolitan New York area.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, New York foreclosure defense lawyers

New Law Helps Homeowners: Part I

October 2, 2013 by Elliot S. Schlissel

The New York State legislature has passed a new statute which has an effective date of August 30, 2013. The statute impacts in the manner and procedures utilized by financial institutions and their attorneys commencing foreclosure proceedings within the State of New York.

Certificate of Merit

All foreclosure actions commenced after August 30, 2013, will require a Certificate of Merit. This document must be attached to the Summons and Complaint. The Certificate of Merit requires the attorney for the plaintiff to certify he or she has reviewed all of the facts in the case. In addition, the attorney will have to certify based on consultation with representatives of the plaintiff, (financial institution) who is identified in the certificate, that the attorney has taken the time to review pertinent facts and documents related to this proceeding. The attorney will have to review the mortgage, the security agreement, the note or the bond underlying the mortgage. Only after this review, if there is a reasonable basis for the starting of a foreclosure lawsuit, can the attorney at that point bring a proceeding to foreclose.

Note and Mortgage

This new statute will require the attorney for the plaintiff to attach a copy of the note and the mortgage to the Summons and Complaint. In addition, the attorney will have to attach all documents evidencing transfers leading from the original financial institution to the current plaintiff showing all documents have been appropriately filed and the party bringing this lawsuit has standing to sue the homeowner.

In the event the attorney and/or the financial institution does not completely comply with these new requirements the judge handling the case will have full authority to dismiss the foreclosure proceeding. In addition, the judge will have authority to deny all accrued interest and other financial expenses that increase the amount of the indebtedness owed by the debtor during the entire long foreclosure process.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: Certificate of Merit, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure proceedings, New York foreclosure attorney, Standing to sue

Mortgage Servicing Agencies’ Failure to Perform Their Duties

September 26, 2013 by Elliot S. Schlissel

The Consumer Financial Protection Bureau is the new agency that is supposed to regulate mortgage servicing companies. In a recent review of mortgage servicing companies this agency found some services to be “sloppy” when dealing with transferring paperwork when loans are sold. They also found misapplication of payments on mortgages and the failure of mortgage servicing companies to pay the taxes on the homeowners’ homes on a timely basis.

Homeowners Don’t Know Whom They Are Supposed To Pay

When the average homeowner purchases his or her home they take out a mortgage. Often shortly after they take out their mortgage the mortgage is sold by one lender to another. The second lender thereupon hires a mortgage servicing company to service the loan. Sometimes, a few months later, the second lender sells the mortgage to a third lender. This leaves the homeowner unsure of where, and to whom, they should pay their mortgage. This causes consumers consternation as to whether they are making their payments to the correct entity and if they are receiving the full credit for their payments.

Consumers Financially Injured By Mortgage Servicing Companies

Tax payments on real estate are usually due and owing in December. There have been mortgage servicing companies that have delayed making these payments until January. When a mortgage servicing company pays the taxes in the following year, the homeowner loses the important tax deduction for the mortgage payment in the prior year. This causes the homeowner to pay higher income taxes due to the loss of this tax deduction.

The Consumer Financial Protection Bureau has set up a new mandated set of rules financial servicing companies must comply with. These rules go in effect in January of 2014. The purpose of these rules is to deal with issues that have come up during the mortgage loan modification process which have been exposed under the HAMP program. The following are a list of some of the problems that have been uncovered by this agency concerning mortgage services:

Abnormally long application processes.
The lack of quality control standards and the supervising of underwriters.
The failure to send out denial notices to homeowners.
The failure to have written policies and procedures related to mortgages.
Disorganization and understaffing by mortgage servicing companies.

Mortgage Modifications

Many homeowners have been living with the panacea that they can obtain a mortgage modification for their home under the HAMP program only to find out that only a small number of the applicants get final approval of mortgage modifications. Hopefully this agency will deal with the numerous problems that exist today.

Elliot S. Schlissel, Esq. is a foreclosure attorney who has published more than fifty (50) articles related to foreclosure defense.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings

Foreclosures Loom Concerning Home Equity Loans

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

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

New Law Helps Homeowners: Part II

New Law Helps Homeowners: Part I

Mortgage Servicing Agencies’ Failure to Perform Their Duties

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