foreclosure – Page 7

New York’s New Mortgage Proposal

January 22, 2014 by Elliot S. Schlissel

New York is considering a new proposal which would provide an incentive for banks to modify mortgages on homes which are under water. Under this new proposal, the financial institutions would reduce the amount of the mortgage on homes under water. The mortgage amount would then be brought into conformity with the value of the home. In exchange for the reduction in the mortgage, the bank would be entitled to share in the profits if the home eventually increases in value and is sold. This new proposal will require changes in various state regulations. Under the current law, banks cannot enter into these types of arrangements with homeowners.

Governor Cuomo Backs New Mortgage Proposal

Governor Andrew Cuomo stated this initiative will help keep families in their homes and out of foreclosure, while at the same time reducing potential loses for investors. He went on to further state with regard to this new proposal “that’s good for homeowners, good for local neighborhoods, and good for the long term strength of the housing market.”

Unfortunately, pursuant to existing federal rules and regulations, the large majority of home loans in New York cannot qualify under this program. This is because Fannie Mae and Freddie Mac, the two federal agencies which purchase mortgages for approximately two-thirds of all home loans in the State of New York, do not allow forgiving outstanding mortgage balances.

The new proposed program would be available to homeowners who owe more on their homes than their homes are worth and have tried to obtain mortgage modifications and have been unsuccessful. Under this program, banks would provide disclosure to the homeowners concerning the terms of the new loan modifications and how much of the profits the bank would receive upon the sale of the home. The proposal would limit the bank to either 50% of the increase in value in the home or the total amount forgiven under the mortgage, whichever is less.

Homeowners Reluctant to Share in Appreciation

Interviews with a number of homeowners with regard to this new proposal, indicated they were reluctant to share in the appreciation of their homes with banks.

Conclusion

The program is an excellent idea. Homeowners whose homes are under water and are behind on their mortgage would be given a second chance to stay in their homes and have their mortgage modified to a realistic amount they could afford.

Squatters Rights to Foreclosed, Vacant Homes

January 16, 2014 by Elliot S. Schlissel

There is a misunderstanding that squatters can walk into foreclosed homes which are vacant and end up the owner of the homes. What squatters refer to concerning extra-legal possession of homes actually refers to the legal concept of adverse possession. Adverse possession deals with openly and notoriously being in possession of property, in the State of New York, for a period of ten years. In the appropriate circumstances, should the squatter live openly and notoriously in the vacant home for ten years, they can claim ownership of the property.

Squatting Equals Trespassing

The theory of adverse possession actually deals with property boundary disputes. Under adverse possession theory, the boundary between neighboring properties can be changed if one owner has utilization of the other owner’s property around the boundary line for a period of ten years.

Squatters sneak into homes when no one is around. This is usually undertaken by vagrants or homeless people. Adverse possession of the home can only be claimed if the squatter lives openly and notoriously for a period of ten continuous years in the residence.
What most squatters are doing is trespass on someone else’s property. Sometimes during foreclosure cases, homes are vacant for a period of time. This period of time will usually not last ten years, the period of time necessary for a squatter to claim open and notorious adverse possession rights to a property.

Former Owners Remaining in the Home

In a foreclosure proceeding, the home in the State of New York can be sold on the courthouse steps. At the time of the sale, the homeowner whose home is being foreclosed upon will most likely still be living in the home. After the sale takes place, the new owner of the home can bring a landlord tenant case to evict the former homeowners from their home. The failure of the homeowners to move from the house after it is sold, in foreclosure, does not create an adverse possession situation. Eviction proceedings can be time consuming. During the course of the eviction proceeding, the former homeowners would be entitled to stay in their home until such time as the court grants an order forcibly removing them from the home.

Conclusion

Squatting in an abandoned, foreclosed home and creating ownership rights based on the legal theory of adverse possession is unlikely to happen!

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: adverse possession, foreclosure, foreclosure defense, foreclosure proceedings

Negotiations with Bank Does Not Stop Foreclosure Lawsuit

January 14, 2014 by Elliot S. Schlissel

A foreclosure lawsuit was brought by Citi Mortgage against Vatash. Vatash submitted an answer with affirmative defenses to the summons and complaint served by Citi Mortgage. Citi Mortgage moved for summary judgment. In their application they sought to dismiss the answer brought by Vatash. Vatash claimed, in his answer, Citibank lacked standing to bring this foreclosure action. He also claimed Citibank’s motion was inappropriate because he was involved in discussions with Citi Mortgage concerning a loan modification. He took the position since loan modification discussions were ongoing, Citibank had no right to move forward with the foreclosure case.

Standing Argument Dismissed

Justice Thomas Whelan sitting in a Supreme Court Part in Suffolk County, ruled Vatash’s argument that Citi Mortgage didn’t have standing was procedurally defective. The ruling was based on the allegation that Vatash failed to assert lack of standing in his answer or in a pre-answer motion to dismiss. In addition, the court took the position the argument even if it had been submitted appropriately in the answer, was substantively without merit. The court held Citi Mortgage was the owner and holder of the note and mortgage upon its merger with the original financial institution which made the loan.

The court ruled in favor of Citi Mortgage’s application for summary judgment (an application to grant a judgment without the need for a trial because there are no issues of fact). The court took the position the opposition papers submitted by Vatash did not create an issue of fact or an adequate defense.

Negotiations Do Not Stop Foreclosure Cases from Moving Forward

The Court specifically held the fact that Vatash was engaged in negotiations and/or discussions with Citi Mortgage is not a defense to the foreclosure lawsuit. Citi Mortgage’s motion for summary judgment was granted.

Conclusion

There are a number of important issues which were dealt with in this case. To start with, a lack of standing argument must be plead in the answer to the Summons and Complaint. Secondly, discussions with a bank concerning mortgage modifications or other ways of resolving the case have no impact on the foreclosure lawsuit moving forward.

Elliot Schlissel is a foreclosure defense lawyer. His office has represented homeowners for more than 45 years on mortgage foreclosure lawsuits throughout the Metropolitan New York area.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, mortgage modification, Mortgage Modification new york attorney, New York foreclosure attorney

Mortgage Lender Penalized for Failure to Comply with Notice Requirements

January 11, 2014 by Elliot S. Schlissel

Judge Dolinger sitting in the Supreme Court in Rochester recently ruled a mortgage lender who did not comply with the “consumer friendly notice requirements under New York State law should be given a second chance to comply with the statute.” However, the lender was permanently enjoined from imposing any interest, fees, costs or legal expenses on the borrower from 90 days before the filing of the complaint until the bank complies with the New York notice requirements.

Foreclosure Prevention Tenant Protection and Property Management Act

The Foreclosure Prevention Tenant Protection and Property Management Act of 2009, requires a lender give the homeowner notice prior to the house being foreclosed on. In the case before Judge Dolinger, Citi Mortgage failed to comply with this statute. Judge Dolinger was concerned if the case was dismissed, Citibank would get a second chance to comply with the statute’s notice requirements. However, the judge noted in his decision the bank’s failure to comply with the notice requirements in their first attempt. If they were successful in the second attempt the borrower would be worse off because they would be responsible for the entire amount of the unpaid debt including the portion of the interest penalties and attorneys fees which accrued on the debt during the period of time between Citi Mortgage’s first chance at complying with the statute and their second chance. Judge Dolinger wrote in his decision, “the borrower is worse off because the amount of the debt has been increased during the two year period in which the foreclosure action has been pending making a recasting of the mortgage more costly, if not prohibitively so.” To deal with this, Judge Dolinger entered an order permanently enjoining the bank from imposing any interest, fees or legal expenses on the borrower from 90 before the filing of the complaint until such time as they complied with the statute.

Notice Regarding Foreclosure Lawsuit

New York Real Property Actions Proceedings Law (RPAPL) § 1304 requires a creditor to notify a borrower by registered or certified mail as well as by first class mail, offering assistance on how to avoid foreclosure. Citi Mortgage had failed to comply with this section of the Real Property Actions Proceedings Law. In the case before Judge Dolinger, he stated “there was no sworn statement from any bank official regarding the mailing.” Judge Dolinger, based on the bank’s failure to provide the sworn statement regarding the mailing, could have dismissed the foreclosure lawsuit. He refused to do so because he stated he “will not allow the bank to escape the consequences of its failure to follow” the law. Judge Dolinger went on to state “when and if the bank complies” with this statute it can collect “any principal payments due at any time under the note and mortgage.” Judge Dolinger’s ruling, however, denied the bank the ability to collect interest, fees, costs and attorneys fees during the period of time the bank was in non-compliance with the statute.

Conclusion

This was a victory for the mortgagors, albeit a small victory.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure defense, foreclosure defense attorneys, New York foreclosure attorney

Foreclosure Court Conference Denied

January 9, 2014 by Elliot S. Schlissel

In a case of first impression, Justice Cohen sitting in the Appellate Division, Second Department (an appeals court) recently wrote a decision that stated a residential foreclosure lawsuit which was caused by a default on a commercial loan is not entitled to participate in the mandatory settlement court conference program. Justice Cohen stated in his decision “while it is unfortunate that here a primary residence may be lost in foreclosure not everyone under every circumstance is entitled to reap the protections afforded to victims of the mortgage crisis by the New York State Legislature.”

History of the Case

Roz Valt Corp. took out a loan from Independence Bank in December 2006. It borrowed $230,000. The purpose of the loan was to provide funds to enable the corporation to acquire various types of equipment, to pay construction costs and to be utilized as funds to set up a “Quiznos” submarine shop in Brooklyn.

The president of Roz Valt Corporation was Roslyn Valentine. She was personally liable for the payment of the loan. In addition, she executed a collateral mortgage to Independence Bank for $230,000. This was a second mortgage on her home in Queens County. Unfortunately, Roz didn’t make the payments under the loan. Independence Bank brought a foreclosure action on the second mortgage on her home. In her pleadings, Ms. Valentine argued she was entitled to the mandatory settlement court conference pursuant to New York Civil Practice and Law Rule Section 3408.

Court of Appeals Ruling

The New York Court of Appeals ruled New York Civil Practice Law and Rule Section 3408 applies to settlement conferences for “any residential foreclosure action involving a home loan.” Judge Cohen agreed with Ms. Valentine’s argument that the settlement court conferences were designed to help homeowners avoid their homes being taken from them in foreclosure. However, he also found, in this case, she was not entitled to a foreclosure settlement court conference. He took this position because this case involved a commercial loan. The loan was made to Roz Valt Corporation which was not a natural person. The money loaned was not utilized for housing purposes. He also found Ms. Valentine was a guarantor of the loan not the borrower.

Conclusion

Unfortunately, Judge Cohen’s decision may cause Ms. Valentine to lose her home.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: foreclosure, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, foreclosure settlement conference, New York foreclosure attorney, residential foreclosure

Foreclosure Dismissed – Citibank Has No Standing

January 3, 2014 by Elliot S. Schlissel

In a case before Justice Lizbeth Gonzalez, in the Supreme Court of Bronx County, the judge dismissed a foreclosure lawsuit brought by Citibank.

Citibank had filed a foreclosure proceeding against a homeowner named McCray. They had taken this action on behalf of a Bears Stearns Alt-A Trust. McCray brought a motion requesting the foreclosure lawsuit be dismissed. He argued Citibank had lacked standing to bring the lawsuit. Citibank claimed it had standing to bring the lawsuit because it was the holder of the original note.

Holder or Assignee of the Note and Mortgage

Judge Gonzalez in her decision stated a foreclosing party in a foreclosure lawsuit has standing when they are both the holder or assignee of the mortgage and underlying note at the time the action is commenced.

Citibank’s attorneys had argued they were the holder of the note. However, their legal submissions did not state they also were the holder of the mortgage.

Motion to Dismiss Case Granted

Judge Gonzalez found that there was no proof submitted by Citibank they were the holder of both the mortgage and the note at the time of the initiation of the lawsuit. The court therefore granted McCray’s motion to dismiss. Judge Gonzalez found that Citibank did not submit adequate proof it had the right to the debt in the absence of documentation of chain of custody and proof the mortgage and notes were lawfully assigned and held by it prior to commencing the lawsuit. Since Citibank did not establish and meet the requirements they had standing to bring the foreclosure lawsuit, Judge Gonzalez held that they did not have standing to foreclose and their foreclosure lawsuit was dismissed.

Conclusion

Before a financial institution can bring a foreclosure lawsuit they must be able to prove that they are the holder of both the note and mortgage. In addition, they must show that the mortgage has been rightfully assigned to them and the assignment was properly filed. The documentation of the assignment, the possession of both the note and the mortgage, should be attached to the summons and complaint in the foreclosure legal action. If the financial institution does not do this, the court should dismiss the case for lack of standing.

Elliot S. Schlissel is a foreclosure defense attorney. His office has helped homeowners in scores of cases fight foreclosures and remain in their homes.

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

New Mortgage Rules: Too Little, Too Late!

January 2, 2014 by Elliot S. Schlissel

A new agency called the Consumer Financial Protection Bureau has been established. The purpose of this agency is to see to it we do not end up in another real estate bubble related to improper, unfair and illegal mortgage practices by financial institutions.

Owning one’s home is the American dream. The process of purchasing a home involves applying for a mortgage. Mortgage brokers and loan officers at banks seek to simplify this process. However, applying for a mortgage loan is generally the largest financial transaction a family enters into. The Consumer Financial Protection Bureau is set up pursuant to the Dodd-Frank financial reform law. New applications and forms are created by this statute. They are supposed to be in simplified, easy to read, and involve complete disclosure.

Financial institutions are supposed to clearly provide individuals applying for the mortgage with information concerning the actual cost of the loan. The principal amount. The amount of interest they are being charged and what they will spend in closing costs. The forms must also contain information concerning other aspects of the financial transaction including but not limited to whether there will be prepayment penalties and other costs related to the financing. The new law goes a long way to simplifying and clarifying this process for prospective home buyers. However, it does not go far enough.

Failure of the New Mortgage Rules

What the new forms do not do is provide the prospective homeowner with a logical basis to compare loan products from different financial institutions. The new loan forms do not include various costs related to the purchase of a home. Some of the costs these forms do not deal with are title insurance, closing expenses related to taxes, fuel oil costs to heat the house, and attorneys fees for hiring an attorney for legal representation.

No Three Day Right to Review

The Consumer Financial Protection Bureau had initially requested that all financial institutions be required to give the mortgagors a three day right to review the information whenever loan terms concerning the transaction are changed or modified. Unfortunately, this rule was not established. Lenders still have the ability to present the mortgagors, at the time of the closing, with changes in the cost structure of the financing. This is both unfair and unreasonable. You have homeowners sitting at the table at their closing expecting to pay one amount for the financing of their home and being told at the last minute, it is going to cost you more. They are too deep into the transaction to walk away. They are stuck with a higher cost of their mortgage. This is true even if the higher costs are beyond their ability to pay. Lenders should be forced to live up to the terms of their proposals when they offer prospective homeowners mortgages. They should not be allowed to change the terms at the last minute to the prospective homeowners detriment.

The establishment of the Consumer Financial Protection Bureau under the Dodd-Frank financial reform law was a great idea. Unfortunately, this great idea has not worked out completely to consumer’s benefit.

Elliot S. Schlissel is a foreclosure defense lawyer with more than 45 years of legal experience. He litigates foreclosure lawsuits throughout the Metropolitan New York area. He keeps families in their homes and helps them obtain mortgage modifications.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure attorney, foreclosure crisis, foreclosure defense, foreclosure defense lawyers, mortgage modifications, New York foreclosure attorney, New York foreclosure defense lawyers

Stopping Foreclosure in Its Tracks

December 27, 2013 by Elliot S. Schlissel

Times are tough in New York right now. Many businesses have downsized their employees. This has caused layoffs. It is harder to make a living in New York today than it was in earlier decades. Financial difficulties can cause stress. The ultimate problem consumers face is when they receive notice the bank is going to foreclose on their home and put them on the street. Receiving notice your home is going into foreclosure can be deflating. However help exists.

You can take legal action to stop foreclosures from moving forward in New York. You do not have to surrender to the financial institutions and be forced out of your home at a time when your credit is at its lowest point. Hiring an experienced, dedicated foreclosure attorney can make the difference between continuing to live in your home and being forced out of it.

There are numerous steps a foreclosure defense lawyer can take to help homeowners. Forbearance agreements can be negotiated. Mortgage modifications can be submitted. Mortgage modifications can sometimes reduce the principal, provide lower interest rates and more flexible terms. Some lenders are willing to defer significant portions of the mortgage indebtedness to later points in time. When applying for a mortgage modification, it is important the homeowner show financial difficulties. Mortgage modifications are designed to help homeowners who are in distress. Our foreclosure defense lawyers can counsel you with regard to the best route to take with regard to mortgage modifications.

Federal House Authority (FHA) Mortgages

There are special programs set up by the Federal House Administration with regard to homeowners who lose their jobs and have financial difficulties paying their mortgages. The program for unemployed homeowners can excuse the homeowner from paying their mortgage for a period of up to one year. During this period of time, the bank will be unable to foreclose. Our foreclosure attorneys can help you prepare the necessary paperwork and make the application to participate in this program. We can also intercede with regard to the bank or financial institution to help you deal with your current financial difficulties.

Foreclosure Court Proceedings

Foreclosure lawsuits are started by the service of a Summons and Complaint by the financial institution’s attorneys on the homeowner. When a homeowner receives a Summons and Complaint they have between twenty and thirty days to take action to stop the foreclosure in its tracks. Our law firm, when defending a homeowner, immediately files between eighteen and twenty five affirmative defenses. We also regularly countersue (sue the bank) as part of the lawsuit. The squeaky wheel gets more grease is an expression. We stand out from the crowd when defending our clients in foreclosure lawsuits. We pressure the financial institutions to make mortgage modifications and/or withdraw their lawsuits. Legal action can be taken to tie the cases up in court any where from three to six years in the Metropolitan New York area.

In Foreclosure? Do Not Despair

The worst thing you can do if your bank threatens to sue you in foreclosure or serves a Summons and Complaint upon you is to do nothing! If you take no action to defend yourself in the court by submitting a written answer to the bank’s lawyer and to the court, you default. By defaulting, you give the financial institution a win. It is like lying down to die. Don’t do it.

If you are facing foreclosure, call us. We will offer you a free consultation. We will provide you with a road map as to what we can do to keep you in your home and defend you in the foreclosure lawsuit. We will give you a written itemized retainer which shows what we will charge you, the basis of our charges, and what we can do for you. Help exists. God helps those who help themselves. If you have foreclosure problems, call us. We are the law firm that can help you. The phones at our law office are monitored 24 hours a day, 7 days a week. We can be reached at 1-800-344-6431, 718-350-2802 or 516-561-6645.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: financial crisis, foreclosure, foreclosure attorney, foreclosure crisis, foreclosure proceedings, mortgage modification, Mortgage Modifications attorney, New York foreclosure defense lawyers

Town of Brookhaven Taking Action Against Banks Who Failed to Maintain Foreclosed Properties

December 18, 2013 by Elliot S. Schlissel

Town officials in Brookhaven are moving forward to take action against financial institutions which have failed to maintain hundreds of homes and other structures they have taken title to in foreclosure lawsuits. During the past twelve months, town workers have been forced to board up more than three hundred homes that have fallen into disrepair which are owned by financial institutions as a result of foreclosure proceedings. Town of Brookhaven Supervisor Edward P. Romaine, recently stated “banks let the houses fall apart; did not adequately maintain them and didn’t stay in touch with the local government.”

Foreclosed Homes Devalue Their Neighbors’ Property

It is estimated when a home goes into foreclosure and falls into disrepair it has a negative financial impact on the surrounding homes of approximately $10,000 to $20,000. In addition, vacant homes attract drug dealers and prostitutes.

Property Registration Law

The Town of Brookhaven is in the process of passing a property registration law related to vacant homes. The statute would have a registration fee of $100 for a home or building which has been vacant for less than a year. The failure of financial institutions to comply with this regulation would cost them between $1,000 and $15,000 in fines. The statute would also allow the Town of Brookhaven to place liens on vacant homes and buildings for maintenance work the Town is forced to do. This maintenance work would also include maintaining the property, cutting the grass and trimming trees.

Councilwoman Jane Bonner from Coram has taken the position banks should be held accountable for homes they have taken back in foreclosure. She maintains a strong position it is not the government’s responsibility to maintain property owned by financial institutions.

Conclusion

Foreclosures not only remove families from their homes. They have a negative effect on the surrounding homes and create blights in the neighborhood if the foreclosed homes are not maintained.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, New York foreclosure attorney, real estate, real estate market

Courts Flooded with New Foreclosure Cases in New York

December 12, 2013 by Elliot S. Schlissel

It is estimated approximately 45,000 foreclosure cases will be filed in the Supreme Courts of the State of New York in 2013. It is anticipated more foreclosures will be filed in 2013 than in 2011 and 2012 combined in Courts.

The increase in court filings relates to lenders’ ability to provide documentation of their foreclosure lawsuits concerning the accuracy of the foreclosure filings. There was an affirmation requirement imposed by Chief Judge Jonathan Lippman in October 2010, requiring attorneys for financial institutions bringing foreclosure proceedings to attest to the validity of the material in the foreclosure Complaint. On August 30, 2013, a “Certificate of Merit” replaced the attorney’s affirmation. The Certificate of Merit requires the financial institution and its attorneys to document the institution bringing the lawsuit has the mortgage and note and can document the assignments of the mortgage and note from prior financial institutions to them.

Foreclosure Settlement Conferences

Each foreclosure proceeding in the State of New York is subject to a Foreclosure Settlement Conference. More and more homeowners are retaining attorneys to represent them in foreclosure proceedings in New York. Homeowners are utilizing foreclosure lawyers to represent them at the Foreclosure Conferences for the purpose of pressuring financial institutions into granting the homeowners mortgage modifications. It is estimated there will be more than 100,000 Foreclosure Settlement Conferences taking place in the State of New York before the end of the year 2013. The huge number of settlement conferences is causing the legal system in New York to be overburdened.

Approximately half of the homeowners represent themselves at the settlement conferences. Unfortunately, most homeowners representing themselves have difficulties at the settlement conferences and do not obtain good outcomes. Legal representation has a significant impact on the success rate of resolving the foreclosure lawsuits to the homeowners’ benefit.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, defective mortgages, foreclosure, foreclosure attorney, mortgage modification denial, New York foreclosure attorney

New York’s New Mortgage Proposal

Squatters Rights to Foreclosed, Vacant Homes

Negotiations with Bank Does Not Stop Foreclosure Lawsuit

Mortgage Lender Penalized for Failure to Comply with Notice Requirements

Foreclosure Court Conference Denied

Foreclosure Dismissed – Citibank Has No Standing

New Mortgage Rules: Too Little, Too Late!

Stopping Foreclosure in Its Tracks

Town of Brookhaven Taking Action Against Banks Who Failed to Maintain Foreclosed Properties

Courts Flooded with New Foreclosure Cases in New York

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