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Mortgage Modifications

Mortgage ModificationsAs 2008 came to an end the stock market took a plunge. The economy in the United States seemed to have slowed down. This has caused more homeowners to fall behind on making their mortgage payments. When a homeowner cannot make their payments under their mortgage affirmative action can be taken to deal with the situation prior to the home going into foreclosure. One of the better actions a homeowner can take is to apply for a mortgage modification. Since 2008 millions of homeowners in the United States have applied for mortgage modification. A mortgage loan modification can be the answer to homeowners’ financial issues in many situations.

The Modification

A loan modification basically seeks to change the terms of the original loan in a manner that makes it easier, less expensive and more convenient for the homeowners to make their mortgage payments. The granting of a loan modification by the lending institution may stop the home from going into foreclosure and being lost. If the bank approves the mortgage modification, there is usually a period of 3 months to 6 months when the homeowners receives a temporary modification. If they make their payments on time they are usually offered a permanent loan modification.

schlissel-headshotElliot S. Schlissel, Esq. is a foreclosure attorney. He helps homeowners obtain mortgage modifications and fights foreclosure lawsuits. He has been helping homeowners keep their homes throughout the Metropolitan New York area for more than 3 decades. He can be reached at 800-344-6431 or e-mailed at: Elliot@sdnylaw.com for a consultation. If you have a problem with your mortgage you should contact Elliot for a free consultation.

Banks Acting in Bad Faith

mortgage modification attorneysIn the case of Federal National Mortgage Association v. Singer, Index No. 850039/2011, Justice Moulton sitting in a Supreme Court Foreclosure Part in New York County, ruled the two banks involved should forfeit more than $100,000 in interest on loans to Mr. & Mrs. Singer. This was a sanction for the failure of the banks to act in good faith with regard to negotiating a mortgage modification with the Singers.

History of the Case

In 2004, the Singers bought two apartments in Manhattan which were next to each other. They gutted and renovated the apartments. When they purchased each of the apartments they took out a separate mortgage on each of the two apartments. After the apartments were renovated, New York taxed the two apartments as a single residence. In 2008, the Singers had a downturn in their income. They used all of their savings to try to keep up with the mortgage payments, taxes, common charges, and expenses which totaled in excess of $5,000 per month. The mortgages totaled more than $500,000 and had interest rates of 7.4% and 6.75%.

Mortgage Consolidation

Mrs. Singer, on numerous occasions, tried to consolidate the two mortgages at a lower interest rate. Initially, she applied to Countrywide, the original lender on the mortgages. Countrywide refused to extend the term or lower the interest rates on the mortgage. Countrywide took the position the Singers did not qualify as distressed borrowers. Their monthly payment on each loan did not exceed 31% of their combined monthly income. In response to this argument Judge Moulton said the bank’s analysis “resulted in an absurd result.” He said this was symptomatic of “many of the faults that plague the current system of refinancing residential property that is in default and/or in foreclosure.”

The loans were eventually sold to Bank of America and the Federal National Mortgage Association (Fannie Mae). Approximately a year and a half later a foreclosure lawsuit was initiated. The Singers again applied for a loan modification. Five months later their modification request was denied. The Singers also offered to pay $18,000 in accumulated interest as part of the loan modification.

Counsel for the Singers had on various occasions suggested balloon mortgages. These mortgages enable residents to make their mortgage payments and help the banks to receive the total amount due and owing to them. This is especially true in light of the fact the apartments owned by the Singers were worth substantially more than the $500,000 in combined mortgages.

Settlement Court Conference

The Singers had attended 5 court settlement conferences. At each of these conferences both Bank of America and Fannie Mae refused to meaningfully negotiate mortgage modifications.

Conclusion

Banks who do not cooperate in negotiating mortgage modifications in good faith can be punished by the courts.New York foreclosure defense lawyer

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

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

4 Million HAMP Mortgage Modifications Turned Down by Banks

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

Incomplete Mortgage Modification Applications?

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

HAMP Applications Rejected Without Just Cause

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

Wrongful Denial of Mortgage Modifications

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

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

Conclusion

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

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

Mortgage Modifications

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

http://youtu.be/PY8ARn7m9nw

Elliot S. Schlissel is a foreclosure defense lawyer in the Metropolitan New York area.  He has been helping homeowners stay in their homes for more than 20 years.  Elliot and his associates help their clients obtain mortgage modifications and defend foreclosure lawsuits.  Elliot can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

Mortgage Modifications for Second Mortgages

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

http://youtu.be/2aXQzrC2Dkk

Elliot S. Schlissel is a foreclosure defense attorney.  He and his associates have been representing homeowners for more than 20 years.  Elliot represents homeowners throughout all phases of foreclosure litigation, at foreclosure settlement court conferences and helps his clients obtain mortgage modifications.  He can be reached at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.  Contact the office for a free consultation.

Missing Mortgage Payments

assistance for homeownersIt is common for homeowners on occasion to fall a month or two behind in paying their mortgages. Banks will usually not take any action in these situations. However, if you should fall three or more months behind on your mortgage payments, the bank who holds your mortgage may refuse to accept your mortgage payments in the future unless you pay the total amount of the arrears you owe including late charges and penalties. This is called accelerating the mortgage.

Notices By Banks

Banks will usually provide you with a late notice when you don’t make your mortgage payments. They also may send a letter to you describing options you have with regard to mortgage modifications, deeds in lieu of foreclosure, and short sales.

Negotiations With Lenders

If you are behind on your mortgage, it is recommended you try to negotiate with your lender. Your lender may be willing to enter into a forbearance agreement with you. Forbearance agreements are sometimes given to homeowners when they become disabled or when they suffer a temporary loss of employment. The attorneys at the Law Offices of Schlissel DeCorpo have extensive experience in negotiating with lenders for alternative remedies to be utilized by banks instead of foreclosure proceedings.

If you have a continued inability to make your mortgage payments you may receive a notice of default correspondence from your financial institution. Eventually you will be sent a letter by your lender giving you 90 days notice prior to the start of a foreclosure lawsuit. If you haven’t hired an attorney by this time, it is strongly suggested you hire a foreclosure defense lawyer when you receive this correspondence. The purpose of this letter is to give you one last opportunity to bring your mortgage current by making all back payments before you get served with a foreclosure Summons and Complaint. The foreclosure lawsuit will not start for at least 90 days. This gives you several months to try to rectify the situation with your financial institution.

Foreclosure Lawsuits

After receiving the 90 day notice, the lender may not actually sue you in 90 days. The lender may take several more months to obtain the necessary documentation and paperwork before initiating the foreclosure proceeding.

Bankruptcies

In some situations, filing either a Chapter 7 bankruptcy or Chapter 13 bankruptcy can be helpful to deal with your financial difficulties which put you into foreclosure. The Chapter 7 bankruptcy will eliminate all of your debts including your mortgage obligation. In a Chapter 13 bankruptcy you can catch up on your arrears over a 5 year period while making your current mortgage payments. Unfortunately, if you couldn’t afford your mortgage payments to begin with the Chapter 13 bankruptcy won’t work for you.

Experienced Foreclosure Defense Lawyers

The attorneys at the Law Offices of Schlissel DeCorpo have helped numerous New Yorkers stay in their homes, fight foreclosures and obtain mortgage modifications. Should you fall behind on your mortgage, give us a call and we will set up a free consultation to set up a specific plan to protect you and your family from being forced from your home.foreclosure defense lawyer in New York

Foreclosure Defense Facts: Keeping Your Home When Facing Foreclosure – Part II

foreclosure defense attorneys for homeownersDo I Need A Lawyer To Help Me Litigate The Foreclosure Case?

The answer to this question is yes. In theory you can submit an Answer and represent yourself. However the law firm representing the bank usually brings hundreds of lawsuits against consumers. They usually have an expertise in foreclosing on homes and having the homes sold at auction on the courthouse steps. If you do not hire a lawyer, you will find yourself in an extremely disadvantaged situation. You will not understand the laws, the court rules, and the procedures involved in fighting a foreclosure case. Retaining a law firm who has fought hundreds of cases and has a successful record such as our law firm puts you in the best situation to keep your home, obtain a mortgage modification, and/or get the foreclosure lawsuit dismissed.

You Can Obtain A Mortgage Modification

You will have the opportunity to modify your mortgage under the auspices of the mandatory mortgage modification conference. New York requires, in all foreclosure lawsuits, a mandatory settlement conference on residential mortgage foreclosure cases. At the foreclosure settlement conference you will have an opportunity to apply for a mortgage modification. Even if you have already been turned down, you can apply for another mortgage modification under the supervision of the referees in the mandatory foreclosure settlement conference part in the courthouse.helping homeowners stay in their homes

Tips to Avoid Foreclosure

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

http://youtu.be/VEakIsUsJfk

Elliot Schlissel is a foreclosure defense lawyer.  He has been helping homeowners stay in their homes for more than 20 years.  He can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

The Truth Behind Many Refinancing Scams

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

http://youtu.be/DVkNvzzxzyY

Elliot S. Schlissel is a foreclosure defense attorney.  He has more than 35 years of experience representing homeowners in mortgage modifications and foreclosure proceedings.  He can be reached for consultation at 516-561-6645, 718-350-2802, 1-800-344-6431 or by email to schlissel.law@att.net.

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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