US Bank and Wells Fargo Violate Duty to Negotiate in Good Faith at Mandatory Foreclosure Settlement Conference

foreclosure defense lawyerJustice Robert Torres, sitting in Supreme Court in Bronx County, recently ruled US Bank and Wells Fargo were barred from collecting any interest, unpaid late fees or attorney’s fees until a homeowner was given an appropriate review and determination of his mortgage modification application. A foreclosure action was brought against a homeowner named Rodriguez in Bronx County.

Rodriguez brought an application to find that US Bank and the loan servicer on this mortgage, Wells Fargo Bank, had violated their duties and obligations under the HAMP guidelines to negotiate in good faith at a foreclosure settlement conference. Rodriguez took the position Wells Fargo mishandled and misapplied the HAMP guideline with regard to his application for a mortgage modification. He further argued both US Bank and the loan servicer, Wells Fargo, had failed to act in good faith as required by financial institutions under the HAMP program.

Court Rules Against the Banks

Justice Torres found that Rodriguez had provided sufficient documentation to his allegations concerning the violation of the good faith requirement by the financial institutions at the settlement conference. His decision stated in this foreclosure proceeding, the financial institutions did not follow HAMP guidelines such as violating section 3408(f) regarding the duty to proceed in good faith. The Court took into consideration the presentation by Rodriguez’s representative that Wells Fargo did not explain why they refused to evaluate him under Tier 1 and Tier 2 programs. Under the HAMP guidelines a loan servicer must evaluate the homeowner pursuant to these guidelines. Judge Torres’ ruling stated Wells Fargo had not complied with the current HAMP directive and failed to work towards a loan modification in good faith.

Conclusion

Financial institutions must cooperate and work with homeowners and evaluate mortgage modification applications pursuant to the HAMP guidelines.

helping homeowners stay in their homesElliot S. Schlissel is a foreclosure attorney representing homeowners in foreclosure lawsuits. His office seeks to keep their clients in their homes by helping them obtain mortgage modifications and by challenging the foreclosure lawsuits brought by financial institutions, and countersuing them for violating federal and state laws.

The Foreclosure Process in New York

foreclosure defense attorneysThe 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!assisting homeowners

Losing Your Home

forclosure defense attorneysWhen 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!homeowner advocates

Surging Foreclosures on Long Island

foreclosure defense attorneysAs the mortgage crisis is fading in many parts of the United States, it is still heating up on Long Island. More than 1,300 foreclosure cases have been filed in the first eight months of 2013. This is more than a 50% increase during the same eight month period of 2012. Foreclosures have been increasing on Long Island even while there have been significant drops in foreclosure proceedings brought in other areas of the country.

Darren Blomquist, the Vice President of RealtyTrac, recently stated “we’re definitely seeing the Long Island area buck the national trend when it comes to foreclosure activity.” Long Island has more than double the national average of mortgages that are significantly behind on their payments. In July of this year, more than eight percent of all homes in Suffolk County and six percent of all homes in Nassau County were either in foreclosure or moving towards being sued in a foreclosure proceeding.

Why Foreclosure Persists on Long Island

There are numerous reasons why Long Island has had a higher level of foreclosures than the rest of the country. The foreclosure process is long and drawn out in the State of New York. Long Island was an area that had more than the national average of high risk home mortgage loans. Long Islanders also lost many high paying jobs. The new jobs that have been created in the past few years on Long Island tend to be minimum wage or low wage positions.

Mortgage Modification Problems

Long Islanders are facing similar problems to homeowners in other states facing foreclosure. The mortgage modification process does not work well. There are approximately 45,000 homes facing foreclosure on Long Island. For those families, the recent rise in the sales price of homes is not helping them out of their financial difficulties.assistance for homeowners

What Do You Need to Know Before Buying a Home?

foreclosure defense attorneysWhen 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?

helping homeowners stay in their homesElliot S. Schlissel, Esq., for more than 20 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.

Wells Fargo Sanctioned By Court For Bad Foreclosure Practices

mortgage modification attorneysJustice Yvonne Lewis, sitting in Supreme Court in Kings County recently sanctioned Wells Fargo for “wantonly flagrant” bad faith involved in a residential foreclosure lawsuit. Justice Lewis in her decision stated that Wells Fargo had repeatedly frustrated the efforts by two brothers, Francis Ruggiero and Michael Ruggiero to obtain a mortgage modification. They continually demanded more and more financial information.

The Ruggiero brothers owned a home in East New York. They refinanced their home in 2006 with Wells Fargo. They fell behind in their mortgage in 2007. In May of 2007, Wells Fargo initiated a foreclosure action against them.

Court Settlement Conference

At a court settlement conference, the parties agreed to a three month trial mortgage modification. The Ruggerio’s made the first payment under the modification and then missed the next two. At subsequent settlement conferences, the Ruggerio’s claimed they had not been given a trial mortgage modification. Wells Fargo claimed they needed more information for a final determination on their mortgage modification for the Ruggerio’s. Wells Fargo, at the foreclosure conference, requested the Ruggiero’s make further payments under the temporary mortgage modification. However, every time the Ruggerio’s made the payments, they were rejected by Wells Fargo.

In the end, Wells Fargo denied the mortgage modification application. However they offered to modify the mortgage for $2,672.70 per month. This was $600 a month more than the amount under the trial modification by Wells Fargo.

There were further additional settlement conferences before the court. The Ruggiero’s submitted a further package of financial information to Wells Fargo but Wells Fargo took no action concerning this new information. Eventually, Wells Fargo said it would not offer a loan modification, but would reconsider if the Ruggiero’s again submitted a financial package. In the end Wells Fargo never approved a mortgage modification for the Ruggiero’s.

Lack Of Good Faith By Wells Fargo

Judge Lewis in her ruling stated the case is “replete with pervasive indicia of the plaintiffs lack of good faith, evidenced by conflicting information, a refusal to honor agreements, unexcused delays, unexplained charges and misrepresentations and sets forth, in no small measure, a failure to deal honestly, fairly and openly.” The Judge went on to state, “more to the point, it is irrefutable on the proof adduced that the defendants, despite being subjected to ten to twelve arbitrary submissions, successfully established their occupancy of the subject premises, successfully completed the plaintiff’s trial HAMP period, and submitted all required documentation in order to accord themselves a modified loan agreement in the amount of $2,061.50 which the plaintiff in turn, arbitrarily and capriciously increased by $611.20 under false pretenses without any justifiable basis, and ingenuously denied.”

Justice Lewis went on to state that the monetary penalty’s she was imposing on Wells Fargo was necessary because of Wells Fargo failure to comply with the HAMP program.foreclosure advocate for homeowners

City Seeks To Save Homes Through Eminent Domain

mortgage modification lawyerThe City of Richmond, California has come up with a unique plan. The city sent notices to the institutions holding more than 600 underwater mortgages. The city asked these institutions to sell the mortgages to the city. The city offered to buy the mortgages for 80% of the fair market value of the homes. The City intended on writing down the mortgages for the purpose of helping the homeowners refinance their properties.

Investment Group Brings Lawsuit To Stop The City

An investment group filed a lawsuit in a Federal Court in California. They seek to prevent the City from using Eminent Domain to seize mortgages of local residents who owe more than the value of their property. The investment group claimed “the purpose of the lawsuit is to protect retirees and save them from an unlawful and unconstitutional seizure of private property and to prevent severe damage to the country’s home mortgage market.” The investment group requested the court stop Richmond, California from moving forward with its program and to declare its plan to seize mortgages as being unconstitutional. The City of Richmond claimed the lawsuit is without merit and their plan is appropriate.

Since the case is in its infancy, we’ll see how things work out in the future. However if the city is willing to seize its resident’s underwater mortgages, make a deal with the institutions holding those mortgages to pay them a fair amount for the mortgages and thereafter the homeowner’s refinance their homes for a lesser amount, it looks like a win-win situation for all parties involved.

Foreclosure Defense Lawyer

assistance for homeownersElliot S. Schlissel, Esq. is a prominent foreclosure lawyer representing homeowner’s against financial institutions throughout the metropolitan New York area. Elliot and his associates aggressively litigate foreclosure lawsuits and assist their clients in obtaining mortgage modifications.

Part II: Other Financial Institutions Deny Mortgage Modifications For Fictitious Reasons

foreclosure defense attorneyChris Wyatt, who had previously worked for Goldman Sacks subsidiary, Litton Loan Servicing, claimed the company occasionally conducted “denial sweeps.” The purpose of the denial sweep was to reduce the backlog of pending applications for mortgage modifications. In these cases, the mortgage modifications were also denied for fictitious reasons.

The Bank of America employees claimed their supervisors encouraged them to provide false information to homeowners. Simone Gordon stated “we were told to lie to customers and claim that Bank Of America had not received documents it had requested.” “We were told that admitting that the bank received documents would open a can of worms.” She claimed the problem that would occur is that the bank would look to be deficient in its underwriting of mortgage modifications.

These mortgage modification applications were supposed to be underwritten within 30 days. The Bank did not have the appropriate staffing to handle the volume of modifications. It was simply easier to just deny them and make up a reason. Simone Gordon worked for Bank of America from 2007 to 2012 as a senior collector. Simone further advised the court that homeowners who were anxious to find out the status of their mortgage modification applications were told their applications were “under review.” They were told this even though nothing had been done for many months with regard to the processing of their applications. In some situations, the homeowners were told their mortgage modification applications were under review when they had already been denied.

Employee’s Rewarded For Denying Mortgages

Simone Gordon’s affidavit states the employees of Bank of America were rewarded when they denied applications and sent the homeowner’s homes to be foreclosed upon. She stated that collectors “who placed ten or more accounts into foreclosure in a given month received a $500 bonus.” There were additional incentives given to employees. They received gift cards to retail stores and restaurants.foreclosure advocate for homeowners

Part I: Bank of America Employees Lied To Homeowners

mortgage modification attorneysIn a lawsuit filed against Bank of America, six former Bank of America employees and one outside contractor working for Bank of America, filed affidavits with the court, claiming they regularly lied to homeowner’s seeking mortgage loan modifications. The mortgage modifications were denied for made up reasons. These employees were rewarded for denying mortgage modifications and putting the homes into foreclosure. The lawsuit is pending in a United States District Court in Boston, Massachusetts. It is part of a class action brought on behalf of homeowner’s who were trying to avoid foreclosures on their homes pursuant to the governments Home Affordable Modification Program (HAMP).

Bank Of America Denies The Allegations

Bank of America has given a statement through a spokesperson. The statement indicated the affidavits of the employees were “rife with factual inconsistencies.” Bank of America claims to have modified more loans than any other bank in the country.

William Wilson, Jr., who worked as an underwriter for Bank of America and as a manager between the years 2010 and 2012 stated homeowners had to submit documentation of financial information with their mortgage modification applications. Wilson stated that twice a month, the bank required all files that were more than 60 days old had to be denied. This was called “a blitz.” During this period, one team would deny between 600 and 1500 mortgage modification applications all at the same time.

The manner in which the employees justified the turning down of these mortgages was to create fictitious reasons for these mortgage denials. The most common fictitious reason for denying the mortgage was claiming the homeowner had not sent in the appropriate financial documents requested by Bank of America. The Bank of America employees claimed these financial documents were not sent in when the documents were right in front of them!

Erica Brown, a former Bank of America employee, has made statements indicating “Bank of America’s practice was to string homeowners along with no apparent intention of providing the permanent loan modification it promises.” Bank of America and its executives should be subject to criminal investigations with regard to their actions under the HAMP program.assistance for homeowners

Increased mortgage modifications have scaled foreclosure down

foreclosure defense lawyerThe rate of mortgage modifications has taken an upward turn again to relieve homeowners from foreclosure. As per the recent statistics, during April to June this year, around 204,000 homeowners have already qualified for permanent loan modification. Among all, nearly 160,000 homeowners have obtained proprietary loan modification and 44,860 homeowners have been able to modify mortgage loans by using the Home Affordable Modification Program or HAMP. Numerous mortgage servicers have assisted homeowners thoroughly in mortgage modifications and made it possible to achieve this mark in just 3 months.

As the data suggests, since 2007, the situation has taken a positive turn. More than 6.52 million permanent loan modifications have been completed successfully. Among the 6.52 million, 5.31 million loans are under the proprietary programs and approximately 1,223,449 modifications are under the HAMP. The development is great indeed and it’s expected that by next few years it’ll be possible to control the foreclosure effectively enough.

The steady increase in mortgage modification has already reduced the number of short sales and foreclosure in the course of time. In the second quarter of this year, around 329,000 foreclosures have been recorded. This is lower than the previous quarter which encountered 472,000 foreclosures. There is a considerable 30% drop in the foreclosure count. In 2012, during the second quarter, 527,000 foreclosures took place. So, in one year the total number of foreclosure has dropped by 38%. Not only foreclosure, but there is a reduction in short sales also. In the second quarter, total 81,000 short sales have been recorded which is lower enough in comparison to the last quarters’ 84,000 count. So, short sales have also reduced by 3%. In 2012, 107,000 short sales were completed.

During the first quarter of 2013, 162,000 foreclosures were completed. After increased number of mortgage modifications, the number of foreclosure was 158,000 in the second quarter. There is a 2% reduction in the overall count since last quarter. Exactly one year ago, in the second quarter of 2012, around 185,000 foreclosures were completed. So, in one year, there is a huge reduction of 15% in foreclosure count.
Short sales have reduced by 25% and foreclosure around 15% in the last one year. If you’ll evaluate the numbers according to months, then you’ll be able to detect the gradual change. In May 2013, almost 115,000 foreclosures were recorded. In June the number came down to 97,000, a 16% reduction. There is a 7% reduction in number of short sales also.

All the surveys and their results are indicating to a positive change in the mortgage market. The number of mortgage delinquencies are reducing as per the records but there is perhaps more to check than just figures. Market experts are however hopeful about the whole progress. The vice president of RealtyTrac, Daren Blomquist has stated that marketers are trying their level best to find a way through the numerous bad loans and assist troubled homeowners accordingly. Apart from that, the property prices are also going low now. The curtailed property prices have made it possible for the troubled homeowners to save their homes through mortgage modification.

Blomquist also added, “Lastly, the persistent foreclosure prevention efforts over the past few years have waged a war of attrition on the foreclosure problem, helping to keep a lid on foreclosure activity”. The positive decline in the foreclosure count has definitely made the things more favorable for the homeowners. However, it’s difficult to assume that for how long the situation will be favorable for the homeowners. It’s essential for homeowners to be alert and make the most of the favorable market condition.

Anjelica Cullin, Financial Writer

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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