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

foreclosure defense attorney on Long IslandYour Loan Modification Was Denied!

This is not the end of the world. To start with, even if your loan modification was approved, they may not have modified your loan to the point where you can afford to make the payments. If your loan modification is denied, you must litigate the foreclosure lawsuit. After submitting an Answer with affirmative defenses and countersuing the bank, you have an opportunity to make discovery demands upon the bank. You can request documents, financial records and other information from the bank with regard to the processes, procedures and what was involved in initiating the mortgage, having the financial documents moved from one bank to another, and bank policies and procedures. This will give you more information with regard to defending your lawsuit.

Banks can be sued within their foreclosure proceedings. This is called countersuing the bank. In the foreclosure lawsuit, the bank must present testimony and documentary evidence to support their claims. It is not uncommon for litigated foreclosure lawsuits to take three to five years to get through the court system.

Does Foreclosure Mean You Are Losing Your Home?

The answer to this is no! The foreclosure lawsuit is the start of a process by a financial institution to take back the home. If proper Answers with affirmative defenses and counterclaims are filed and discovery demands are made, the banks can be put on the defensive. No one is going to show up at your house and force you out into the street. The purpose of the foreclosure proceeding is for the bank to obtain a court order to sell your home. This is not an easy process. It takes a long time to get through the legal system. Using an experienced foreclosure defense lawyer can give you the security of knowing you will not be forced out of your home in the short run. Before a bank can take your home, they must get through your foreclosure defense law firm. I can tell you this is not an easy thing to do if you are represented by the right lawyer.assisting homeowners on Long Island

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

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

Should You Buy A Foreclosed Property?

In foreclosure situations the bank brings a foreclosure action against a home owner.  Sometimes, after many years, the bank successfully takes title of the home. They evict the family who lived in the home.  There can be significant financial benefits from buying a foreclosed home.  However, there are also a variety of potential drawbacks.

Was The Home Properly Maintained?

If a homeowner was unable to make his or her mortgage payments there is a substantial possibility that the home was not maintained very well.  Homeowners who can’t make mortgage payments don’t improve their homes and often don’t fix things that break.  There is also the possibility that the homeowner, when he was being evicted, engaged in malicious conduct damaging the home.

The following is a list of things you should look for before purchasing a foreclosed home:

  1. Is the home neat and clean? Sometimes bank foreclosed homes have been sitting empty for long periods of time.  No maintenance or cleaning has been done and the houses have fallen into disrepair.
  2. Is the home legal? Sometimes homeowners modify, extend, and change their homes without getting the appropriate approval from their local building departments.  This makes title unmarketable.  In the foreclosure process whether the title is marketable or not does not come up.  However if you buy the home and thereafter you decide to sell it you will be responsible for legalizing the home.  This can involve thousands of dollars of modifications, application fees and legal work.
  3. Has the home lost electricity? If the home was vacant for a long period of time and the electricity was cut off this can have a negative impact on the electrical appliances in the house.
  4. Water damage. If there have been leaks in the home while it was empty it is possible that the home has suffered from water damage.
  5. Low quality upgrades to the house or poorly done repairs. Sometimes the homeowners are short on money, they take short cuts when the upgrade, modify or repair their homes.  The expression “A stitch in time saves nine” may apply in these cases.  These poorly done upgrades or repairs may not last very long.
  6. Overgrown property.  Homeowners who can’t afford to maintain their homes often fail to maintain their yards and lawns.  The property may be overgrown and/or may require extensive landscaping.
  7. Vandals.  Homes that are empty have a higher propensity to be vandalized than homes that are occupied residences.  Vandalism can involve individuals breaking in to homes, breaking windows, damaging walls, and removing pipes in the basement to sell the copper or brass.

Although there are bargains to be had in buying foreclosures, be careful!  You should carefully inspect the home before purchasing it.  It is suggested that, you have an engineer write an engineering report on your home before buying a foreclosure.  The price may be cheap on a foreclosed home but the real question is have you bought a bargain or a money pit!

Summer Home Buying Season, the Worst in Five Decades

home1Spring of each year starts the home buying season. The months of April through the end of August signals the time that most home buyers come into the market. This is usually a time of heightened activity in the real estate market for the sale of single family homes. This was not true, however, in the year 2011. From the period of April through the end of August of 2011, fewer homes were sold in the United States during any six month period in the last fifty years. Home sales from the Spring and Summer were the weakest since 1963. This is an indication of how poor the real estate market and the economy in the United States is doing.

Low Mortgage Rates

Mortgage rates reached their lowest levels since records were kept during the Summer months. However, even with record low mortgage rates and home prices continuing to go down, would-be buyers are still not being enticed. Approximately one hundred and seventy thousand homes were sold from March through August of this year. This is even less than was sold in the same period in 2010, which, up until that time, was the worst in a half a decade. Normally, approximately four hundred thousand homes would sell during this period of time.

Home Prices Falling

The medium price for the sale of existing homes fell to approximately $168,000. This was decreased in 5% from the prior year. New home prices averaged about $209,000, which was almost 8% less than the prior year. Low priced foreclosure sales and short sales have been driving the market down. This causes real estate brokers to press sellers to lower their prices on their homes to compete with these foreclosures and short sale homes. It is estimated that homes in foreclosure and short sales sell for 20% less than their market value. This has the impact of lowering home prices throughout the areas where the short sales and foreclosures are located.

Is the single family home becoming a depreciating asset? Is the American dream over? I don’t think so. However, we may be headed for an additional five years of flat real estate prices before we see a significant rebound

Bankruptcy can act as an escape valve to prevent the loss of a home, stop foreclosure, eliminate a second mortgage and stop debt collection harassment. Your credit can be re-established after filing either a Chapter 7 or a Chapter 13 bankruptcy One bankruptcy myth is that you will never receive credit again after filing bankruptcy. This is simply untrue.

Bankruptcy Lawyers

Should you have questions or issues concerning your financial situation or are considering filing for bankruptcy, feel free to call the Law Offices of Schlissel DeCorpo. We’ve been helping our clients for more than 30 years deal with foreclosure defense and bankruptcy matters. We can be reached at 1-80–344-6431, 516-561-6645 or 718-350- 2802.

Falling Home Prices Wreaking Havoc on the Economy

Falling Home Prices WreakingEconomists in the United States are taking the position that falling home prices are a significant problem preventing the economic recovery in the United States. The devaluation of homes in the United States has cost Americans billions of dollars. The declining wealth of American homeowners has had a further negative impact on their confidence that the financial situation will improve in the future.

Richard Curtin, Professor of Economics at the University of Michigan, recently stated “people don’t expect their home to regain value, and that’s really lead to a change in consumer attitudes about the economy that we’ve just never seen before.”

Americans have a confidence problem in their future of their country. They no longer believe that the economy will necessarily improve and financial circumstances will get better. The average income of many American families has declined. The unemployment rate is still over 9%. The expectations for economic growth among Americans have fallen to one of the lowest levels in history.

The Decline of the Real Estate Market

Recent studies by economists have shown the decline in the real estate market affecting all aspects of consumer spending. It is estimated that Americans reduce their spending by $20-$70 a year for every $1,000 decline in the equity in their home. During times of appreciation in real estate, there was a “wealth effect.” The wealth effect made consumers feel that they had liquidity and, therefore, they spent more money. Often more than they actually had. The down side of the wealth effect is, as home values have declined, consumer confidence has declined and there has been a negative reduction in the wealth effect. In other words, consumers feel they’re getting poorer when their houses go down in value and are less inclined to spend money.

Economy Will Eventually Recover

The prevailing view among the economists is that even though things do not look good right now, the economy will eventually get better and Americans will start spending again. Hopefully, appreciating real estate prices will spearhead the economic recovery.

Foreclosure Lawyers

The foreclosure lawyers at the Law Offices of Schlissel DeCorpo can help you if you have a foreclosure problem. Our foreclosure defense lawyers litigate defective mortgages, defective foreclosure lawsuits, predatory lending and all other types of real estate related matters. We can explain the federal laws on foreclosure and how they affect you. We attend foreclosure court conferences for our clients.

In the appropriate situation, we will discuss foreclosure related bankruptcy issues, such as filing a Chapter 7 and a Chapter 13 bankruptcy with you. In bankruptcy situations, there is an automatic stay that goes into effect, ordered by the court, that stops foreclosure from moving forward. In some bankruptcy situations, we can eliminate second mortgages. At the end of the bankruptcy, we can assist you inre- establishing your credit. Feel free to set up a free consultation with us. We will discuss your foreclosure options with you.

Government Turning a Quarter Million Foreclosed Homes Into Rentals

Homes Into RentalsThe President is considering turning a quarter of a million homes taken over by government controlled agencies into rentals. Putting these homes on the market for sale will only further depress the real estate market. The Federal Housing Finance Agency would like to put 250,000 homes that are owned by Fannie Mae, Freddie Mac and the Federal Housing Administration on the market to be rented. These homes have been obtained by government agencies pursuant to foreclosure proceedings. Edward DeMarco, who is currently the acting director of the Federal Housing Agency, has stated that “renting these homes instead of selling them in foreclosure may reduce credit losses and help stabilize neighborhoods and home value.” It is estimated that homes placed on the market for sale in foreclosure sell for 20% less than their actual value.

Foreclosure Crisis Creates Demand In Rental Market

Since the housing crisis started, approximately three million former homeowners are now renting. This has reduced the inventory of homes available to be rented. Families that lose their homes in foreclosure have no choice but to rent. Their credit is ruined by the foreclosure proceedings, they generally have no money for a down payment and their only option is to rent. There are those who claim America is becoming a society of renters. The American dream of owning a single family home may become a broken dream. This dream emanated from the conclusion that owning a home would not only provide you with a stable place to live, but will allow you to develop equity. However, during a time of economic turmoil the value of single family homes has been going down. A home, instead of being a worthwhile investment in real estate for the past few years, has been a horrible investment. Single family homes have been declining in value for the last five years. It is estimated that it may be an additional five to ten years before single family homes start increasing in value. In a market where the value of real estate is going down, renting seems to be the logical choice. Why buy a home today that will be worth less in the future?

I think the Obama Administration is on the right track. I believe instead of foreclosing on homes and selling them at auction, the homes should be rented to prevent the continuing oversupply of homes to the real estate market. This will give the real estate market a greater opportunity to reach equilibrium between buyers and sellers. Down the road, when the real estate market recovers, the government can offer these homes to be sold to their renters or to other worthy individuals or families.

Foreclosure Defense Lawyers

Before your house falls into foreclosure, it is suggested you apply for a mortgage modification. If your mortgage modification program does not meet your needs, unfortunately your home may end up being foreclosed upon. Should you receive a Summons and Complaint in foreclosure, our law office can help you. We will attend foreclosure court conferences on your behalf and speak to the Judge about motivating your financial institution to give you a mortgage modification. We’ll also submit a formal written answer on your behalf. Defenses such as defective mortgages, predatory lending, defective foreclosure lawsuits and other real estate related legal defenses can be interposed on your behalf. Our law firm will use its extensive experience in handling these types of cases, to keep you in your home.

We will also discuss with you foreclosure related bankruptcy options. Filing a Chapter 7 or Chapter 13 bankruptcy may be the best route for you in dealing with your foreclosure situation. Why should you file bankruptcy and the types of bankruptcies available to you would be discussed upon your initial free consultation. Should you file bankruptcy you can sometimes eliminate second mortgages. Bankruptcy will stop foreclosure proceedings from moving forward and stop all debt collection activity against you. Call us for a free consultation.

We will discuss all of your foreclosure and bankruptcy options with you. Our phone numbers are 1-800-344-6431, 516-561-6645 or 718-350-2802. You’ve just visited the Elliot Schlissel, Esq. foreclosure blog.

NY Foreclosure Law Firm Fined Two Million Dollars

NY Foreclosure Law Firm Fined Two Million DollarsSteven J. Baum, P.C. of Amherst, New York, has been fined two million dollars for inappropriate foreclosure legal practices. Steven J. Baum, P.C. is the largest foreclosure law firm in the state of New York. Steven J. Baum, P.C. has agreed, in addition to paying the two million dollar fine, to re-vamp its practices with regard to the handling of pleadings, affidavits and mortgage assignments in New York State and Federal Courts.

The Law Firm has agreed to implement a variety of internal controls regarding its processing and handling of foreclosure proceedings. They have agreed to review original promissory notes received from their clients or custodians of the notes prior to filing new foreclosure lawsuits. These actions will bring the firm in compliance with the order issued by Chief Judge Jonathan Lipman regarding attorneys representing lending institutions.

Mortgage Foreclosure Proceedings

US Attorney Preet Bharara, from the Southern District of New York, stated, with regard to the settlement, “in mortgage foreclosure proceedings, there are no excuses for sloppy practices that could lead to someone mistakenly losing their home.” She stated further that “homeowners facing foreclosure cannot afford to have faulty paperwork or inadequate evidence submitted and today’s agreement will help minimize that risk.”

Baum Law Firm Released from Civil Liability

The Baum Law Firm, upon payment of the two million dollar fine and the imposition of new internal procedures, will be released from potential civil liability under the Financial Institutions Reform, Recovery and Enforcement Act of 1989. The Baum Law Firm acknowledges that it occasionally made inadvertent errors in its legal filings in state and federal courts, which it attributes to human error in light of the high volume of mortgages and foreclosures it handled throughout the State of New York in the wake of the national subprime mortgage crisis.”

It should be noted that this is a settlement. It is not a finding of wrongdoing by the Baum Foreclosure Law Firm. The Baum Law Firm has also agreed to have experienced attorneys supervising all aspects of the preparation of documents and reviewing of documents before they are filed with the courts. In addition, they are implementing a one to two-year training program for their attorneys to bring them in compliance with the rules regarding foreclosure proceedings in the state of New York.

Hopefully, this law firm will live up to its responsibilities in dealing with foreclosure proceedings. Taking a family’s home and putting them on the street is a sad end to the American dream. These proceedings should be handled in a manner that protects the homeowner’s rights and sees to it that homes aren’t wrongly foreclosed upon.

New York Foreclosure Defense Lawyers

The New York City and Long Island foreclosure defense lawyers at the Law Offices of Schlissel DeCorpo can help you if you have a foreclosure problem. Our foreclosure defense lawyers litigate defective mortgages, defective foreclosure lawsuits, predatory lending and all other types of real estate related matters. We can explain the federal laws on foreclosure and how they affect you. We attend foreclosure court conferences for our clients.

In the appropriate situation, we will discuss foreclosure related bankruptcy issues, such as filing a Chapter 7 and a Chapter 13 bankruptcy with you. In bankruptcy situations, there is an automatic stay that goes into effect, ordered by the court, that stops foreclosure from moving forward. In some bankruptcy situations, we can eliminate second mortgages. At the end of the bankruptcy, we can assist you inre- establishing your credit. Feel free to set up a free consultation with us. We will discuss your foreclosure options with you.

A Thousand Days to Foreclose a Home

There is an old expression that courts have two speeds, slow and backwards. In the State of New York, that is certainly true if you’re involved in foreclosureThousand Days to Foreclose a Home proceedings. It is estimated that it takes approximately a thousand days to bring a case from start to finish in both Nassau and Suffolk counties in New York. The delays in foreclosure proceedings are caused by the courts being overwhelmed by the unprecedented number of homes going into foreclosure. There are more than twenty thousand homes tied up in foreclosure proceedings in Nassau and Suffolk counties at the present time. The high level of foreclosures continues to depress the real estate markets on Long Island.

Foreclosure Court Conferences

New York State has a statute that requires a court conference on all new foreclosure proceedings. At the court conference, the Judges and attorneys look into possibility of avoiding foreclosure. Mortgage modifications and other solutions to the foreclosure proceedings pending before the courts are discussed with the homeowners’ attorneys and the attorneys for the financial institutions. These foreclosure court conferences often result in negotiations leading towards mortgage modifications and/or other solutions to these problems.

Cases in New York are subject to a significant amount of scrutiny by the courts. The purpose of this scrutiny is to see to it that innocent homeowners are not improperly removed from their homes.

Saving Your Home, Foreclosure Defense Attorneys

We can save your home from foreclosure. We attend foreclosure court conferences on your behalf. We can submit an answer to your foreclosure proceeding that can include defenses involving defective mortgages, defective foreclosure lawsuits, predatory lending and other real estate related defenses. We are knowledgeable about federal laws and foreclosure. We will provide you at the time of the initial consultation with all of your foreclosure options.

These options will include foreclosure related bankruptcies. The filing of either a Chapter 7 or Chapter 13 bankruptcy will stop foreclosures from moving forward. Filing a bankruptcy will also stop debt collectors and collection lawyers that may be harassing you. There are many bankruptcy myths that are untrue. Bankruptcy will not permanently destroy your credit. We will be able to help you re-establish credit after filing a bankruptcy.

Call us for a free consultation. We will discuss all foreclosure defenses and bankruptcy options with you at your initial free consultation. We appreciate your visiting our foreclosure blog.

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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