New York’s New Mortgage Proposal

foreclosure defense attorneysNew 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.foreclosure advocate for homeowners

Negotiations with Bank Does Not Stop Foreclosure Lawsuit

foreclosure defense attorneysA 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.

helping homeowners stay in their homesElliot Schlissel is a foreclosure defense lawyer. His office has represented homeowners for more than twenty years on mortgage foreclosure lawsuits throughout the Metropolitan New York area.

Home Buyers Misconceptions

foreclosure defense lawyerBuying a home is a complicated undertaking. First home buyers usually rely on discussions with friends and relatives as to what action they should take, what they should do, what they should be aware of, and how real estate transactions are conducted. The lay of the land on home purchases has changed. The mortgage bubble that resulted in the real estate crisis in America has changed some of the ground rules.

Real Estate Brokers Are Not Always Necessary

Real estate brokers provide a valued service to both buyers and sellers. They are very well paid for their services. However, homeowners can sell their homes without a real estate broker. This is especially true if someone is available to show the home during evenings and weekends. A homeowner can advertise the home for sale in local newspapers and/or on the internet, meet and greet the prospective purchasers, and hire an attorney to represent them on the real estate transaction. If the homeowner does not have the time, the patience, or the availability, hiring a real estate broker to represent them may be a necessity. Websites such as www.zillow.com and www.redfin.com can be utilized by a homeowner who seeks to avoid paying the commissions related to listing a home with a real estate broker. Many home buyers today utilize the internet to look at the material on these websites to find the home of their dreams.

Hidden Costs of Owning a Home

The average homeowner, when looking to purchase a home, takes into consideration the mortgage and sometime the taxes on the property. In addition to the mortgage and taxes, homes require heat in the winter and they may require air conditioning in the summer. The fuel oil to heat the home and the electricity to air condition the home can be expensive. Depending on the climate of the area where the home is located, these expenses can amount to between $5,000 and $10,000 per year. Even if the home does not need air conditioning, the electricity to run the appliances, computers, and keep the lights on can be very expensive. The grounds of the home need to be maintained. The homeowner has to maintain his lawn and shrubs and the rest of his property or hire a gardener to do so. The exterior of the home needs to be kept in good condition. Painting needs to be done on a periodic basis and/or the home needs to be sided. Roofs can leak, boilers can break, pipes can leak, electrical issues can develop. These are all potential expenses a homeowner may face.

Down Payment Policies

A 20% down payment is not always needed to obtain a mortgage. If the prospective homeowner is looking to obtain a conventional mortgage from a financial institution, a 20% down payment may be necessary. However, under Federal Housing Authority (FHA) programs, much less is required as a down payment. In some situations, as little as 5% or 10% of the cost of the home is sufficient as a down payment. Programs are available from the Veterans Administration for veterans who can finance a home with a very low down payment.

foreclosure advocate for homeownersElliot S. Schlissel, Esq. has been representing clients in real estate transactions for more than 35 years. His office represents homeowners in buying and selling of homes, defending them against foreclosures, and helping them obtain mortgage modifications when they fall behind on their mortgages.

Stopping Foreclosure in Its Tracks

foreclosure defense attorneysTimes 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.

assisting homeownersIf 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.

Home Loans Will Be Harder to Obtain in 2014! – Part II

foreclosure defense attorneysFewer Foreclosures in the Future

The creation of the Consumer Financial Protection Bureau (CFPB) may make it more difficult for financial institutions to foreclose on homes owned by homeowners who have stopped making mortgage payments. “For every foreclosure, lenders will have to show the CFPB that there was absolutely no way they could do anything else” according to Gaffney. This will require financial institutions to offer homeowners behind in their mortgage, additional options other than foreclosure. Those options may involve short sales, refinancing, cash for keys arrangements (these are arrangements where lenders pay delinquent homeowners to hand over the keys to their residence and walk away from their homes) and other potential options. Due to the necessity of offering these alternatives, lenders may become concerned that taking back homes from delinquent homeowners will be more difficult. This may result in more conservative underwriting requirements by lenders which will end up shutting more prospective homeowners out of the marketplace to obtain mortgages.

Ability to Pay Rules

Under the new rules going into effect in 2014, financial institutions will have less latitude in evaluating prospective homeowners regarding mortgages. The lender will have to take into consideration the “ability to pay” of the prospective borrower. The following are a list of the new rules lenders will have to take into consideration in underwriting new mortgages in 2014:

  1. Current or reasonably expected income or assets;
  2. Credit history;
  3. Monthly mortgage payments;
  4. Current employment status;
  5. Current debt obligations, (alimony, child support, credit card bills);
  6. Monthly payments on other loans;
  7. Monthly payments on mortgage related obligations; and,
  8. Monthly debt to income ratio or residue income.

Debt to Income Ratio

The debt to income ratio under the new rules will create problems for many families who seek to obtain mortgages. Under the new rules going into effect on January 1, 2014, the monthly debt to income ratio will be set at a maximum of 43%. This means homeowners will not be able to utilize more than 43% of their income to pay all of their financial debts. These debts will include car loans, credit cards, personal loans, and other financial obligations over and above the prospective mortgage they seek to obtain.

Conclusion

Applying for a mortgage in 2014 is going to be more difficult. If you are interested in obtaining a mortgage, apply now!foreclosure advocate for homeowners

Home Mortgage Loans Will Be Harder to Obtain in 2014! – Part I

foreclosure defense attorneysStarting on January 1, 2014, it will be more difficult for prospective homeowners in the United States to obtain mortgage loans. This is as a result of the passage of the Dodd-Frank Act. This statute was passed by Congress when the housing market melted down a number of years ago. After the housing meltdown, the federal government funded a bailout of large financial institutions. The Dodd-Frank Act is an attempt to regulate the lending industry. It is designed to protect consumer/taxpayers. In addition to the Dodd-Frank Act there is a Consumer Protection Act of 2010 which also goes into effect January 1, 2014.

“Under the new rules if [banks] want to lend correctly, by the book, they are going to [have to] leave out a lot of borrowers who would otherwise qualify for a mortgage” according to Jacob Gaffney, the Executive Editor of HousingWire.com, and HW magazine. It is estimated close to 50% of the borrowers who could obtain a mortgage in 2013, may not qualify in 2014. What do you do if you are thinking about getting a mortgage? It is suggested you obtain it in 2013.

The Consumer Financial Protection Bureau

Under the Dodd-Frank Act the Consumer Financial Protection Bureau (“CFPB”) is created. The Bureau became operational in July of 2011. The purpose of the CFPB is to prevent consumers from taking out mortgages which were beyond their ability to repay. This federal agency acts as a watchdog to see to it banks don’t start making loans to consumers they can’t afford.

According to Jacob Gaffney, the Consumer Financial Protection Bureau is a mistake. He recently stated “any company out there, especially the larger banks that have business operations outside of mortgages, are going to dwindle their mortgage operations because [the mortgage operations are] just too risky.” He further stated if there are fewer large lenders he anticipates there will be fewer mortgages offered.

assistance for homeownersElliot S. Schlissel is a foreclosure attorney with more than 20 years of experience helping homeowners to keep their homes by fighting foreclosure lawsuits. He also helps clients obtain mortgage modifications and seeks out other alternatives to foreclosure.

Mortgage Terms – Part II

foreclosure defense attorneysDifferences Between the Note and Mortgage

A note is signed by the person obligated to make the payments pursuant to the terms of the contract of the promissory note. The person who is obligated to make the payments is not necessarily the same person that owns the property. In some situations a guarantor or other individual who has better credit than the homeowner is required to be on the note. In some transactions where there are two people involved, whether it is a husband and wife or just two individuals are the owners of property, whose names are on the deed and one of those individuals has bad credit only the individual with good credit may be on the note.

A mortgage is a document that is signed by the individuals who own the property. In the large majority of situations, the homeowners execute both the note and the mortgage. However, this is not always the case. Where corporations are involved, the corporate entity that owns the property will usually sign the mortgage. However, the principals of the corporate entity will execute the note.

Mortgages are Recorded

A mortgage needs to be recorded in the county seat of the county where the property is located. The recording of the mortgage creates a record for all those individuals making inquiry as to whether the home is owned free and clear of financial impediments and to ascertain who the lender is.

assisting homeownersElliot S. Schlissel, Esq., is a foreclosure attorney representing individuals throughout the metropolitan New York area whose homes are threatened with foreclosure or in foreclosure. He strives to keep his clients in their homes by litigating the foreclosure proceedings asserting technical defenses and assisting his clients in obtaining mortgage modifications.

Mortgage Terms – Part I

mortgage modification attorneysMost homeowners in the State of New York hire an attorney to represent them when buying or selling a house. The attorney handles the paperwork, deals with the bank lawyer, and the other parties’ attorney. Unfortunately when homeowners fall behind on their mortgage payments, the banks bring foreclosure lawsuits against them. Homeowners will sometimes research their rights on the internet to determine whether they have viable defenses to their foreclosure proceedings. When reviewing the terms of either a summons and complaint in foreclosure or with regard to the financing of a home through a financial institution, at the time of purchase, it is important to know actually what the specific terms utilized by financial institutions mean.

The Note

The loan document or note refers to a promissory note given by the borrower to the lender. The promissory note creates a contract wherein the borrower agrees to pay a certain amount of money to the financial institution pursuant to specific terms. With regard to notes involved in real estate transactions, the length of the repayment obligation is usually 15 or 30 years. The interest rate on the financial obligation determines how much the borrower will have to pay the financial institution each month. In addition to repaying the interest and principal on the loan, taxes and insurance on the residence are usually added to the monthly payment costs.

A simplified way to look at the promissory note is that it is basically an “IOU”. The note actually does not specifically relate to the property involved. It exists on its own as a financial obligation between the borrower and the financial institution. If the borrower does not make timely payments pursuant to the terms of the promissory note the lender can sue the borrower on the note for breach of contract.

The Mortgage

Let’s start with what a mortgage is not. A mortgage is not a “promise” to pay the loan on the property. The mortgage is not any type of promise. The mortgage is attached to the property by the debt created by the note. The mortgage contains language similar to a deed that gives the lender the right to take the property back if the borrower does not make the timely payments pursuant to the promissory note. In effect the mortgage attaches the note to the property and gives the lender a remedy to sell the property in the event the terms of the promissory note are not adhered to by the borrower.homeowner advocates

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

New York’s Backlog of Foreclosure Cases

mortgage modification lawyerThe foreclosure process in New York, even under optimum circumstances, can take as long as three years. New York has enacted legislation regarding the robo-signing scandal that was uncovered in 2010. There are new court imposed rules affecting attorneys representing banks that seek to bring foreclosure lawsuits.

New Foreclosure Requirements

The attorneys for financial institutions must prepare an affidavit or swear under penalties of perjury that the foreclosure documents being submitted are accurate. Consternation by lender’s attorneys with regard to the accuracy of notes, mortgages and assignments of mortgages have caused delays as long as two years in the New York foreclosure process.

Lenders themselves must verify, when a foreclosure action is initiated, that the lender has the right to sue. This deals with the issue of standing. Notes and mortgages are sold as commercial paper. If the sale is not accompanied by an appropriate assignment from one bank to another, the second bank has no right to bring a foreclosure lawsuit.

The delays in foreclosure proceedings can cause interest and penalties to accrue against the homeowner.

Foreclosure Settlement Conferences

When a foreclosure lawsuit is initiated in the State of New York, the homeowner is entitled to attend a foreclosure settlement conference. At these conferences, judges and their staff seek to mediate foreclosure issues and assist homeowners in obtaining mortgage modifications. Unfortunately, the reality is many of the homeowners whose homes have gone into foreclosure could not afford, when they bought the homes, to pay the mortgages and due to the economic crisis facing America have even less capability today of paying their mortgages.

foreclosure advocate for homeownersElliot S. Schlissel, Esq. is a foreclosure defense lawyer representing homeowners throughout the metropolitan New York area who seek to fight foreclosure lawsuits.

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