mortgage modification

Surging Foreclosures on Long Island

November 5, 2013 by Elliot S. Schlissel

As 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.

Wells Fargo Sanctioned By Court For Bad Foreclosure Practices

September 20, 2013 by Elliot S. Schlissel

Justice 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.

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

City Seeks To Save Homes Through Eminent Domain

September 18, 2013 by Elliot S. Schlissel

The 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

Elliot 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.

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

Part III: Bank Of America Had Been Sued For Improperly Handling Mortgage Modifications Before

September 6, 2013 by Elliot S. Schlissel

In 2012, Bank of America settled a lawsuit brought by a former employee of a contractor who worked with the bank. This employee had accused Bank of America of mishandling HAMP applications. The Bank has also settled two major Federal lawsuits related to improper foreclosures practices.

Consolidation of Lawsuits

The pending lawsuit against Bank of America is part of a consolidation of 29 separate suits brought against the bank. The lawsuits come from across the country and have been certified as a class action. The lawsuit deals with homeowners who received trial modifications, and made all of their payments on a timely basis. However these homeowners did not receive timely responses from the bank as to whether they would be given a permanent mortgage modification. Pursuant to the HAMP program, the initial trial period was supposed to last for three months. However with Bank of America, it often lasted much longer. The problem was that Bank of America, as well as other banks, refused to properly fund their mortgage servicing operations under the HAMP program. Unfortunately there was not sufficient government oversight of these programs to pick up these problems right away.

It is estimated there are 800,000 mortgages that would have qualified for HAMP mortgage modifications if Bank of America and other large financial institutions had properly funded the HAMP program and supervised the program in the manner in which it was intended. This program was intended to help homeowners during the mortgage crisis in America. Unfortunately, since it was a voluntary program that was underfunded, it did not accomplish its goal!

The Purpose Of The HAMP Program

The purpose of the HAMP program was for the government to give cash incentives to financial institutions to modify home mortgages pursuant to specific standards. This was supposed to provide a streamlined process to help the 4 million homeowners having difficulties in the United States. Instead of accomplishing its goal, Bank of America utilized this program as a means, pursuant to statements of former employees, to obtain as much money as possible from the struggling homeowners and then foreclose their homes. Under the program, buyers were supposed to make trial payments for three months. However in many instances, the trial payments lasted for as long as a year and sometimes even longer. After making as much as a year or more of trial payments, instead of the mortgage modification becoming permanent, the homeowners were denied mortgage modifications. To make matters worse, they then found they owed the difference between the amount of the payments under the trial modification and their original mortgage payments. The Bank of America employees, in statements they had given stated that many of them were given no training whatsoever with regard to the requirement of the HAMP program.

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

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

September 4, 2013 by Elliot S. Schlissel

Chris 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.

Filed Under: Bankruptcy, Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure defense, foreclosure defense lawyers, foreclosure related bankruptciy, mortgage modification, mortgage modification attorneys, mortgage modification denial, mortgage modification denied new york, Mortgage Modifications attorney

Part I: Bank of America Employees Lied To Homeowners

September 2, 2013 by Elliot S. Schlissel

In 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.

Filed Under: Bankruptcy, Foreclosure Defense, Mortgage Modification Tagged With: Bankruptcy mortgage modification, defective mortgages, mortgage modification, mortgage modification attorneys, mortgage modification denial, mortgage modification denied new york

Increased mortgage modifications have scaled foreclosure down

August 23, 2013 by Elliot S. Schlissel

The 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

Filed Under: Bankruptcy, Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure crisis, foreclosure defense lawyers, mortgage modification, mortgage modification attorneys, Mortgage Modifications new york

Home Sales Are Brisk In May 2013 On Long Island

August 13, 2013 by Elliot S. Schlissel

There were more homes for sale on the market in May of 2012 than there were in May of 2013 on Long Island. There were more new listings in Nassau County in May of 2013 than there were in May of 2012, due to the resurgence of more buyers coming back into the market place to purchase homes.

Supply And Demand Of Homes On The Market Place

Jonathan Miller, the President and Chief Executive of an appraisal firm called Miller Samuel Inc., recently stated “the supply coming on to the market can’t keep pace with demand.” He was referring to the market place in Nassau County. The strong demand by prospective purchasers is reducing the inventory of homes on the market in Nassau County. Although the inventory of homes on the market for sale has been decreasing, it is still greater than the normal inventory that existed prior to the housing crisis. A 6 ½ month supply of homes on the market is considered a balanced market in New York.

Home Prices Rise Slightly

The sale prices of homes in May rose approximately 4% in Nassau and Suffolk Counties on Long Island. This is far below the 15.4% increase in the sale prices of homes overall in the United States. However the 4% increase is still a positive factor. Rising home prices impact on the confidence in the economy. Cecelia Chen, a housing analyst for Moody’s Analytics recently stated “we are making strides towards a healthy market in terms of pace of activity.” She also stated, “Home prices are rising and construction activity is picking up, home sales are picking up, but the pace is exceptionally strong.”

Any increase in the amount of homes being sold and the prices they are being sold for is good for homeowner’s all over Long Island.

About the Author

Elliot S. Schlissel, Esq. is an attorney practicing on Long Island for more than 37 years. His law firm handles a variety of real estate matters, foreclosure law suits, and issues involving mortgage modifications.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure attorney, foreclosure defense, foreclosure defense attorneys, mortgage modification, mortgage modification attorneys, Mortgage Modifications new york, real estate

Banks Deny Mortgage Modifications

August 9, 2013 by Elliot S. Schlissel

New York Attorney General Eric Schneiderman has decided to sue Bank of America and Wells Fargo Bank for refusing to live up to their obligations concerning mortgage modification applications. Attorney General Schneiderman stated “339 people, since October of 2012, have complained about mortgage modification problems with Wells Fargo and Bank of America.” These banks are under an obligation under a $25 billion dollar settlement with the fifty States and the Federal Government to respond to requests for mortgage modifications within 30 days. Attorney General Schneiderman claims Wells Fargo and Bank of America have flagrantly violated their obligations under the settlement of that law suit. Mr. Schneiderman stated 220 of the complaints by homeowners were against Wells Fargo and 119 complaints were made against Bank of America.

Bank Of America And Mortgage Modifications

In response to these allegations, Bank of America representatives say they had already provided relief for more than 10,000 New York homeowners. These mortgage modifications, they claimed, amounted to more than a billion dollars. Bank of America representatives claimed they would work quickly to address the complaints made to the New York State Attorney General. A Wells Fargo representative stated “it is unfortunate that [Schneiderman] has chosen this route rather than engage in constructive dialogue through the established dispute resolution process.”

Foreclosure Defense

More and more homeowners have been taken advantage of by financial institutions to which they have submitted mortgage modifications requests. The loss of documents, the many months of delays, the lack of response from the bank’s representatives are frustrating and aggravating to homeowners. The best way for a homeowner to deal with these problems is to contact a foreclosure attorney who is experienced in taking legal action against banks for their failures to live up to their obligations and State and Federal consumer protection laws.

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

Appeals Court Rejects Bad Faith Remedy In Foreclosure Action

August 7, 2013 by Elliot S. Schlissel

Judge Patrick Sweeny sitting in Suffolk County Supreme Court, compelled a bank who acted in bad faith during the mandatory foreclosure settlement conferences to grant a mortgage modification to a homeowner. The bank appealed.

The Appellate Division in the Second Department, an Appeals court, held even though the bank failed to negotiate in good faith during the mandatory settlement conferences, Judge Sweeny’s remedy of compelling a loan modification was “unauthorized and inappropriate.” Justice Dickerson wrote in a decision for the Appellate Division, “Courts may not rewrite the contract that the parties freely entered into – the loan and mortgage agreements – upon a finding that one of the parties failed to satisfy its obligation to negotiate in good faith.” Justice Dickerson held in his decision Justice Sweeny’s court order ordering Wells Fargo to comply with the terms of the original loan modification agreement was a violation of the United States Constitution’s contract clause. It was also a violation of the banks due process rights. Justice Sweeny had also ordered that the foreclosure was dismissed.

Remedies For Bad Faith By Banks Regarding Foreclosures

Concerning the lower court’s decision, Justice Dickerson acknowledged the provisions mandating good faith negotiations in settlement conferences were “silent” with regard to the issues of sanctions and remedies. His decision stated “in the absence of a specifically authorized sanction or remedy in the statutory scheme, the courts must employ appropriate, permissible, and authorized remedies tailored to the circumstances of each given case. What may prove appropriate recourse in one case may be inappropriate or unauthorized under the circumstances presented in another. Accordingly, in the absence of further guidance in the legislature or the Chief Administrator of the Courts, the courts must prudently and carefully select from among available and authorized remedies tailoring their applications to the circumstances of the case.”

Judge Dickerson said the Appellate Court saw no reason to disturb Justice Sweeny’s finding that Wells Fargo did not satisfy its obligations. The Appellate Court did not rule out other possible sanctions and remedies against Wells Fargo. However in this case, they found that Judge Sweeny had gone too far.

The Appellate Court took the position the original modification was “merely a trial arrangement, not an agreement for binding obligations of the parties going forward.”

About The Author

Elliot S. Schlissel, Esq. is a foreclosure attorney representing homeowners concerning foreclosure legal defense, mortgage modifications and other remedies against banks who have been involved in improper mortgage and foreclosure practices.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure defense, foreclosure defense attorneys, mortgage modification, mortgage modification attorneys, mortgage modification denial

Surging Foreclosures on Long Island

Wells Fargo Sanctioned By Court For Bad Foreclosure Practices

City Seeks To Save Homes Through Eminent Domain

Part III: Bank Of America Had Been Sued For Improperly Handling Mortgage Modifications Before

Part I: Bank of America Employees Lied To Homeowners

Increased mortgage modifications have scaled foreclosure down

Home Sales Are Brisk In May 2013 On Long Island

Banks Deny Mortgage Modifications

Appeals Court Rejects Bad Faith Remedy In Foreclosure Action

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