Qualifying for a Mortgage

foreclosure defense attorneysThe purchase of a single family home is usually the largest single purchase made by Americans during the course of their lifetime. Before you can purchase a home, it is strongly suggested you look into your ability to qualify for a mortgage to help you pay for the home. There are a number of significant factors taken into consideration by financial institutions when underwriting a mortgage.

Are You Employed?

The underwriters of mortgages at financial institutions are interested in your employment history. They are especially interested in if you are currently employed. If you are self employed, the underwriters may want detailed information about the capacity in which you are self employed. If you are working for a company or business, they are going to ask you questions as to how long you have worked in this position for, and what were your prior positions. It is especially important that you maintain good records concerning your past three years tax returns, bank statements concerning your checking and savings accounts, pay stubs and other material necessary to verify your employment history.

The Down Payment

If you are looking to obtain a conventional mortgage, most banks will loan you up to 80% of the cost of the house. This means you will have to come up with 20% of the funds on your own. In cases where you have a problematic credit history, you may need to put down more than 20% of the cost of the house as a down payment.

Closing Costs

There are numerous closing costs related to buying a home in New York. There are bank fees. There are underwriting fees. There are points payable to the bank. There are attorneys’ fees for your attorney and the attorney for the financial institution. There is the prepayment of taxes on the house. There is the payment of casualty insurance on the house. You will have to reimburse the seller for all of the oil in the oil tank. In addition, there are numerous other types of closing costs. It is estimated that closing costs in New York will run anywhere from $5,000 to $15,000 to purchase a home. You should carefully look into the closing costs with the attorney representing you on the real estate transaction.

Credit Scores

The financial institution will order credit reports for those individuals whose names will appear on the mortgage of the home. You should obtain a copy of your credit report in advance. In the event there is inaccurate information on your credit report, you should immediately take action to correct this. In the event your credit score is not high enough to meet your bank’s requirements to obtain a mortgage, there are a variety of things you can do to boost your credit score prior to submitting a mortgage application.

The Mortgage Loan Application Process

The process of obtaining a mortgage loan can be aggravating for the prospective homeowners. Financial institutions currently are asking for significant amounts of information from a prospective homeowner to determine whether you are a good risk and that you have the ability to repay your mortgage loan. Hopefully this article will open your eyes as to the various areas you should look in before contacting a financial institution and starting the process of trying to obtain a mortgage.

helping homeowners stay in their homesElliot Schlissel has been representing clients in real estate related matters for more than 45 years. Elliot and his staff of attorneys represent homeowners who are buying and selling homes. In addition, Elliot and his staff of attorneys provide foreclosure legal defense for their clients.

Hidden Expenses When Buying A Home – Part I

There is a common misunderstanding with regard to the total of all expenses new homeowners are exposed to when they purchase a home. Homeowners often believe all they have to do is put the down payment down, get the balance of the funds for the mortgage from a bank, and this will be sufficient to purchase a home. However there are numerous other expenses prospective homeowners face when purchasing a home.

Down Payment

I’ve already mentioned the down payment. In most real estate transactions, the homeowners puts 10% of the purchase price down at contract, and an additional 10% at the time of closing. This amounts to a total of 20% of the purchase price. If the homeowners are obtaining a Federal Housing Authority (FHA) mortgage, their down payment may be as little as 5% to 10% of the purchase price of the home.

Engineering Inspection

A home is the largest purchase a family will make during the course of their lifetime. Before jumping into the purchase of a home, it is usually necessary to have an engineer do a thorough inspection of the home to make sure the roof doesn’t leak, the electrical system is adequate, the plumbing doesn’t leak, the foundation is secure and numerous other items in the home are in good condition. Home inspections can cost anywhere from $500 to $600 in the Metropolitan New York area by qualified engineers.

Expenses of Moving

When a family moves into a home, they usually hire a moving company to help them pack up their possessions and move them to their new home. Moving expenses can cost a homeowner anywhere from $1,500 to $6,000. If the move is cross country, or over a long distance, it could cost significantly more.

foreclosure advocate for homeownersElliot Schlissel is a foreclosure attorney representing homeowners in the buying and selling of homes, and fighting foreclosures when banks seek to take their homes away from them. In addition, Elliot Schlissel and his attorneys assist homeowners in obtaining mortgage modifications and to avoid losing their homes in foreclosure proceedings.

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.


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

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.


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

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.

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

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 45 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.

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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The information you obtain at this website is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your particular legal issue. This is attorney advertising.

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