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Banks Acting in Bad Faith

mortgage modification attorneysIn the case of Federal National Mortgage Association v. Singer, Index No. 850039/2011, Justice Moulton sitting in a Supreme Court Foreclosure Part in New York County, ruled the two banks involved should forfeit more than $100,000 in interest on loans to Mr. & Mrs. Singer. This was a sanction for the failure of the banks to act in good faith with regard to negotiating a mortgage modification with the Singers.

History of the Case

In 2004, the Singers bought two apartments in Manhattan which were next to each other. They gutted and renovated the apartments. When they purchased each of the apartments they took out a separate mortgage on each of the two apartments. After the apartments were renovated, New York taxed the two apartments as a single residence. In 2008, the Singers had a downturn in their income. They used all of their savings to try to keep up with the mortgage payments, taxes, common charges, and expenses which totaled in excess of $5,000 per month. The mortgages totaled more than $500,000 and had interest rates of 7.4% and 6.75%.

Mortgage Consolidation

Mrs. Singer, on numerous occasions, tried to consolidate the two mortgages at a lower interest rate. Initially, she applied to Countrywide, the original lender on the mortgages. Countrywide refused to extend the term or lower the interest rates on the mortgage. Countrywide took the position the Singers did not qualify as distressed borrowers. Their monthly payment on each loan did not exceed 31% of their combined monthly income. In response to this argument Judge Moulton said the bank’s analysis “resulted in an absurd result.” He said this was symptomatic of “many of the faults that plague the current system of refinancing residential property that is in default and/or in foreclosure.”

The loans were eventually sold to Bank of America and the Federal National Mortgage Association (Fannie Mae). Approximately a year and a half later a foreclosure lawsuit was initiated. The Singers again applied for a loan modification. Five months later their modification request was denied. The Singers also offered to pay $18,000 in accumulated interest as part of the loan modification.

Counsel for the Singers had on various occasions suggested balloon mortgages. These mortgages enable residents to make their mortgage payments and help the banks to receive the total amount due and owing to them. This is especially true in light of the fact the apartments owned by the Singers were worth substantially more than the $500,000 in combined mortgages.

Settlement Court Conference

The Singers had attended 5 court settlement conferences. At each of these conferences both Bank of America and Fannie Mae refused to meaningfully negotiate mortgage modifications.

Conclusion

Banks who do not cooperate in negotiating mortgage modifications in good faith can be punished by the courts.New York foreclosure defense lawyer

The Note and The Mortgage

foreclosure and real estate lawyer in New YorkIf you have purchased a home and financed it through a financial institution, you attended a closing. At that closing, you executed numerous documents. One of those documents is the note. The note is simply an I owe you. The note basically states you are borrowing money from a lender and you promise to pay it back. The note includes the terms of repayment, interest rates, the term of the loan and information concerning late charges and other issues.

The Mortgage

The mortgage and note are two separate documents completely. The mortgage is an agreement which allows the financial institution, who is the lender concerning your property, to have a security interest, or lien, on your property. Another way of looking at the mortgage is you pledge your home as collateral to secure the financial transaction which allows you to buy your home. If the bank does not get paid, they go after the collateral, to wit, your home, to take it back and sell it at auction to repay the note which documents the loan you took from them.

New York foreclosure defense attorney IslandElliot S. Schlissel is a foreclosure lawyer. He has helped hundreds of New Yorkers stay in their homes. He fights foreclosure lawsuits throughout the Metropolitan New York area and helps his clients obtain mortgage modifications. Elliot and his staff of attorneys can be reached 7 days a week.

Motion to Foreclose Mortgage Denied

Long Island Foreclosure DefenseCitibank brought a foreclosure proceeding in Kings County Supreme Court before Justice Francois Rivera. Judge Rivera noted the affirmation submitted by Citibank relied on documents. Judge Rivera pointed out the documents need to be annexed to the affirmation and the affiant has to establish an evidentiary basis for the court to accept these documents. Judge Rivera ruled that the mere submission of these documents by counsel for Citibank without any detailed identification or presentation or authentication was an inadequate presentation.

Judge Rivera noted the motion papers submitted by counsel for Citibank stated there were exhibits labeled A through C. Citibank’s attorneys, in their moving papers, clearly described exhibits A and B. They did not explain what exhibit C was. Due to Citibank’s attorney’s failure to describe exhibit C, Judge Rivera completely disregarded it.

Bank’s Motion Was Ambiguous

Judge Rivera found Citibank’s motion papers to be ambiguous. He also felt they were incomplete. Judge Rivera stated in his decision he was not sure whether Citibank sought to substitute Federal National Mortgage Association (FNMA) as plaintiff because it was the owner of the note and mortgage or because it was the servicer of the owner of the note and mortgage. Judge Rivera’s decision stated, although an assignment evidencing the mortgage was assigned by Citimortgage to FNMA no evidence of an admissible nature was submitted that FNMA owned the note. In addition, no evidence was submitted showing FNMA had any authority to act as servicer on the note.

Conclusion

The standard that banks and their attorneys must meet to be successful in a foreclosure lawsuit is a very high standard. Unless the bank attorney is very careful and submits appropriate motion papers, their motions to foreclose on homeowners’ properties can be denied by vigilant judges.

foreclosure attorney on Long Island and New York CityElliot Schlissel is a foreclosure defense attorney who has been representing homeowners and helping them keep their homes for more than 20 years.

The New Relaxed Mortgage Requirements

mortgage modification attorneyFannie Mae and Freddie Mac are now underwriting mortgages which only require a 3% down payment. These new 3% down payment mortgages are only available for first time home purchasers. Is this a good idea? It is thought that home ownership is the foundation in building equity and wealth. It is anticipated these new relaxed mortgage regulations will make it easier for middle class Americans to purchase homes.

The 3% Down Payment Mortgage

The purpose of the 3% mortgages is to make it affordable for young people who don’t have significant funds for down payments, but who have reasonable income, to enjoy the benefits of home ownership. It is also thought the 3% mortgage program will have an affirmative impact on the housing market in the United States.

Mortgage Safeguards

There are a number of safeguards which have been built into this new 3% mortgage program. The current credit requirements to obtain a mortgage shall remain the same. Individuals applying for these mortgages will have to document their income. Only fixed rate mortgages will be available with 3% down payments and the program will only be available for primary residences. It will also be necessary for the prospective home purchasers to have private mortgage insurance.

Historical Perspective of 3% Mortgages

Studies have shown the default rate on 3% mortgages, when they were available in the past, was about the same as the default rate for individuals taking 5% down payment mortgages. To make sure the 3% mortgages don’t become a springboard for another housing bubble, individuals seeking to take out 3% mortgage loans will be required to take a buyer counseling program.

Conclusion

3% mortgages are designed to make the benefits of home ownership available for more middle class families. However, the 3% mortgage program may be the springboard for future default by homeowners who didn’t have the financial wherewithal to actually purchase their dream home. Hopefully this will not spur another foreclosure crisis in America.

foreclosure defense lawyer in New YorkElliot S. Schlissel is a foreclosure lawyer who has helped hundreds of New Yorkers continue to live in their homes.

How to Qualify For a Mortgage

To watch today’s video blog, please click on the link below:

http://youtu.be/S1VQNNwAYj0

Elliot S. Schlissel is a foreclosure defense attorney. Elliot and his associates have been helping homeowners stay in their homes for more than 20 years.  The lawyers at the Law Office of Elliot S. Schlissel help their clients obtain mortgage modifications, defend foreclosure lawsuits, and counter sue banks.  Elliot can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

No Money Down Mortgages

foreclosure attorney on long islandIn 2008, there was a financial crisis in the United States. The economy wasn’t doing well, banks went out of business. Hundreds of thousands of Americans couldn’t meet their mortgage payments and their homes went into foreclosure. In 2014, six years later, we are still dealing with the aftermath of the issues created by giving mortgages to individuals who couldn’t afford to make the payments.

The no money down mortgage, to a minor extent, still exists in the United States. The no money down mortgage, which to a considerable extent, was responsible for the housing bubble that existed in the United States in 2008, does still exist in 2014. Although this type of mortgage is still available in the marketplace, it is hard to find.

What is a no money down mortgage? This is a mortgage where 100% of the purchase price of a house is financed. A no money down mortgage can allow people with virtually no assets to buy a house. However, these types of mortgages usually come with higher fees, and high interest rates.

Veterans’ Administration Mortgages

The Veterans’ Administration still has mortgage programs which allow veterans to purchase homes without putting money down. These programs, however, have funding fees of two or three percent. The fee is required to be paid in advance. This payment in advance actually creates a down payment of sorts.

There is also a program by the United States Department of Agriculture which offers no money down mortgage in rural areas. It should be noted that some suburban areas around large cities are still considered to be rural areas by the United States Department of Agriculture.

Credit Unions

While banks are for profit institutions, credit unions are not for profit institutions. An example of a credit union which offers a no money down mortgage is the Navy Federal Credit Union. The no money down mortgage given by the Navy Credit Union has a 1.71% funding fee. This funding fee must be paid at the time the mortgage is given.

What Mortgage is Right for You?

If you are in the market to buy a home, you should meet with a mortgage consultant. You should discuss your financial circumstances and make inquiry as to what type of mortgage is best for you and your family. This discussion should take into consideration your long term ability to make the mortgage payments to avoid having your home going into foreclosure.

helping homeowners stay in their homesElliot S. Schlissel is a foreclosure attorney. He represents individuals and families throughout the Metropolitan New York area whose homes have gone into foreclosure. Elliot and his staff of lawyers take the appropriate legal action to keep families in their homes and avoid losing their homes in foreclosure proceedings.

Documents Used to Obtain a Mortgage

Please click on the link below to watch today’s video blog:

http://youtu.be/MlHgJj_8Xhw

Elliot S. Schlissel is a foreclosure defense lawyer.  He can be reached at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

How to Reduce Mortgage Payments

To view today’s video blog, please click on the link below:

http://youtu.be/FUldQvJ2NWQ

Elliot S. Schlissel is a foreclosure defense attorney.  He can be reached at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

Low Cost Loans Designed to Stop Foreclosure On Long Island Are Now Available

loan modification lawyerNew York Attorney General Eric T. Schneiderman has recently held a news conference with regard to the new low cost loan program designed to stop foreclosures. At his news conference he stated “we are going to provide loans to families that prevent them from losing their homes.” He went on to state “we know how hard Long Island was hit by the foreclosure crisis this was the worst of the worst. There was a big boom and a big bust.”

Foreclosures on Long Island

The foreclosure rates in Nassau and Suffolk Counties are among the highest in New York State. The highest rate of foreclosures is in the Village of Hempstead in Nassau County. Hempstead residents have a mortgage delinquency rate approaching 30%.

The New Program

Under the new program, families whose mortgages are overdue can borrow up to $40,000. These low cost loans can be used to bring mortgages up to date and deal with property tax issues. These loans will not be payable until the house is sold or the entire mortgage is repaid. These loans will be interest free. However, the amount due and owing will be adjusted to account for inflation. Applications for these loans will start being processed on September 15, 2014. Applications for Long Island residents will be processed first and a month later residents of other parts of the state can apply for this program. There is a requirement that individuals applying for this program earn less than 120% of the area’s median income.

helping homeowners stay in their homesElliot Schlissel is a foreclosure attorney. Elliot has been helping New Yorker’s stay in their homes for more than 20 years. Elliot and his staff of lawyers litigate foreclosures, deal with predatory lending issues, and assist clients in applying for mortgage modifications. His phones are monitored 24/7 and free consultations are offered.

The Facts About Home Loans in Today’s Home Mortgage Market

Obtaining a mortgage is becoming a bit easier. Credit scores required by financial institutions to qualify for a mortgage loan have been coming down. The average credit score for loans that have recently closed is down to approximately 730. This is on a scale which ranges between 300 and 850. Only a year ago, you would have needed a credit score of a minimum of 750 to qualify for a mortgage to purchase a home. You should note, that although the average credit score is approximately 730 on home loans which have recently closed, there are some financial institutions that are now offering mortgages to individuals with credit scores as low as 700. This allows more potential homeowners to have the opportunity of purchasing the American dream, a single family home.

What Are Loan to Value Ratios?

When a bank underwrites a mortgage loan application, one of the significant items they look into is called the loan to value ratio. The loan to value ratio compares the appraised value of your home to the amount of money you seek to borrow. An example of loan to value ratio is, let’s say you wanted to purchase a home that cost $400,000. If you had enough money for a 20% down payment, which would be $80,000, the loan to value ratio you would be looking for would be 80%. This simply means you wanted to obtain a mortgage of 80% of the value of the home.

Debt to Income Ratios

When banks underwrite a mortgage loan, they look into how much money you are earning. In today’s mortgage market, they only count the funds that appear on your income taxes. Money made off the books, which doesn’t appear on a tax return, will not be considered by a financial institution when underwriting a mortgage. The debt to income ratio is sometimes referred to as “DTI”. There are actually two components of the debt to income ratio. The first component is called the “front end” debt to income ratio. This represents the percentage of your total monthly income you will have to utilize to make your mortgage payment. The second debt to income ratio is referred to as the “back end DTI”. The represents the percentage of your total gross monthly income you will pay towards your mortgage plus all other debt obligations. This would include car payments, personal loans, money owed to American Express, Mastercard, Visa, gas station credit cards, store credit cards, and all other financial obligations.

Let’s look at an example of debt to income ratios. Let’s assume your total family income is $8,000 per month. For this example, let’s use a mortgage payment of $2,000 per month and other financial obligations of an additional $2,000 per month. In this example your front end debt to income ratio would be 25% and your back end debt to income ratio would be 50%. Banks are currently using front end debt to earnings ratios of 25% and back end debt to earnings ratios of approximately 38%. These are more liberal percentages than banks were using approximately a year ago.

Conclusion

Although the easy money days regarding mortgage financing are gone, banks are now being more reasonable with prospective homeowners with regard to loosening their standards to obtain mortgages.

helping homeowners stay in their homesElliot Schlissel is a foreclosure attorney. For more than 20 years, Elliot and his associate attorneys have been litigating all types of real estate and foreclosure cases. Elliot’s goal is to help his clients stay in their homes and fight off foreclosure lawsuits brought by financial institutions. He also assists his clients in obtaining mortgage modifications on their homes.

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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