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Mortgage Time Barred And Therefore Cancelled and Discharged

foreclosure attorney Long IslandIn a case before Justice Yvonne Lewis sitting in the Supreme Court Foreclosure Part in Kings County, defendant Ellery Beaver LLC brought an application for summary judgment seeking the discharge of HSBC’s mortgage on their property. HSBC brought a cross application for dismissal of the action by the plaintiff.

In this case, Renee took out a mortgage on her property. The mortgage was assigned to HSBC from the prior financial institution. HSBC brought a foreclosure action in 2006 claiming Renee defaulted in making the mortgage payments. HSBC’s original lawsuit was dismissed. In 2009, a second foreclosure action was started by HSBC. This was also conditionally dismissed in 2013 for failure to prosecute by HSBC.

Renee eventually sold the property to Ellery. More than a year passed and thereafter HSBC brought an application to restore the 2013 lawsuit which had been dismissed. Justice Yvonne Lewis denied this request. HSBC took the position the statute of limitations hadn’t run. However, the court took the position since HSBC accelerated the debt upon the filing of the first lawsuit, the statute of limitations had run and therefore any attempt to foreclose was time barred. The judge took the position Ellery was entitled to a judgment dismissing the mortgage because HSBC failed to successfully commence a foreclosure lawsuit within the six year statute of limitations time period. The judge ordered HSBC’s mortgage be dismissed and discharged.

Conclusion

This is a major win for homeowner’s rights. Even though lawsuits can be held to be time barred under the statute of limitations, it is very unusual a judge will go so far as to remove the mortgage lien from the property even though action upon the note is time barred.foreclosure defense lawyer

Bank’s 4 ½ Year Delay In Entering Judgment in a Foreclosure Case Are Grounds to Dismiss the Lawsuit

foreclosure attorney New YorkJustice Phyllis Orlikoff Flug sitting in a Foreclosure Part in Queens County Supreme Court recently had a case where the defendants moved to dismiss the bank’s lawsuit in a foreclosure legal action. The lawsuit had been initiated against the defendants Michael Pertab and Cholying Pertab in 2010. Michael had been served by personal service in July 2010 and Cholying had been served by substituted legal service in August 2010.

After more than 4 ½ years after the lawsuit was initiated the defendants appeared in this lawsuit. The court took notice the lawsuit was more than 4 ½ years old before the defendants decided to appear in the case.

Law Requires Entry of a Default Judgment Within One Year

Justice Flug took note that New York Civil Practice Law and Rules Section 3215(c) stated that if a plaintiff failed to take action to enter a judgment within one year after the default took place no entry should be made, but instead, the claim should be dismissed as being abandoned. The only exception to this rule was if there was sufficient cause shown why the dismissal should not be warranted. In this case Judge Flug found the plaintiff’s excuses for the delay in entering the judgment included a change of their lawyer, issues concerning the assignment of the mortgage to a new party, and administrative order 431/11. However, Justice Flug found that none of the explanations justified their delay of 4 ½ years with regard to moving forward to enter a default judgment. Justice Flug therefore granted the defendants’ (homeowners) motion to dismiss the case.

Conclusion

If a bank brings a lawsuit against you and they fail to enter a judgment within one year you have a basis for moving to have the action dismissed. A one year delay in banks moving forward to enter judgment is not unusual!

foreclosure defense lawyerElliot S. Schlissel is a foreclosure defense lawyer representing homeowners with regard to obtaining mortgage modifications and fighting foreclosure lawsuits throughout the Metropolitan New York area.

The Lack of Standing Defense

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

https://youtu.be/IXqt27nalqU

Elliot Schlissel is a foreclosure defense lawyer helping homeowners stay in their homes throughout the Metropolitan New York area.  He and his associates can be reached for consultation at 516-561-6645 or 718-350-2802 or send an email to schlissel.law@att.net.

Foreclosure Notice Requirement

foreclosure lawyerNew York Real Property Actions and Proceedings Law (RPAPL) Section 1304 requires financial institutions and loan servicing companies to provide homeowners, on residential property, at least 90 days notice before initiating a foreclosure lawsuit. The banks and/or their loan servicers must also provide the homeowner with the form of notice prescribed by the statute which provides among other things notice to the homeowner that a foreclosure lawsuit may be initiated. This notice is referred to as the 90 day pre-foreclosure notice.

The statute states the notice must be served “by registered or certified mail and also by first class mail to the last known address of the borrower, and if different, to the residence that is the subject of the mortgage.”

Compliance With RPAPL Section 1304

Many lenders seek to meet the compliance requirements of this section by submitting an affirmation by their attorney with a summary judgment motion that the certified and regular mailing requirements have been complied with. However the attorneys for the lenders have no personal knowledge these events actually took place. Therefore their affirmation that they took place is meaningless! Attorney’s affirmations should not be considered by courts to justify compliance with RPAPL section 1304.

Affidavits of Loan Service

Some lenders try to comply with RPAPL section 1304 by including in their motions for summary judgment representations by the loan servicer that the mailing requirements under RPAPL secion 1304 have been complied with. This is also nonsense! The loan servicer is usually hired by the financial institution long after the mailing requirement under this section needed to be complied with. The servicer therefore has no personal knowledge as to whether this section of the Real Property Law was complied with.

Conclusion

The failure of the financial institution to comply with RPAPL section 1304 provides a basis for an affirmative defense to a foreclosure lawsuit. A motion can be made by the homeowner’s attorney to dismiss the lawsuit for the failure of the financial institution to comply with this section. In other situations it can be used to cause a court to deny a summary judgment motion on behalf of the bank because they have not fulfilled the prerequisites necessary to bring the foreclosure lawsuit.

New York foreclosure defense lawyerElliot S. Schlissel is a foreclosure lawyer representing homeowners throughout the Metropolitan New York area who are behind on their mortgages, seeking mortgage modifications, or have been served with notices concerning foreclosures. The office offers free consultations.

The Statute of Limitations Defense

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

https://youtu.be/tIHRQQ2WhdY

Elliot S. Schlissel is a foreclosure lawyer who has been representing homeowners for more than 20 years.  His goal is to keep homeowners in their homes.  He defends homeowners in foreclosure lawsuits and helps his clients in obtaining mortgage modifications.  He and his associates can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.

The 90 Day Notice of Default

foreclosure on Long IslandA recent case in Kings County before Justice Yvonne Lewis sitting in the Supreme Court, Foreclosure Part, deals with the 90 day notice of default. New York Real Property Actions and Proceedings Law Section 1304 requires that a financial institution must serve a 90 day notice accelerating the mortgage and calling it due and payable before a foreclosure proceeding can be initiated.

In this case the bank sought to confirm the appointment of a referee granting a judgment of foreclosure and sale. The lawsuit alleged the defendants defaulted under the terms of the note and mortgage. In addition, the suit claimed it was not a “high cost” or “sub-prime” loan and it was actually a commercial mortgage made to a commercial borrower. The financial institution claimed the mortgage was made for investment purposes.

Bank’s Failure to Serve A 90 Day Notice

The defendant maintained the bank had failed to comply with Section 1304 concerning the serving of a 90 day notice of default. Counsel for the plaintiff presented arguments alleging there was no need for service of a notice of default under Section 1304. They claimed they were exempt from this requirement because this was a commercial loan and not a residential loan. The bank’s position was that Section 1304 only applied to residential mortgages. The defendant contended the loan was a personal loan and the mortgaged property was used as his place of principle residence.

Judge Yvonne Lewis found there was a question as to whether the 90 day notice was required, and if it was required, was it properly served upon the defendant. Due to her concern regarding this issue, she denied the bank’s request for a judgment of foreclosure.

Conclusion

The 90 day notice needs to be served in all residential foreclosure proceedings. The failure of financial institutions to serve it can be plead as an affirmative defense in the defendant’s Answer to a foreclosure lawsuit brought by a bank.New York foreclosure defense lawyer

What To Do After Being Served a Summons and Complaint

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

https://youtu.be/vlIrCAs5oqo

Elliot 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.  He and his associates can be reached by calling 516-561-6645 or 718-350-2802 or by sending an email to schlissel.law@att.net.

When Does a Lender Have Standing To Initiate a Foreclosure Case?

foreclosure defense lawyerA financial institution has standing to foreclose on a mortgage when it is the holder or assignee of the subject mortgage. In addition, the financial institution must be the holder or assignee of the underlying note prior to the commencement of the foreclosure action which is initiated by the filing of the Summons and Complaint in the County Clerk’s office of the County in which the action is initiated. When the note is accepted by the assignee the mortgage passes to the new institution. It should be noted the transfer of a mortgage without the accompanying note does not validly transfer the mortgage.

How the Bank Becomes the Holder or Assignee of the Mortgage

For a bank to obtain standing to initiate a foreclosure lawsuit, it must be the holder or assignee of the note as well as have the original note and mortgage in its possession.

A plaintiff has standing to foreclose on a note if they are the holder of the note under the New York Uniform Commercial Code, if a person has possession of the note by delivery “from a person entitled to enforce it for the purposes of giving the plaintiff the right to enforce it”, the note was assigned to the plaintiff “by a person entitled to enforce it, for the purpose of giving the plaintiff the right to collect the debt.”

Lack of Standing Defense

It is important in every foreclosure case for a defendant to allege the plaintiff, financial institution, doesn’t have standing to bring the lawsuit. At the time the Answer is interposed, the defendant will usually not know whether this is true or not. The defendant will thereafter, through discovery demands to obtain copies of notes, mortgages and other original documents and/or review records at the County Clerk’s office, ascertain whether this defense has any merit to it. However, the way pleadings work in the State of New York, you must plead any potential affirmative defense whether you know the defense is valid or not. Thereafter you try to obtain records during the discovery process to validate your defense.

New York foreclosure defense lawyerElliot Schlissel is a foreclosure defense lawyer representing individuals in foreclosure cases throughout the Metropolitan New York area.

What to Look For In a Foreclosure Attorney

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

https://youtu.be/1pTYooKwgH8

Elliot Schlissel is a foreclosure defense lawyer helping homeowners stay in their homes throughout the Metropolitan New York area.  He and his associates can be reached for consultation at 516-561-6645 or 718-350-2802 or send an email to schlissel.law@att.net.

Court Enforces Mortgage Modification Agreement

foreclosure assistance for long island homeownersIn the case of Brown v. Nationstar Mortgage reported in the New York Law Journal on June 26, 2015, Brown had brought a lawsuit seeking to enjoin the enforcement of a judgment of foreclosure which resulted in the sale of his home. In addition, he sought to stop a proceeding which attempted to remove him from his home after the foreclosure sale had taken place. His lawsuit requested the court rescind the sale of his property and find a mortgage modification agreement he had previously entered into with Nationstar Bank was effective and enforceable.

The court found the only issue which needed to be dealt with, because all of the other relief requested by Brown had previously been litigated, was whether the mortgage modification agreement should be enforceable.

Justice Daniel Barrett found Brown had reasonable notice of the foreclosure proceedings. He stated, however, he was “perplexed by the inactivity concerning this matter.” Mr. Brown had testified he had received a letter from the respondent offering him a mortgage modification. The letter required he sign a mortgage modification agreement and agree to make a payment for the agreement to become effective. He testified that he complied with all of the requirements the bank had requested. In spite of entering into a valid mortgage modification agreement with the bank, a foreclosure sale was conducted and Nationstar Mortgage bought the property. They thereafter served Brown with a 90 day notice to remove himself from the premises.

Mortgage Modification Agreement is Valid and Mortgage Set Aside

Justice Barrett ruled there was a valid mortgage modification agreement because Brown had complied with all of the required terms of the agreement. He then sought to place the parties in the position they would occupy if the agreement was performed pursuant to all of its terms. The judge therefore directed both parties continue to perform under the terms of the agreement and, in addition, there be a two year interest free period.

Conclusion

The entering into of a mortgage modification agreement does not stop lawsuits from moving forward. Banks usually hold the lawsuits in abeyance to see if the terms of the mortgage modification agreement are complied with. However, sometimes the outside counsel representing banks in foreclosure lawsuits have no idea the banks are entering into a mortgage modification agreement. They therefore continue with the foreclosure process which can result in the sale of the home and eviction of the family that lives in the home. To make sure the attorneys representing the bank in the foreclosure proceedings are aware of what is going on between the bank and the homeowner, it is important to provide documentation to the attorneys for the bank with regard to the existence of the mortgage modification being underwritten and being accepted.New York foreclosure defense lawyer

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