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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

Foreclosure Defense Advice for 2016

foreclosure attorney New YorkIn many parts of the country, the real estate crisis which has caused the high rate of foreclosures is easing. Unfortunately, this is not the case in the Metropolitan New York area. There is expected to be a large flow of new foreclosure cases coming into the courts in 2016. Here is my New Year’s advice for foreclosures which start in the year 2016.

Don’t Ignore the Foreclosure

In my decades of representing homeowners whose homes go into foreclosure, I am shocked by the number of homeowners who simply put their heads into the ground and ignore the fact that their financial institution is taking legal action against them. There are many things that can be done to stop foreclosures from moving forward, to obtain mortgage modifications, to get banks to pay attention to your situation, to tie cases up in court and to challenge the appropriateness, the standing, the basis of the lawsuit and to move to set the mortgage aside. Do not be an ostrich if your home is going into foreclosure. Obtain the legal services of a competent, experienced foreclosure defense attorney.

Look Into Your Legal Options

As stated in the prior paragraph, ignoring the situation is not a smart option to take. If you haven’t applied for a mortgage modification, apply for one. God helps those who help themselves. The worst that can happen is you will get turned down.

Disaster Situations

If you have been subject to a natural calamity or disaster, which has caused a hardship for you or your family, contact your lender and put them on notice of the situation. They may be able to provide you with a forbearance agreement to help you get on your feet.

Refinancing the Loan

If your mortgage loan is not working out for you, before you fall far behind look into the possibility of refinancing your mortgage. Don’t wait until you are many months behind to consider this option. By then it will be too late!

Sell Your Home

If your home has equity in it, and you can’t afford it, selling your home is an option. You can sell the home and keep the equity which exists in your home. Although many homes are going into foreclosure in the Metropolitan New York area, real estate values are increasing. Your home may be worth more than you think it is worth. This is something you should look into.

Bankruptcy

Bankruptcy should be the last option you look into, not the first. There are two types of bankruptcies a homeowner can file. A Chapter 13 bankruptcy is a repayment plan which can help you become current on your existing mortgage over 5 years. A Chapter 7 bankruptcy eliminates the personal obligation on your debt. The filing of either of these bankruptcies creates an automatic stay received from a federal court. This stops foreclosure lawsuits from going forward during the pendency of the bankruptcy.foreclosure defense lawyer

Notable Foreclosure Cases of 2015

foreclosure attorneyThere are two significant foreclosure cases in 2015 which have a broad impact on foreclosure lawsuits. The first of these two cases is Faison v. Lewis. In this case the New York Court of Appeals, the highest court in New York State, held that when bringing a lawsuit to set aside a mortgage due to forgery in the chain of title there is no statute of limitations.

Statute of Limitations Defense

In the Faison case an action was brought by a homeowner to set aside a mortgage claiming the deed was forged. The financial institution involved plead the usual six year statute of limitations defense had passed since the deed was prepared. They also claimed that more than two years had passed since the homeowner discovered the alleged forgery.

The sum and substance of the court’s decision is that a forgery creates no rights with regard to the deed involved. Therefore there is no point in time that limits the challenge to the document. Homeowners who have been involved in transactions involving fraudulent documents applaud the court’s decision. It eliminates time barred defenses of the statute of limitations which can be raised by financial institutions.

United States Supreme Court Case

The second case of importance to homeowners decided in 2015 was the case of Jesinoski v. Countrywide Home Loans. This decision was made by the United States Supreme Court, the highest court in America. In this unanimous decision, the United States Supreme Court decided a significant issue under the Truth in Lending Act (hereinafter referred to as “TILA”). In this landmark decision, the United States Supreme Court held that all that is needed to be done to rescind a mortgage loan was to send a letter within three years from taking the mortgage out requesting the mortgage be rescinded. Up until this decision it was thought the only way to rescind a mortgage under TILA within the three year period was to commence a lawsuit seeking to rescind the loan on the basis of failure to conform to the disclosure requirements of TILA.

Homeowners now, who feel that there has been a violation of TILA by a lending institution, can simply send a letter to the lending institution rescinding the loan. Starting a lawsuit to set aside the mortgage loan is no longer necessary.

Conclusion

The Faison case decided by the New York State Court of Appeals and Jesinoski case decided by the United States Supreme Court in 2015 further increased the arsenal of defenses and actions that can be used regarding defending foreclosure lawsuits. Foreclosure defense lawyers continue to challenge the mistakes, frauds, omissions, false applications, bait and switch tactics, robo-signers, bad assignments, statute of limitations issues, failure to give notice issues, violations of State and Federal laws, violations of banking laws, violations of Truth in Lending Laws, violations of predatory lending laws, and numerous other defenses in helping keeping beleaguered homeowners in their homes. I look forward to continuing with this process.foreclosure defense lawyer

Zombie Homes

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

https://youtu.be/-_h4DA8o_fU

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.

Long Island Foreclosure Rates Continue to Climb

foreclosure defense attorney on Long IslandForeclosure rates for both Nassau and Suffolk Counties, on Long Island, are the highest in New York State. Approximately 3% of the homes in Suffolk County are in foreclosure. In Nassau County, approximately 2 ½% of all homes are in foreclosure. There are more than 27,000 pending foreclosure cases in Nassau and Suffolk Counties.

The Housing Crisis

The housing crisis has hit Long Island homeowners harder than homeowners in other areas of the State. Superstorm Sandy contributed to this problem by devastating many homes on Long Island. Thomas DiNapoli, the Comptroller of New York State, recently stated “if you are on Long Island and you have a huge mortgage, based on a price that no longer was attainable, you could easily get ‘underwater’.” Underwater refers to homes which owe more money on their mortgages than the home is worth.

While in many other areas in New York State the foreclosure crisis is easing, it continues to get worse in both Nassau and Suffolk Counties. In January of 2015, the number of homes going into foreclosure in Nassau County jumped by almost 20%. Some of this increase in homes being foreclosed upon was related to the delayed impact of Superstorm Sandy, which hit Long Island in 2012, has had on homes going into foreclosure. In the State of New York, approximately 1 in every 90 homes is in foreclosure. While in Nassau County 1 out of every 40 homes are in foreclosure, and in Suffolk County 1 out of every 35 homes are in foreclosure. Comparing this to the foreclosure rate in New York City which has only 1 out of every 116 homes in foreclosure shows the huge problem faced by homeowners in Nassau and Suffolk Counties.New York foreclosure defense lawyer

Statutes of Limitations Defenses To Foreclosure Lawsuits

foreclosure defense for homeownersIs it possible to stop paying your mortgage, and live in your home for many years, and stop the bank in its tracks from forcing you to make payments to them or successfully foreclosing on your home? The answer to this question is yes! If your bank fails to sue you, in the State of New York, for a period of six years from the time they accelerated the mortgage, you have a complete legal defense to the foreclosure lawsuit. This defense is known as the statute of limitations. If you plead this defense in your Answer to the Summons and Complaint you can take action to have the bank’s foreclosure lawsuit dismissed!

Defense Available to Thousands of Homeowners

It is estimated there are thousands of homeowners who have not made mortgage payments in the past six years in the State of New York, who have this defense available to them when they are sued in foreclosure. There are a variety of reasons that have caused the banks to delay in bringing foreclosure lawsuits. The federal government has made 69 separate changes to its mortgage modification programs. This has forced lenders, on numerous occasions, to withdraw previous offers to homeowners and extend new terms. This ties the house up in a pre-foreclosure situation for long periods of time.

In addition, many banks have poor practices with regard to maintaining their records concerning mortgages on homes.

Seven Million Foreclosures In America

It is estimated there have been approximately seven million homes foreclosed upon in America since 2006. In addition, there are approximately another one million homes which will go into foreclosure at some time in the next few years.

I personally see cases where there are valid statute of limitations defenses which can be plead in the Answers for my clients. In many of the cases which our office handles the lenders themselves are to blame for a case not moving forward in a foreclosure proceeding for six years.

Owning a Home For Free

Recently, Judge Michael B. Kaplan sitting in a United States Bankruptcy Court in Trenton, New Jersey, wrote an opinion reflecting about the foreclosure crisis. This judge had previously written “no one gets a free house.” In his recent decision Judge Kaplan stated “with the proper measure of disquiet, and chagrin, this court now must retreat from this position.”

Conclusion

One of the first things every foreclosure defense lawyer must look for when a client comes to their office whose home is in foreclosure, is whether a statute of limitations defense can be plead in their Answer.New York foreclosure defense attorney

Court Denies Bank Default Judgement and Appointment of Referee

foreclosure assistance for long island homeownersHomeowners had originally taken out a mortgage with Countrywide Mortgage Company. Countrywide assigned the mortgage to Bank of New York Mellon. Bank of New York Mellon brought a foreclosure lawsuit in Kings County, New York. The foreclosure proceeding was based on the fact the homeowners had failed to make their payments pursuant to the terms of the mortgage.

Non-Party to the Lawsuit Opposes Foreclosure

Rivera, claiming he was not a defendant or a party to the lawsuit but nevertheless an interested party based on his ownership of Ozone Park Management, submitted an affidavit opposing Bank of New York Mellon’s application for a default judgment and appointment of a referee. Justice Francois Rivera sitting in the Supreme Court Part in Kings County which deals with foreclosure lawsuits, found Rivera, a non-party to the lawsuit, had failed to bring a cross-petition for leave to intervene in the case. Since he was not a party to the lawsuit and didn’t intervene in the litigation, his affidavit in opposition to Bank of New York Mellon’s motion could not be considered by the court.

Court Denies The Bank’s Motion

Justice Rivera found the Complaint in the lawsuit was verified by the attorney for the bank. Since it was not verified by a bank officer with knowledge of the transaction, the affidavit of the attorney did not meet statutory requirements. In addition, an affidavit of merit which was submitted from Ussery, an individual representing New Penn Financial, the servicing agent, also did not provide information with regard to what relationship this entity had with Bank of New York Mellon. In addition, the court found the moving papers did not provide documentary evidence showing New Penn Financial even had the authority to make a presentation on behalf of Bank of New York Mellon. Based on the aforementioned, Justice Rivera denied the application for a default judgment and the appointment of a referee brought by the bank.

Conclusion

If you hire a foreclosure defense attorney who digs deep enough, they sometimes find mistakes, omissions, failures to provide appropriate information and other defenses which can be utilized to cause the foreclosure lawsuit to be dismissed.New York foreclosure defense attorney

Unfair Lending Practices

foreclosure defense lawyersThere are a variety of federal and state statutes which can be utilized by homeowners to fight foreclosure lawsuits. These laws were enacted to protect homeowners from illegal or improper practices by financial institutions. There are two federal laws designed to protect homeowners against unfair lending practices. These laws specifically deal with residential mortgages. The first statute is the Truth in Lending Act. This law is sometimes referred to as “TILA”. The second statue designed to protect homeowners is the Home Ownership and Equity Protection Act. This statute is often referred to as “HOEPA”. Both of these federal statutes give a homeowner the ability to sue for monetary damages. In addition, homeowners can also sue for financing costs paid by them. Under some circumstances both of these statutes allow a homeowner to have the mortgage canceled. If the mortgage is canceled, the foreclosure lawsuit will come to an end if the homeowner can make arrangements to refinance the balance of the principle due to the lender.

Rescission of a Loan

Rescission of a loan means canceling the loan. There is a concept under TILA of retroactively canceling or rescinding a loan. The technical term for this is extended rescission. A lender has to give you three days notice under certain circumstances to rescind or cancel a loan. However, your right to rescind or cancel the loan can be extended up to three years if you can show the lender violated portions of TILA. The three year period can be extended even in the event a foreclosure lawsuit has been initiated. This means in a foreclosure lawsuit if you can show a material violation of either TILA or HOEPA you can cancel the loan and by taking this action you can be successful in defending the foreclosure lawsuit. It should be noted the most common types of loans covered by either TILA or HOEPA are refinanced loans and HELOCs.New York foreclosure defense attorney

The Response To Being Served With A Summons And Complaint: The “Answer” – Part II

foreclosure lawyer“Counterclaims”

In addition to denying the allegations and submitting affirmative defenses, the homeowner can countersue the financial institution within the confines of the foreclosure lawsuit. These counter lawsuits are referred to as counterclaims. An example of a counterclaim would be a request to quiet title based on some fraudulent activity. This basically means you wish to set aside the mortgage because of fraudulent activity. Counterclaims can also be related to monetary damages based on filing a false lis pendens which damaged the title to the homeowner’s home. There are other possible counterclaims which can be brought.

Default

Homeowners who do not submit an Answer to the court and the plaintiff’s counsel default with regard to the lawsuit. This allows the attorney for the bank to take a default judgment against the homeowner. The default judgment basically indicates the homeowner did not contest the lawsuit and the bank is entitled to all of the relief requested in their Complaint. When a financial institution receives a default judgment they can move much quicker to take action to cause the home to be sold at auction. The default will also allow the bank to obtain a deficiency judgment if they plead it in their Complaint should the proceeds of the sale of the home not satisfy the balance due in the note and mortgage.New York foreclosure defense attorney

New Precedent Regarding the Lack of Standing Defense in Foreclosure Lawsuits

foreclosure defense for Long IslandersOne of the most potent defenses a homeowner has in a foreclosure lawsuit is based on the concept the financial institution bringing the lawsuit is not the rightful owner of the note and mortgage at the time the lawsuit was commenced. The legal terminology regarding this situation refers to the fact the financial institution lacked standing to bring the lawsuit. When this affirmative defense is alleged by the attorney for the homeowner, the lender now has the burden of proving it actually was the rightful owner of the note and mortgage at the time the lawsuit was initiated. In other words, the financial institution must show it was the appropriate institution to bring the foreclosure lawsuit.

Pleading Lack of Standing As An Affirmative Defense

The homeowner in a foreclosure lawsuit, up until now, needed to plead the affirmative defense of lack of standing in their Answer. If they did not specifically plead the lack of standing affirmative defense, courts have traditionally taken the position the homeowners have waived their right to allege this defense. This means the financial institution did not have to meet the burden of establishing it was the proper party at the time the lawsuit was initiated to bring the foreclosure proceedings. New York Civil Practice Law and Rules section 3018(b) which is entitled “Responsive Pleadings” states “[a] party shall plead all matters which if not plead would be likely to take the adverse party by surprise or would raise issues of fact not appearing on the face of a prior pleading.” This section of the law requires defendants in all lawsuits to plead whatever defenses they feel are appropriate. If defendants in civil lawsuits do not plead their defenses, they simply waive them.

Appeals Court Decision May Have Changed the Law

Recently the Appellate Division of the Second Department, an appeals court, has rendered a decision which may change the law with regard to a homeowner raising the issue of standing in a mortgage foreclosure lawsuit as a defense. In the case of U.S. National Association v. Faruque, 120 A.D.3d 575, 991 N.Y.S.2d 630 (2d Dept. 2014) they placed the issue of standing before a court even though it was not alleged in the homeowner’s pleading.

In the Faruque case the appeals court departed from prior legal precedents. In the Faruque case the bank started a foreclosure lawsuit. The homeowner submitted an Answer which stated they “specifically denied that the note was delivered to the plaintiff or that an assignment” from the originating lender to the plaintiff “had been recorded.” Although this allegation contained elements of the lack of standing defense, the homeowners did not plead the bank had lacked standing to bring the lawsuit. In this case the court held the homeowner “was not required to plead lack of standing as an affirmative defense.” The court went on to state “in order for the plaintiff to be entitled to relief, it had to prove its standing.”

The court in the Faruque case rendered a decision whereby the financial institution did not meet its burden under the circumstances of the case because it “did not establish that the note was physically delivered to it prior to the commencement of the action.”

Best Practice

Whether the Faruque case will change the case law in the State of New York to assume a lack of standing legal defense is questionable. The best way for a homeowner to submit the most potent Answer in a foreclosure lawsuit is to plead the affirmative defense of lack of standing. This creates a problem for the bank in the case. The bank then must prove they actually were the legitimate owner of the note and mortgage at the time of initiation of the foreclosure lawsuit.New York foreclosure defense attorney

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