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.

The Home Affordable Mortgage Program (“HAMP”) Does Not Work Well

loan modification lawyerPresident Obama established the HAMP program in 2009. The purpose of the program was to help 4 million mortgage holders who were in financial difficulty. However, a recent report by Christie L. Romero who was authorized by the Obama administration to monitor the program indicates the program has not accomplished its goal. The report indicated during the six years after the HAMP program was established 887,000 home owners are participating in loan modifications. The purpose of these loan modifications is to reduce the monthly costs of the mortgage to allow the homeowner and their families to continue to reside in their residence.

4 Million HAMP Mortgage Modifications Turned Down by Banks

The report indicates that instead of helping the 4 million borrowers obtain loan modifications, banks participating in the program have rejected more than 4 million borrowers’ requests for mortgage modifications. 72% of all applications for mortgage modifications have been denied. The report indicates there are two major flaws in the program. The first is the HAMP program is a voluntary program for banks. The second major flaw of the program is that banks who participate in the program process all applications based on whatever standards they decide to set up. The report on the HAMP program indicates that if you apply to CitiMortgage for a loan modification you only had a 13% chance of success. If you applied to Chase Manhattan Bank you had approximately a 16% chance of success, and if you applied to Bank of America, you had only a 20% chance of being successful.

Incomplete Mortgage Modification Applications?

The banks involved in the program claim there are numerous reasons why so many mortgage loan modifications are declined by them. They claim that in almost 40% of the cases the homeowner either does not fill out the application completely or provide the requisite documents. My office’s experience is that the banks lose or misplace the applications and the documentation even if it is provided to them several times.

HAMP Applications Rejected Without Just Cause

The report by Ms. Romero indicates that the Treasury Department is responsible for making sure that banks involved in the HAMP program are not rejecting homeowner’s requests for mortgage modifications without just cause. However, Ms. Romero says that is not taking place. She stated “we are constantly seeing problems with the way servicers are treating homeowners and are not following the rules.” She went on further to state “I don’t understand why there hasn’t been a stronger policing from the Treasury on servicers.”

Wrongful Denial of Mortgage Modifications

Jacob Inwald, the Director of Foreclosure Prevention at the Legal Services NYC which represents troubled homeowners, recently stated “virtually never does one get a loan modification application evaluated the first time.” He went on further to state “we deal with these issues every single day. It requires constant push back and challenging wrongful denials.”

There are a variety of reasons why banks are turning down mortgage modifications. However, before they are rejected the homeowner must get through the process. The process which should be relatively quick and efficient is not. Instead it can take many months and numerous requests to provide banks with the same documents over and over again before a mortgage loan modification application can be viewed by the financial institution. The delaying of the prospective homeowner’s mortgage loan modification request can be profitable for a financial institution. The more time that is involved in the modification process, the more interest, penalties and fees the bank can charge the homeowner. This can cause a drastic increase in the amount owed on the mortgage.

Conclusion

My office has been involved in scores of situations involving homeowners who have fallen behind on their mortgage. It is my experience the HAMP program very rarely works appropriately. Homeowners who apply for mortgage modifications must document everything they submit to the bank making sure it is in writing. I suggest mortgage modifications be sent to banks by email and be sent by certified mail, return receipt requested. All follow up on the application should be done in writing either by regular mail or by email. This helps build a case in the event the bank fails to act in good faith with regard to the mortgage modification.New York foreclosure defense lawyer

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.

Rescission of a Loan

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

https://youtu.be/UU2gtDLgo2k

Elliot S. 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.

Truth in Lending Violations As a Defense

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

https://youtu.be/yuiEqLNefHw

Elliot S. 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.

The Rise of Non-Bank Mortgage Servicing Companies – Part I

There has been an explosive rise in the number of mortgages serviced in the United States by non-bank mortgage servicing companies. Mortgage servicing companies don’t offer checking accounts or savings accounts. They are simply hired by financial institutions to process payments and perform various administrative banking tasks that are commonly referred to as “servicing”. These non-bank institutions in the year 2014 are servicing a larger and larger portion of all mortgage loans in the United States. Non-bank mortgage servicing companies operate under a different regulatory scheme than banks. They are subject to considerably less scrutiny with regard to their practices.

Alarm About Non-Bank Servicing Companies

A number of homeowner complaints concerning large non-bank servicing companies are growing at a significant rate. The largest non-bank mortgage servicing companies are Ocwen Financial Corporation and NationStar Mortgage. These two mortgage servicing companies, pursuant to the Consumer Financial Protection Bureau, accounted for 4,658 complaints from consumers in the year 2014. This was a dramatic increase in the number of consumer complaints from previous years.

Benjamin Lawsky, Superintendent of New York’s Department of Financial Services, recently stated that behind every troubled mortgage loan is “a family, a person, and it’s usually someone struggling to make ends meet”. Long Island is a great example of that. We have lots of homes under water and people who need loan modifications.

Transferring of Mortgages

The servicing of mortgages is not a simple business model. Each and every time the mortgage gets transferred from one bank to another or one servicing agency to another, there is potential for mistakes and errors which can result in putting the homeowner into financial turmoil. There have been numerous cases of individuals whose mortgages have been transferred from one servicer to another that have had their lives turned upside down by the mistakes made by these agencies.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

Defense to Foreclosure Lawsuit: The Mortgage Company Made a Mistake – Part II

help for homeowners facing foreclosureFinding Errors By The Bank’s Servicing Organization

You should maintain organized records with regard to all transactions concerning financial institutions who hold your mortgage and their servicing organizations. There is a federal statute called the Real Estate Settlement Procedures Act. It is commonly referred to as “RESPA”. This provides you with a manner in which you can challenge many of the types of errors and improper practices engaged in by banks and their servicing organizations. It also gives you an ability to obtain the information necessary to make challenges.

To obtain the information under the RESPA law you should send the servicing organization by certified mail, a written request identifying you as the homeowner who entered into the loan and the account and information regarding the loan. The servicer has a legal obligation under the RESPA statute to notify you within 5 business days of their receipt of your qualified written request acknowledging your request was received by them. Thereafter they have 30 business days to provide you the information you requested be produced or explain to you in writing why it cannot be produced. If it cannot be produced they must provide you with the name and contact information of an individual with whom you can follow up to obtain this information. It should be noted the 30 business days to comply with your request can be extended by 15 business days if the servicing organization gives you written notification within the 30 day period of their request for an extension and the reasons why they are requesting this extension. Once you have made this request and the servicer is working on a response, they cannot report to a credit bureau information regarding alleged overdue payments that relate to the information contained in your request. If you should request this information after the foreclosure lawsuit has been initiated it will continue during the term that the request is being processed. In the event the servicing organization you requested the information from is no longer the servicing organization and there is another servicing organization which has replaced this servicing organization your written request must be sent not more than one year after the transfer to the new servicing organization.

Statutory Damages

Should the servicer fail to comply with your request, you can take legal action against the bank and you are entitled to $2,000 in statutory damages plus reimbursements for all of your attorney’s fees and in addition you are entitled to be compensated for any other losses or damages you might have. Unfortunately, due to the lobbying efforts of banks, this remedy will not cause the foreclosure action to stop or have any impact on the foreclosure lawsuit.New York foreclosure defense attorney

The Lack of Standing Defense in Foreclosure Lawsuits – Part II

loan modification lawyerPresenting the Lack of Standing Issue to the Court

To start with, the lack of standing must be plead as an affirmative defense in the homeowners’ Answer. The homeowner can thereafter during the discovery portion of the case demand documentation from the financial institution of the chain of assignments which led them to bring this lawsuit. If the bank cannot produce documentation of this chain of assignments the homeowner can make a motion to dismiss under New York Civil Practice Law and Rules section 3211. The homeowner, in their moving papers to dismiss the lawsuit, must make the argument the financial institution bringing the lawsuit is not a valid holder of the note and mortgage and/or there is an issue concerning one or more of the assignments in the chain of assignments.

Lack of Standing Arguments

Many homeowners who come into my office have researched on the internet and through other sources the issue of standing and seek to submit a lack of standing argument to the court. However, the technicalities of bringing a motion to dismiss under section 3211 of the New York Civil Practice Law and Rules and the manner in which the motion needs to be presented to the court generally requires an expertise which is beyond the ability of most homeowners. The best way to assert and/or prove a lack of standing argument for the purpose of getting a foreclosure case dismissed is to hire an experienced foreclosure defense lawyer to make these arguments for you.New York foreclosure defense attorney

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

foreclosure defense lawyerWhen homeowners are served with a Summons and Complaint they must file a response to that Summons and Complaint. The response is referred to as an “ANSWER“. There are very specific and detailed requirements as to what should be contained in the Answer submitted by the homeowners.

To start with, the Answer should include a response to each and every numbered paragraph and claim made by the financial institution in its Complaint. The paragraphs in the homeowners’ Answer should be numbered. The numbered paragraphs in the homeowners’ Answer should respond to the numbered paragraphs in the financial institution’s Complaint. The homeowner can either admit the allegations, deny the allegations, or deny knowledge or information sufficient to either admit or deny the allegation contained in the numbered paragraph of the financial institution’s Complaint.

The attorneys for the financial institution must prove all of the allegations in their Complaint which are either denied or which the homeowner denies knowledge or information sufficient to form a belief as to the truthfulness of the allegation contained in that paragraph. The paragraphs which are either admitted or not denied by the Answer of the homeowner are deemed admitted and the bank will not have to prove the truthfulness of those allegations at the time of trial.

Affirmative Defenses

In addition to either admitting, denying, or denying knowledge or information about the allegations in the specific paragraphs of plaintiff’s Complaint, the homeowners can assert affirmative defenses in their Answer with regard to the foreclosure lawsuit. An affirmative defense is basically a legal argument as to why the bank should not be allowed to be successful in prosecuting the lawsuit. Examples of affirmative defenses can deal with the fact the mortgage is actually current, and not overdo; that documents were signed by robo-signers; the homeowner was fraudulently induced into taking the loan; the financial institution violated Federal Truth in Lending Laws, New York State banking laws or Federal banking laws, the Fair Debt Collection Practices Act; predatory lending issues; bad assignments; lack of standing to bring the lawsuit; failure to serve a 90 day notice; failure to adhere to all types of procedural foreclosure requirements and many, many other affirmative defenses.

The Answer to the bank’s Complaint must be sworn to by the homeowners and acknowledged before a Notary Public. Thereafter a copy of it must be served on the attorney for the bank. The homeowners must file a copy of the Answer with the court and the bank’s lawyers. The Answer must have attached to it an Affidavit of Service of the Answer on the bank’s attorneys.New York foreclosure defense attorney

Foreclosure Defense in Valley Stream, Lynbrook, Baldwin, Malverne, Freeport, Oceanside, Long Beach, Elmont, Lakeview, West Hempstead, Hempstead, Merrick and Bellmore, New York

We represent individuals throughout the New York Metropolitan area with divorce and child custody, personal injury, car accident, wrongful death, estate administration, nursing home and medicaid issues

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.

This is attorney advertising. This website is designed for general information purposes only. The information presented on this website shall not be construed to be legal advice. If you have a legal problem you should consult with an attorney.

Copyright © 2018 By The Law Offices of Schlissel DeCorpo. All Rights Reserved. Concept, Design and Hosting by GetLegal Web Development Team.