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Elliot S. Schlissel is a foreclosure defense lawyer in the Metropolitan New York area. He has been helping homeowners stay in their homes for more than 45 years. Elliot and his associates help their clients obtain mortgage modifications and defend foreclosure lawsuits. Elliot can be reached for consultation at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.
Wells Fargo Bank brought a foreclosure legal action in the Supreme Court of Bronx County. The case was before Justice Mary Ann Brigantti. The defendant in the case, Ali, brought a motion to dismiss Wells Fargo’s Complaint. The motion claimed the residential foreclosure lawsuit was time barred.
The bank had initiated the foreclosure case with an Order of Reference entered in its favor. It had accelerated the mortgage when Ali failed to make payments on the loan. Ali’s moving papers stated the new foreclosure proceeding was not initiated until almost a year after the six year statute of limitations to bring a new foreclosure lawsuit had expired.
Statute of Limitations Defense Waived?
The bank claimed Ali waived the statute of limitations as a defense because he had not plead this defense in his answer. In addition, Wells Fargo’s attorneys claimed the initial acceleration of the mortgage (at the time of the accelerating of the mortgage the statute of limitations begins to run) may not have been valid because at the time it took place, Wells Fargo may not have had standing to commence the lawsuit. This was because the assignment was executed sending the mortgage to Wells Fargo after the lawsuit was initiated. The bank also claimed they revoked the prior acceleration of the loan by voluntarily discontinuing the prior lawsuit without prejudice in 2012.
Judge Brigantti denied Ali’s motion to dismiss. Her decision stated he waived the statute of limitations as a defense because he did not plead it as a defense in his Answer to the bank’s Complaint. In addition, the judge stated Ali did not establish the bank properly accelerated the debt in the prior lawsuit which was discontinued in 2007. Since Ali didn’t prove the acceleration of the debt he cannot argue the statute of limitations was triggered.
Conclusion
It is important to allege a statute of limitations defense in the event there is any possibility six years has elapsed from the initial acceleration of the note and mortgage. The statute of limitations is an extremely powerful defense. This is because it is a complete defense to bringing a lawsuit on the note. If the statute of limitations has expired, the bank’s lawsuit will be dismissed by the court if an appropriate motion is made.
Litigation
Litigation only begins in the foreclosure proceeding after the case leaves the settlement conference area. At that point, there is a stage in the lawsuit called the discovery stage. The discovery stage allows the parties to the lawsuit to request documents, information, and respond to written requests to answer questions called Interrogatories or a Bill of Particulars. It is important that homeowners who have submitted Answers participate in the discovery process. This allows them to obtain information with regard to bank practices, underwriting, and all other issues involved in their transaction with the bank.
The lender can also make discovery demands upon the homeowner. The lender’s discovery demands usually relate to issues raised by the homeowner in their Answer. Another purpose for the lender’s discovery demands is to obtain more information for them to be successful in their foreclosure lawsuit.
Motion Practice
In almost all foreclosure lawsuits, the attorneys for the financial institution at some point bring a motion for summary judgment. In the motion for summary judgment, the attorneys for the financial institution allege the defenses in the homeowners’ Answer are completely without merit. The standard in a motion for summary judgment is to determine whether there is an issue of fact for the court to really look at in the lawsuit.
Summary Judgment
Another way of looking at a motion for summary judgment is that it is a request by the attorneys for the bank to eliminate the homeowner’s Answer, avoid a trial, and go right to judgment. The court will grant the motion for summary judgment if they believe the homeowner has not presented any valid defenses or there is no evidence or documentation to their defenses and/or affirmative defenses.
The Homeowner’s Response To Being Served In A Foreclosure Lawsuit
It is extremely important that the homeowner respond to the foreclosure lawsuit by filing a written Answer with the court and serving it upon opposing counsel. The Answer should contain denials, affirmative defenses, and in the appropriate situations, counter lawsuits against the bank. This is the homeowner’s opportunity to advise the court with regard to the bank’s behavior, the bank’s underwriting process, issues involving robo-signers, issues involving predatory lending, issues involving fraudulent bank action, issues involving violations of the Truth in Lending Law, federal and state banking laws, consumer protection laws, and numerous other issues.
If the homeowner does not file the written Answer as indicated above, it is considered that he has defaulted with regard to the foreclosure lawsuit. This means the homeowner will not get to advise the court that he or she has any defense whatsoever concerning the foreclosure lawsuit.
Consequences of the Homeowner’s Default
As stated above, the homeowner defaulting in the foreclosure lawsuit is a HUGE MISTAKE! This allows the attorneys for the financial institution to bring a motion for an Order of Reference. An Order of Reference is a request to the judge to appoint a referee to do an accounting as to how much is owed to the lender. This would include principle, interest, late charges, attorney’s fees, foreclosure costs, and all other expenses. After the Order of Reference is obtained the financial institution can then bring a motion for an Order asking for a default judgment in the foreclosure and sale of the home.
Sale of the Home in Foreclosure
If the judge signs the Judgment of Foreclosure and Sale, the attorneys for the financial institution then publish a Notice of Sale in a newspaper of public distribution a minimum of 30 days before an auction sale date. Thereafter, the referee can schedule an auction sale of the property. Technically, if the homeowner does not file an Answer to the Summons and Complaint in the foreclosure lawsuit, the attorneys for the financial institution are not required to give notice of the sale to the homeowner. However, even though they may not be required to do so, most law firms bringing foreclosure cases on behalf of banks provide notice to the homeowner of the specifics regarding the sale date, terms and location of the sale.
Citibank 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.
Elliot Schlissel is a foreclosure defense attorney who has been representing homeowners and helping them keep their homes for more than 45 years.
It is common for homeowners on occasion to fall a month or two behind in paying their mortgages. Banks will usually not take any action in these situations. However, if you should fall three or more months behind on your mortgage payments, the bank who holds your mortgage may refuse to accept your mortgage payments in the future unless you pay the total amount of the arrears you owe including late charges and penalties. This is called accelerating the mortgage.
Notices By Banks
Banks will usually provide you with a late notice when you don’t make your mortgage payments. They also may send a letter to you describing options you have with regard to mortgage modifications, deeds in lieu of foreclosure, and short sales.
Negotiations With Lenders
If you are behind on your mortgage, it is recommended you try to negotiate with your lender. Your lender may be willing to enter into a forbearance agreement with you. Forbearance agreements are sometimes given to homeowners when they become disabled or when they suffer a temporary loss of employment. The attorneys at the Law Offices of Schlissel DeCorpo have extensive experience in negotiating with lenders for alternative remedies to be utilized by banks instead of foreclosure proceedings.
If you have a continued inability to make your mortgage payments you may receive a notice of default correspondence from your financial institution. Eventually you will be sent a letter by your lender giving you 90 days notice prior to the start of a foreclosure lawsuit. If you haven’t hired an attorney by this time, it is strongly suggested you hire a foreclosure defense lawyer when you receive this correspondence. The purpose of this letter is to give you one last opportunity to bring your mortgage current by making all back payments before you get served with a foreclosure Summons and Complaint. The foreclosure lawsuit will not start for at least 90 days. This gives you several months to try to rectify the situation with your financial institution.
Foreclosure Lawsuits
After receiving the 90 day notice, the lender may not actually sue you in 90 days. The lender may take several more months to obtain the necessary documentation and paperwork before initiating the foreclosure proceeding.
Bankruptcies
In some situations, filing either a Chapter 7 bankruptcy or Chapter 13 bankruptcy can be helpful to deal with your financial difficulties which put you into foreclosure. The Chapter 7 bankruptcy will eliminate all of your debts including your mortgage obligation. In a Chapter 13 bankruptcy you can catch up on your arrears over a 5 year period while making your current mortgage payments. Unfortunately, if you couldn’t afford your mortgage payments to begin with the Chapter 13 bankruptcy won’t work for you.
Experienced Foreclosure Defense Lawyers
The attorneys at the Law Offices of Schlissel DeCorpo have helped numerous New Yorkers stay in their homes, fight foreclosures and obtain mortgage modifications. Should you fall behind on your mortgage, give us a call and we will set up a free consultation to set up a specific plan to protect you and your family from being forced from your home.
Pressuring Banks to Grant Mortgage Modifications
The negotiations that take place in the foreclosure settlement conference courtrooms, put pressure on the lending institutions to grant mortgage modifications to homeowners. At the first conference meeting, the attorneys for each of the parties introduce themselves and the court referee or magistrate handling the conferences take into consideration each of the parties’ desires to work out non-foreclosure alternatives through negotiations.
After the first foreclosure court conference takes place, the matter is usually adjourned for several months to allow the homeowners to submit a new mortgage modification package. At the adjourned date, the referee looks into whether all the requirements of the mortgage modification submission have been met and/or whether the financial institution seeks more information. This will usually require a second adjournment for several months. These settlement court conference appearances add a significant amount of time to the foreclosure process. Cases can be in the foreclosure conference part for as long as four months to a year.
If the foreclosure conferences do not result in a mortgage modification or other resolution of the underlying issues in the foreclosure case, the court will refer the case out to a regular court part where the litigation will continue.
Conclusion
Foreclosure court conferences give a homeowner another chance to obtain a mortgage modification. It also slows the court procedures down and allows the families who are not going to get mortgage modifications to remain in their homes for longer periods of time.
Fannie 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.
Elliot S. Schlissel is a foreclosure lawyer who has helped hundreds of New Yorkers continue to live in their homes.
Please click on the link below to watch today’s video blog:
Elliot S. Schlissel is a foreclosure lawyer representing homeowners throughout the Metropolitan New York area for more than 45 years. He regularly sues banks to set aside mortgages and help keep his clients in their homes. He and his associates can be reached at 516-561-6645, 718-350-2802 or by email to schlissel.law@att.net.
A “zombie home” is a home which is no longer under the control of the owners, but the foreclosure case is still pending and therefore the bank does not have legal title or possession of the home.
Foreclosed Abandoned Homes
There are communities which have numerous foreclosed homes within them. Sometimes the homeowners abandon these homes. This has a negative effect on the tax base. The other homes in the area have their taxes go up as a result of this action. The abandoned homes fall into disrepair causing the homes surrounding them to lose value. When people drive through an area with abandoned homes, it creates a blight on the neighborhood. Zombie homes are a problem in many neighborhoods throughout the United States. It is estimated that as many as 20% of the homes in foreclosure are vacant.
Proposed New York Program
In States such as New York, where the foreclosure process is long, the issue of zombie homes becomes a larger problem. Attorney General Schneiderman in the State of New York is currently backing an idea of letting communities create land banks for the purpose of buying, refurbishing, and reselling abandoned homes. Attorney General Schneiderman has proposed legislation which would force lenders to maintain a property which has been abandoned after the start of the foreclosure lawsuit.
Maintenance Problems of Abandoned Homes
Homes that are abandoned often have significant maintenance problems. Pipes burst. The wood rots. The lawns sprout weeds. These homes create eyesores and create a blighted effect on the neighborhood.
Syracuse Land Bank Program
Katelyn Wright, the Executive Director of the Greater Syracuse Land Bank, recently stated “studies have shown that they [abandoned homes] have a dramatic negative impact on the property values for the homes in the surrounding vicinity, but also less dramatic but still notable for homes in a several block radius.” Katelyn Wright, as Director of the Greater Syracuse Land Bank, has been involved in dealing with abandoned homes in the Syracuse area. Syracuse experiences as many as 50 new abandoned homes each month. The Land Bank buys many of these homes for a very modest price using State, City and County funding. The homes are then either rehabilitated and put back on the market or, if they are not able to be rehabilitated, they are demolished. This is an example of how one community is dealing with zombie homes.
Elliot Schlissel is a foreclosure attorney who represents homeowners whose homes have been foreclosed on. He helps keep his clients in their homes and advises his clients not to abandon their homes.
