New York foreclosure defense lawyers

Court Bars Collection of Interest and Fees on Loan For Failure of Mortgage Company to Negotiate in Good Faith

April 22, 2014 by Elliot S. Schlissel

Justice Kenneth Sherman sitting in the Supreme Court Foreclosure Part in Kings County recently had a case before him involving what he felt was the bank’s failure to negotiate in good faith at the mandatory foreclosure settlement conferences. A special referee had written a report requesting all interest be tolled on a loan provided by American Home Mortgage Servicing (hereinafter referred to as “AHMS”) and they be further barred from collecting attorney’s fees related to their initiating a foreclosure legal action. Judge Sherman acknowledged receipt of the report and scheduled the matter for a hearing to decide if American Home Mortgage Servicing had engaged in bad faith negotiations at the mandatory foreclosure settlement conferences.

Statute Requires Good Faith Negotiations

Judge Sherman noted mandatory settlement conferences were required with regard to all foreclosure lawsuits brought concerning residential mortgages. In this case, the defendant was a resident of the property that was being foreclosed on. The enabling statutes creating the mandatory residential foreclosure conference parts mandated all parties negotiate in good faith at these foreclosure settlement conferences. Judge Sherman stated in his decision American Home Mortgage Servicing was represented by an attorney at the settlement conferences. However, the attorney for American Home Mortgage Servicing did not have the appropriate contractual authority to negotiate a loan modification in good faith which would resolve this foreclosure proceeding. The court specifically stated in its decision that on April 23, 2009, and on October 5, 2010, the attorneys for American Home Mortgage Servicing failed to appear by an attorney who had actual knowledge, ability and authority to negotiate a mortgage modification in a meaningful manner. Therefore the Judge ruled AMHS did not comply with New York Civil Practice Law and Rules Section 3408(c). This statute requires all parties to foreclosure court conferences negotiate in good faith. The court therefore barred AHMS from collecting any claimed interest, penalties and attorneys’ fees or costs incurred from the loan from April 23, 2009 to October 5, 2010.

Conclusion

Financial institutions are legally obligated under New York law to negotiate in good faith for the purpose of working out mortgage modifications at the mandatory foreclosure court conferences. Financial institutions who are represented by attorneys who have no real authority to work out reasonable loan modifications can be considered to have acted in bad faith, and in violation of New York State law.

Elliot Schlissel is one of the leading foreclosure defense attorneys in the Metropolitan New York area. For more than 45 years he has helped his clients fight foreclosure proceedings, obtain mortgage modifications and continue to live in their homes. He offers free consultations to all prospective clients.

Bank Fails to Prove it Has Standing on Date Foreclosure Action Started

April 17, 2014 by Elliot S. Schlissel

Justice David Schmidt, sitting in the Supreme Court Foreclosure Part in Kings County recently had a case before him concerning a foreclosure on a home where the defendant submitted a lack of standing defense. The foreclosure action was brought by US Bank as the trustee for Morgan Stanley Mortgage Loan Trust (hereinafter referred to as “MSMLT”). During the course of this proceeding, the attorneys for MSMLT brought a summary judgment motion against the defendants. (A summary judgment motion is a motion that alleges there are no questions of fact concerning the issues in the case and therefore the moving party should be entitled to judgment without the necessity of having the case go to trial).

The defendants submitted seven affirmative defenses in their answer. One of those affirmative defenses alleged the bank lacked the standing to bring this foreclosure lawsuit.

Lack of Standing

MSMLT argued that the defendants defaulted on the note due to the failure to make timely mortgage payments. The defendants had not made mortgage payments for a period of two years before MSMLT had started the lawsuit to foreclose on the their home. MSMLT alleged in their pleadings they were the holder of the note and mortgage which had been endorsed in blank and delivered to them before the lawsuit was initiated.

Justice David Schmidt denied the plaintiff’s application for summary judgment. He took the position the attorneys for MSMLT had failed to offer evidence of their standing to bring the foreclosure proceeding against the defendants. They failed to prove they had the note at the time of the commencement of the action. Judge Schmidt found there were triable issues of fact regarding delivery of the note from the original lender and endorser, Hemisphere National Bank, to MSMLT. The court further stated in its decision MSMLT made conclusory statements it had “continuous possession” of the note. These conclusory statements were not sufficient to establish standing in the eyes of the judge. The judge ruled plaintiff’s allegations that equated the possession of the note with the Uniform Commercial Code’s requisite delivery requirements was not convincing and therefore he denied the motion.

Conclusion

In each and every foreclosure lawsuit, the attorneys for the homeowners should allege a lack of standing defense. Our office has had numerous cases where banks have been unable to successfully foreclose on our client’s property due to their failure to prove they had standing to initiate the foreclosure lawsuit.

Elliot S. Schlissel is one of the leading foreclosure lawyers in the Metropolitan New York area having helped scores of his clients to stay in their homes and fight foreclosure lawsuits.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure attorney, foreclosure defense, foreclosure defense attorneys, New York foreclosure attorney, New York foreclosure defense lawyers

New Mortgage Rules’ Negative Impact on the Housing Industry

April 3, 2014 by Elliot S. Schlissel

foreclosure defense attorney There are new rules which affect financial institutions involved in the mortgage business in the United States. Lenders have to be able to verify the individuals they loan money to can repay their home mortgages. This is pursuant to the new rules designed by the Consumer Financial Protection Bureau under the Dodd- Frank Law that regulates Wall Street.

New Consumer Protection Laws

Under the new consumer protection laws, banks have to take into consideration a variety of factors when making mortgage loans. Included in these factors are the income of the borrower, the financial health of the borrower, the borrower’s credit history, and his or her other debts. The purpose of the reform law is to prevent the meltdown in the home mortgage industry that took place between 2000 and 2009 which caused millions of Americans to have their homes sold in foreclosure sales. The new statutes seek to prevent lenders from engaging in loaning funds for home mortgages to individuals who simply cannot afford to pay back the loans.

Other Aspects of The New Consumer Protection Laws

The law deals with a homeowner’s ability to pay their mortgage has created a lot of concern for financial institutions. Mortgage lenders are concerned if the homeowners fail to make their mortgage payments and their homes are foreclosed on by banks they will claim in the foreclosure actions the financial institutions had known or should have known that they couldn’t afford to make the mortgage payments under these loans.

New Regulations Affect Low Income Prospective Homeowners

Experts in the mortgage industry are claiming the new regulations will make it very difficult for low income prospective homeowners to qualify for mortgage loans. They claim the new regulations will give the banks less flexibility in working with low income mortgagors. The regulations also regulate mortgage servicing companies.

Elliot S. Schlissel is a foreclosure lawyer representing homeowners facing foreclosure lawsuits throughout the Metropolitan New York area.

Filed Under: Foreclosure Defense Tagged With: defective mortgages, foreclosure attorney, foreclosure crisis, New York foreclosure attorney, New York foreclosure defense lawyers

Judgment of Foreclosure and Sale Vacated The Case To Be Brought Back to the Foreclosure Settlement Part

April 1, 2014 by Elliot S. Schlissel

foreclosure defense lawyer JP Morgan Chase had initiated a foreclosure legal action and had been granted summary judgment. In addition, a referee was appointed to compute with regard to the sale. The property never was sold at auction. JP Morgan Chase thereafter brought a proceeding before Justice Francesca Connolly in Westchester Supreme Court requesting the Order of Reference and Judgment of Foreclosure and Sale be vacated. They took this action because they claim they were unable to comply with Administrative Order 431-11. Justice Connolly granted JP Morgan Chase’s unopposed application. The Order of Reference and Judgment of Foreclosure and Sale were vacated. Thereafter, Chase brought a motion for summary judgment again and for another Order of Reference. The court decided the defendants were entitled to have the matter sent back to the foreclosure settlement conference part.

Since the property involved was residential which was occupied by the owners of the property, and the action was started before September 1, 2008, and a final judgment had not been entered, it was appropriate that the defendants had a statutory right to request the matter be sent back to the foreclosure conference part to try to settle the matter with the bank.

Elliot Schlissel is a foreclosure lawyer with more than 45 years of legal experience, who has successfully represented homeowners throughout the Metropolitan New York area in foreclosure lawsuits.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: foreclosure defense, foreclosure defense attorneys, foreclosure proceedings, New York foreclosure attorney, New York foreclosure defense lawyers

Foreclosure Case Dismissed: Bank Does Not Obtain Personal Jurisdiction Over The Defendant

March 20, 2014 by Elliot S. Schlissel

foreclosure defense attorney Justice Frances Francois Rivera sitting in a Supreme Court Part in Kings County recently had a case involving JP Morgan Chase Bank and a Mr. Birica. JP Morgan Chase Bank had started a foreclosure lawsuit in Kings County. The lawsuit claimed that Mr. Birica was the owner of the property involved in the foreclosure. It further stated in the Summons and Complaint he was also the individual who executed the personal loan documents and mortgage documents with regard to the property. The attorneys for JP Morgan Chase took the position Mr. Birica had defaulted on his payments with regard to the mortgage.

Vacating the Default Judgment

Mr. Birica brought an application to vacate the default and he submitted a Notice of Appearance and Verified Answer to the Complaint in the foreclosure lawsuit brought by JP Morgan Chase. In addition, he brought an application to dismiss JP Morgan Chase’s Complaint based on the theory that Chase lacked legal standing to bring the lawsuit and they had failed to properly serve the Summons and Complaint in the foreclosure proceeding on her.

The attorneys for Birica submitted a motion to the court which claimed she did not receive a copy of the Summons and Complaint in a timely manner. She therefore was unable to answer it. She claimed she resided in Rye, New York and the Summons and Complaint was served to an address in Queens, New York. The attorneys for Chase presented documentation that their process server had served Birica at an address in Rego Park by delivering a copy of the Summons and Complaint to her daughter and by thereafter mailing a copy to the address in Rego Park.

Judge Francois Rivera in ruling on the applications made by the attorneys for Birica found JP Morgan Chase did not meet its burden of proof establishing the Summons and Complaint in the foreclosure proceeding were properly delivered or mailed to Ms. Birica’s dwelling. He therefore dismissed the foreclosure lawsuit.

Conclusion

Financial institutions are held to a very high standard with regard to obtaining personal jurisdiction of individuals in foreclosure lawsuits.

Elliot S. Schlissel is a foreclosure defense attorney with more than 45 years of legal experience. His office has helped scores of families in the Metropolitan New York area stay in their homes. Elliot has previously been the President of the Commercial Lawyers Conference of New York, a creditors Bar Association, and he has extensive experience in litigating foreclosure defense cases and helping his clients obtain mortgage modifications.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, New York foreclosure attorney, New York foreclosure defense lawyers

Hidden Expenses When Buying A Home – Part I

February 10, 2014 by Elliot S. Schlissel

There is a common misunderstanding with regard to the total of all expenses new homeowners are exposed to when they purchase a home. Homeowners often believe all they have to do is put the down payment down, get the balance of the funds for the mortgage from a bank, and this will be sufficient to purchase a home. However there are numerous other expenses prospective homeowners face when purchasing a home.

Down Payment

I’ve already mentioned the down payment. In most real estate transactions, the homeowners puts 10% of the purchase price down at contract, and an additional 10% at the time of closing. This amounts to a total of 20% of the purchase price. If the homeowners are obtaining a Federal Housing Authority (FHA) mortgage, their down payment may be as little as 5% to 10% of the purchase price of the home.

Engineering Inspection

A home is the largest purchase a family will make during the course of their lifetime. Before jumping into the purchase of a home, it is usually necessary to have an engineer do a thorough inspection of the home to make sure the roof doesn’t leak, the electrical system is adequate, the plumbing doesn’t leak, the foundation is secure and numerous other items in the home are in good condition. Home inspections can cost anywhere from $500 to $600 in the Metropolitan New York area by qualified engineers.

Expenses of Moving

When a family moves into a home, they usually hire a moving company to help them pack up their possessions and move them to their new home. Moving expenses can cost a homeowner anywhere from $1,500 to $6,000. If the move is cross country, or over a long distance, it could cost significantly more.

Elliot Schlissel is a foreclosure attorney representing homeowners in the buying and selling of homes, and fighting foreclosures when banks seek to take their homes away from them. In addition, Elliot Schlissel and his attorneys assist homeowners in obtaining mortgage modifications and to avoid losing their homes in foreclosure proceedings.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: costs of buying a home, foreclosure, foreclosure attorney, foreclosure defense attorneys, mortgage modifications, Mortgage Modifications attorney, New York foreclosure defense lawyers

Can’t Read or Write English? Not An Excuse in a Foreclosure Proceeding

February 3, 2014 by Elliot S. Schlissel

Justice Thomas Whelan, sitting in the Supreme Court of Suffolk County, was recently presented with a case involving a litigant who could not read or write in the English language, and also did not understand what was involved in the service of process in starting a foreclosure lawsuit against him. One West Bank brought a foreclosure proceeding against Navaro. They took this action because Navaro did not pay her mortgage obligations. Navaro brought an application to the court seeking to dismiss One West’s lawsuit against her. One West had moved for a default judgment within a year of the case being removed from the foreclosure conference mediation part. One West was able to establish even though they had delayed for approximately a year, they had a reasonable excuse for the delay and their claim in foreclosure was valid.

Ignorance of the Law – No Excuse

Navaro brought a cross motion. She sought to remove the default. She claimed a reason for failing to submit a written answer to the summons and complaint after being served was because she could not read and write in the English language. In addition, she claimed she did not understand her responsibility to submit a written answer to the summons and complaint served upon her in the foreclosure proceeding. The court denied Navaro’s cross motion. Justice Whelan held confusion or ignorance of the law and/or the legal process did not in and of itself constitute a reasonable excuse for failure to answer the summons and complaint or appear in court regarding the case. The court granted One West’s motion to obtain a default judgment and to appoint a receiver to compute the amount owed and subsequently thereafter sell the house.

Conclusion

If you get served with a summons and complaint and you are not sure what you need to do, hire a foreclosure defense lawyer. Ignorance of the law is not an excuse in a foreclosure proceeding.

Filed Under: Foreclosure, Foreclosure Defense Tagged With: foreclosure, foreclosure defense attorneys, foreclosure defense lawyers, New York foreclosure attorney, New York foreclosure defense lawyers

New York’s New Mortgage Proposal

January 22, 2014 by Elliot S. Schlissel

New York is considering a new proposal which would provide an incentive for banks to modify mortgages on homes which are under water. Under this new proposal, the financial institutions would reduce the amount of the mortgage on homes under water. The mortgage amount would then be brought into conformity with the value of the home. In exchange for the reduction in the mortgage, the bank would be entitled to share in the profits if the home eventually increases in value and is sold. This new proposal will require changes in various state regulations. Under the current law, banks cannot enter into these types of arrangements with homeowners.

Governor Cuomo Backs New Mortgage Proposal

Governor Andrew Cuomo stated this initiative will help keep families in their homes and out of foreclosure, while at the same time reducing potential loses for investors. He went on to further state with regard to this new proposal “that’s good for homeowners, good for local neighborhoods, and good for the long term strength of the housing market.”

Unfortunately, pursuant to existing federal rules and regulations, the large majority of home loans in New York cannot qualify under this program. This is because Fannie Mae and Freddie Mac, the two federal agencies which purchase mortgages for approximately two-thirds of all home loans in the State of New York, do not allow forgiving outstanding mortgage balances.

The new proposed program would be available to homeowners who owe more on their homes than their homes are worth and have tried to obtain mortgage modifications and have been unsuccessful. Under this program, banks would provide disclosure to the homeowners concerning the terms of the new loan modifications and how much of the profits the bank would receive upon the sale of the home. The proposal would limit the bank to either 50% of the increase in value in the home or the total amount forgiven under the mortgage, whichever is less.

Homeowners Reluctant to Share in Appreciation

Interviews with a number of homeowners with regard to this new proposal, indicated they were reluctant to share in the appreciation of their homes with banks.

Conclusion

The program is an excellent idea. Homeowners whose homes are under water and are behind on their mortgage would be given a second chance to stay in their homes and have their mortgage modified to a realistic amount they could afford.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure defense, foreclosure defense attorneys, mortgage modification, mortgage modification denied, Mortgage Modifications attorney, New York foreclosure defense lawyers

Foreclosure Dismissed – Citibank Has No Standing

January 3, 2014 by Elliot S. Schlissel

In a case before Justice Lizbeth Gonzalez, in the Supreme Court of Bronx County, the judge dismissed a foreclosure lawsuit brought by Citibank.

Citibank had filed a foreclosure proceeding against a homeowner named McCray. They had taken this action on behalf of a Bears Stearns Alt-A Trust. McCray brought a motion requesting the foreclosure lawsuit be dismissed. He argued Citibank had lacked standing to bring the lawsuit. Citibank claimed it had standing to bring the lawsuit because it was the holder of the original note.

Holder or Assignee of the Note and Mortgage

Judge Gonzalez in her decision stated a foreclosing party in a foreclosure lawsuit has standing when they are both the holder or assignee of the mortgage and underlying note at the time the action is commenced.

Citibank’s attorneys had argued they were the holder of the note. However, their legal submissions did not state they also were the holder of the mortgage.

Motion to Dismiss Case Granted

Judge Gonzalez found that there was no proof submitted by Citibank they were the holder of both the mortgage and the note at the time of the initiation of the lawsuit. The court therefore granted McCray’s motion to dismiss. Judge Gonzalez found that Citibank did not submit adequate proof it had the right to the debt in the absence of documentation of chain of custody and proof the mortgage and notes were lawfully assigned and held by it prior to commencing the lawsuit. Since Citibank did not establish and meet the requirements they had standing to bring the foreclosure lawsuit, Judge Gonzalez held that they did not have standing to foreclose and their foreclosure lawsuit was dismissed.

Conclusion

Before a financial institution can bring a foreclosure lawsuit they must be able to prove that they are the holder of both the note and mortgage. In addition, they must show that the mortgage has been rightfully assigned to them and the assignment was properly filed. The documentation of the assignment, the possession of both the note and the mortgage, should be attached to the summons and complaint in the foreclosure legal action. If the financial institution does not do this, the court should dismiss the case for lack of standing.

Elliot S. Schlissel is a foreclosure defense attorney. His office has helped homeowners in scores of cases fight foreclosures and remain in their homes.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: defective foreclosure lawsuits, foreclosure, foreclosure attorney, foreclosure defense attorneys, foreclosure defense lawyers, foreclosure proceedings, New York foreclosure attorney, New York foreclosure defense lawyers

New Mortgage Rules: Too Little, Too Late!

January 2, 2014 by Elliot S. Schlissel

A new agency called the Consumer Financial Protection Bureau has been established. The purpose of this agency is to see to it we do not end up in another real estate bubble related to improper, unfair and illegal mortgage practices by financial institutions.

Owning one’s home is the American dream. The process of purchasing a home involves applying for a mortgage. Mortgage brokers and loan officers at banks seek to simplify this process. However, applying for a mortgage loan is generally the largest financial transaction a family enters into. The Consumer Financial Protection Bureau is set up pursuant to the Dodd-Frank financial reform law. New applications and forms are created by this statute. They are supposed to be in simplified, easy to read, and involve complete disclosure.

Financial institutions are supposed to clearly provide individuals applying for the mortgage with information concerning the actual cost of the loan. The principal amount. The amount of interest they are being charged and what they will spend in closing costs. The forms must also contain information concerning other aspects of the financial transaction including but not limited to whether there will be prepayment penalties and other costs related to the financing. The new law goes a long way to simplifying and clarifying this process for prospective home buyers. However, it does not go far enough.

Failure of the New Mortgage Rules

What the new forms do not do is provide the prospective homeowner with a logical basis to compare loan products from different financial institutions. The new loan forms do not include various costs related to the purchase of a home. Some of the costs these forms do not deal with are title insurance, closing expenses related to taxes, fuel oil costs to heat the house, and attorneys fees for hiring an attorney for legal representation.

No Three Day Right to Review

The Consumer Financial Protection Bureau had initially requested that all financial institutions be required to give the mortgagors a three day right to review the information whenever loan terms concerning the transaction are changed or modified. Unfortunately, this rule was not established. Lenders still have the ability to present the mortgagors, at the time of the closing, with changes in the cost structure of the financing. This is both unfair and unreasonable. You have homeowners sitting at the table at their closing expecting to pay one amount for the financing of their home and being told at the last minute, it is going to cost you more. They are too deep into the transaction to walk away. They are stuck with a higher cost of their mortgage. This is true even if the higher costs are beyond their ability to pay. Lenders should be forced to live up to the terms of their proposals when they offer prospective homeowners mortgages. They should not be allowed to change the terms at the last minute to the prospective homeowners detriment.

The establishment of the Consumer Financial Protection Bureau under the Dodd-Frank financial reform law was a great idea. Unfortunately, this great idea has not worked out completely to consumer’s benefit.

Elliot S. Schlissel is a foreclosure defense lawyer with more than 45 years of legal experience. He litigates foreclosure lawsuits throughout the Metropolitan New York area. He keeps families in their homes and helps them obtain mortgage modifications.

Filed Under: Foreclosure, Foreclosure Defense, Mortgage Modification Tagged With: foreclosure, foreclosure attorney, foreclosure crisis, foreclosure defense, foreclosure defense lawyers, mortgage modifications, New York foreclosure attorney, New York foreclosure defense lawyers

Court Bars Collection of Interest and Fees on Loan For Failure of Mortgage Company to Negotiate in Good Faith

Bank Fails to Prove it Has Standing on Date Foreclosure Action Started

New Mortgage Rules’ Negative Impact on the Housing Industry

Judgment of Foreclosure and Sale Vacated The Case To Be Brought Back to the Foreclosure Settlement Part

Foreclosure Case Dismissed: Bank Does Not Obtain Personal Jurisdiction Over The Defendant

Hidden Expenses When Buying A Home – Part I

Can’t Read or Write English? Not An Excuse in a Foreclosure Proceeding

New York’s New Mortgage Proposal

Foreclosure Dismissed – Citibank Has No Standing

New Mortgage Rules: Too Little, Too Late!

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