Foreclosure

February 25, 2016

Mortgage Modifications in New York State

Our firm is often called on to assist homeowners whose properties may be in foreclosure. This can occur when a person falls behind in their mortgage payments to a bank or other lending institution. Because of the high volume of such foreclosures in New York State over the past several years, additional safeguards have been added to the judicial process to protect people from losing their primary residence in a foreclosure case.

Prior blog posts have explained how New York State requires a mandatory settlement conference in most residential foreclosure matters. The main exceptions are cases involving a reverse mortgage, or situations in which the homeowner does not reside at the property being foreclosed, such as a second home or vacation house. Our attorneys will attend settlement conferences in Court to attempt to resolve outstanding foreclosures. Court referees, who meet with the parties in an attempt to resolve these cases, encourage lending institutions to offer mortgage modifications. The first step in the process is that the borrower must provide complete financial information to the lender (or, in most cases, their attorneys). This information usually consists of a standard Request for Mortgage Modification Form (RMA), copies of state and federal tax returns for the last several years, a hardship letter from the borrower explaining why they fell behind on their mortgage, proof of income, bank statements, and other financial records as the lender may request.

Once this information is provided, the lending institution will consider whether a modification is possible. Based on the borrower’s income and assets, as well as the value of the property in question, as well as the mortgage amount, the lender may offer a trial modification. The trial modification may reduce the interest rate on the original mortgage, and may also shift the past due payments to the end of the loan term, allowing a delinquent borrower to resume payments and have the property removed from the foreclosure process. In certain instances, the lender may even reduce the actual amount of principal owed on the mortgage.

September 25, 2015

Legal Issues Pertaining to Inspirational and Divisive Religious Leaders

By Weiss & Weiss

Pope Francis’ first visit to the United States has managed to inspire numerous people. Yesterday’s speech before Congress mesmerized all of those in attendance, regardless of their religious or political affiliation. The Pope’s message has been unifying to all witnesses, which is why many people have been so excited by his visit, even though many of us are not Catholic and may not agree with his specific positions.

What happens when a religious leader is divisive instead? This post will examine the legal ramifications when the leader of a religious institution is the source of conflict among congregants. It is not unusual for clients to consult us concerning disputes within their religious institutions.

In the event that the congregants choose to continue to worship together under the leadership of another clerical leader, steps may need to be taken to legally terminate the relationship with the spiritual leader. As we discussed in a prior post , the spiritual leader may be classified as an independent contractor or employee, depending upon the circumstances. An independent contractor may be dismissed more readily.

June 4, 2015

Foreclosure and Bankruptcy in New York

By Weiss & Weiss

A recent decision by the United States Supreme Court raises important issues for those whose homes are in foreclosure and are considering filing for federal bankruptcy protection. This case involved a borrower whose home was “underwater,” which means that the mortgage debt on the property (both a first and second mortgage) exceeded the current value of the home. In such cases, the bankruptcy counsel will often seek to have the second mortgage “stripped off,” that is, removed, so that it is no longer a lien on the property.

The Supreme Court ruled that, in such situations, the second mortgage could not be removed simply because the house was worth less that the total mortgage debt. This ruling will prevent such homeowners from having second mortgage loans (which are often in the form of home equity loans) discharged by the Bankruptcy Court in a Chapter 7 liquidation proceeding. This ruling protects banks that make second mortgages from having these mortgages dismissed in bankruptcy proceedings where the home currently has a negative equity.

Our firm handles many cases in which we defend homeowners who are in foreclosure. We are often asked what the effect of a bankruptcy filing would be on such a proceeding. The first effect of a bankruptcy filing is to freeze all current litigation against the person filing for bankruptcy, as well as all collection efforts on any debts. Therefore, if an individual is delinquent in their mortgage payments, a bankruptcy filing would suspend all collection letters, phone calls, and, of course, litigation relating to all debts, including mortgage debts. Failure to comply with the automatic bankruptcy stay may subject the lending institution to Court sanctions, including fines.

March 12, 2015

Foreclosure Settlement Conferences in New York State

By Weiss & Weiss

Our firm handles many cases in which the client is being sued for foreclosure of their property. In general, a foreclosure lawsuit involves a mortgage loan which has been recorded as a lien against real property, such as a house or condominium unit. Please note that cooperative apartments involve ownership of shares in the cooperative corporation, and therefore are not subject to the judicial foreclosure process.

Due to the large volume of foreclosures in New York in recent times, and the desire to protect homeowners, a law was passed in New York State several years ago requiring mandatory settlement conferences in residential foreclosure actions. This requirement does not apply to commercial foreclosures, nor to situations where the owner of the property being foreclosed does not reside at the property.

The purpose of this law is to attempt to resolve foreclosure cases before extensive litigation occurs. The law requires that, after the party foreclosing (the lender) files proof with the Court that the borrower was served with the foreclosure lawsuit, the Court must hold a mandatory settlement conference within sixty (60) days of such filing. In general, the Court will issue a written notice to all parties advising them of the date, time, and location of the settlement conference. It is important to advise your attorney if you receive such a written notice, so that they will be able to attend the conference on your behalf.

October 31, 2014

Happy Halloween: Haunted Houses, Zombie Houses, Ghosts and Other Scary Things

By Weiss & Weiss

Even Halloween gives rise to legal issues that may pertain to our blog readers. This blog post will address haunted houses, zombie houses, ghosts and other scary situations from a legal perspective.

Unfortunately, a crime, suicide or other unpleasant event may have happened in a house prior to sale. Such a house may be considered to be “haunted”. Does New York law require disclosure that the house is haunted to a potential buyer? The answer is no. New York is a caveat emptor state, meaning “let the buyer beware”. Psychological issues do not require disclosure. It is the buyer’s responsibility to conduct inspections, ask questions and develop her own opinion about the neighborhood, school district and conditions in the house. Once the buyer has accepted delivery of the Deed at the closing, she has no claim against the seller for property conditions except those that specifically survive the closing according to the contract between the parties.

The only exception to this concept is New York’s Property Disclosure Law . This requires the seller to complete an extensive list of questions detailing property condition, such as has there ever been an oil tank at the property, is the electrical system original and the like. If a seller does not provide the completed Property Disclosure form, a $500.00 credit is to be provided to the buyer at closing. Interestingly enough, in upstate New York, most sellers complete the Property Disclosure form, while in downstate counties typically served by our firm, most sellers opt to credit the buyer at closing rather than complete said form.

July 28, 2014

Keeping Landlord-Tenant Disputes Under Control

By Weiss & Weiss

Recently in the news is the rather gruesome story of a woman who was murdered and dismembered. Her body parts were discovered in Nassau and Suffolk Counties. Her neighbor was arrested for her murder and is being held without bail. According to the news story, the root of the conflict between the two women appears to have been a landlord-tenant dispute.

The accused murderer, Leah Cuevas, was pretending to be the landlord of the building in which the two women lived, after the actual owner passed away. Ms. Cuevas then attempted to collect the rent from the building’s tenants, and when fellow tenant Chinelle LaToya Thompson Browne refused to pay, she was allegedly murdered by Ms. Cuevas. Of course, most landlord-tenant conflicts do not end in this manner. This blog post will attempt to discuss the legal issues involved, although, as our firm does not generally practice criminal law, we will leave the more graphic issues to the criminal courts.

Often, a situation can arise where a person claims to be the owner and/or landlord of a house or apartment building and demands rent from the tenants. This can happen where the original landlord passes away without a will, or where the building is being foreclosed by a lender. There may be occurrences where a landlord cannot meet the carrying charges on a building, such as the mortgage and utilities, and simply “walks away” from their ownership. If the ownership is in a corporate name, the landlord may not be personally liable for the building’s debts, and does not dispute any foreclosure proceeding that may occur.

May 22, 2014

Enjoy Your Vacation Home this Memorial Day Weekend

By Weiss & Weiss

Memorial Day weekend is eagerly anticipated by many of our readers, especially this year after the harsh winter that we endured. Fortunate travelers expect to enjoy their vacation homes this weekend. As you head out for the weekend, we wish to remind you of certain legal issues pertaining to vacation homes.

Some vacation homes were financed by the use of reverse mortgages . Once the borrower dies or does not occupy the home for another reason, the lender may seek to collect the remaining unpaid principal balance, require the home to be sold or foreclose on the property. Since vacation homes are secondary homes, obtaining a mortgage modification, if necessary due to the financial circumstances of the borrower, is not a certainty. We are available to assist our clients in foreclosure defense should it become necessary.

Sometimes a vacation home is inherited by more than one adult child. In this case, maybe not all of the record owners contribute to the expenses of the house or even use the house. Our firm has been engaged in partition actions on behalf of its clients to alleviate this situation.

April 24, 2014

“Self-Help” and Legal Representation in Foreclosure and Landlord-Tenant Matters

By Weiss & Weiss

Our firm often receives inquiries from potential clients, many related to foreclosure and landlord-tenant matters. Often, an individual will inform us that they have been representing themselves in a Court proceeding, or are considering doing so, and will question us as to whether an attorney is necessary.

In New York State, individuals are generally permitted to represent themselves in Court proceedings, without an attorney. One exception to this is a corporation. Even if an individual is the sole owner of a corporation, corporations must generally be represented by counsel when they are a party to a litigation proceeding.

However, simply because an individual may representative herself in Court, does not mean that this is the best decision when confronted with an adversarial proceeding concerning potentially sophisticated legal issues, such as a foreclosure proceeding, or landlord-tenant matter. Many of the people who make inquiries to our firm will ask what benefit is gained from hiring an attorney, especially since there is an increased cost involved when attorney’s fees are incurred.

March 28, 2014

Defending Reverse Mortgage Foreclosures

By Weiss & Weiss

A recent article in the New York Times discusses the pitfalls of reverse mortgages, including the effect such a mortgage may have on the heirs of the borrowers in question. A recent blog post also examined the possible negative legal ramifications of reverse mortgages on seniors and their surviving spouses. This article will discuss possible legal defenses when a reverse mortgage is being foreclosed, or threatened to be foreclosed, by a lending institution.

The first person to be impacted by a reverse mortgage default is usually the surviving spouse of the borrower. This situation can occur when only one spouse is obligated under the reverse note and mortgage. There are several reasons why this can happen. It is possible that one spouse has poor credit, and cannot qualify for a loan. In addition, in order to qualify for a reverse mortgage, the borrower must be at least 62 years old. A couple may own a property jointly, where one spouse is over 62, and the other is younger. In that case, the reverse mortgage may be made to only the older of the owners. In this example, the lender will often force the non-borrowing spouse to remove their name from the title of the property being borrowed against as a condition to making the loan. This may cause additional legal problems if the non-titled spouse survives the borrowing titled spouse.

If the borrowing spouse passes away, the terms of the reverse mortgage usually call for the entire sum that was borrowed to be immediately paid in full. The surviving spouse may receive collection letters from the lender, demanding that the mortgage be repaid in full. This obviously comes at a time when the surviving spouse is probably undergoing emotional and financial stress.

November 14, 2013

Eviction Actions After Foreclosure in New York State

By Weiss & Weiss

Some of our prior blog posts have dealt with the legal issues relating to foreclosure prosecutions and defenses in New York State. As discussed in these posts, foreclosures are legal actions in which a mortgage holder will legally obtain title to real property from a defaulting borrower. After obtaining a foreclosure judgment, the property is auctioned to the highest bidder, which is usually the lender bringing the action. The Referee will then prepare a Referee’s Deed transferring title to the successful bidder.

One question that often arises is when the owner continues to occupy the foreclosed property, or when there are tenants in the foreclosed property. What happens to these occupants when the foreclosure procedure is complete and title is transferred? There are several answers to this question.

When the original owner continues to live in the property after a lender has obtained title by a Referee’s Deed in foreclosure, the new owner must take legal action to evict the occupant. In New York State, such evictions can be accomplished under New York Real Property Actions and Procedures Law § 713. This section provides grounds for eviction “where no landlord-tenant relationship exists.” Subsection 5 provides that if the property has been sold in foreclosure, then a certified copy of the deed in foreclosure must be exhibited to the persons to be evicted from the premises.