LIEB BLOG

Legal Analysts

Wednesday, February 24, 2010

Continuing on Foreclosures

It seems to be my topic of choice this week, so I figured I would add to it.

Predatory lending is everywhere, but not just in the lending. They keep their predatory ways when they are foreclosing upon borrowers. Watch out for the banks saying don't worry about the foreclosure, we are modifying your mortgage. That is hogwash. The truth is that they will continue to foreclose. Plus, once you miss your time to answer the foreclosure action, you need to show a variety of factors to extend your time to answer. Some of these factors include the length of the delay, the reasonableness of the delay, if the delay was intentional and strategic, the prejudice the bank would feel if an extension was granted, the public policy that favors litigation being resolved on the merits, and finally if you have a meritorious defense.

Often, its easy for a mortgagor (borrower) to have every factor, but a meritorious defense. If you borrowed money and did not pay it back, do you not owe the money? Probably. I guess what I am saying is you have an uphill battle if you default.

Anyway, I will be out of town for a week and in my absence Keith Riley of Lieb at Law will be blogging to keep you informed on the latest that are the issues involved in Long Island Real Estate. Enjoy.

Tuesday, February 23, 2010

Short Sale Timing

My belief is that the purpose of a short sale is to have the bank forgive the deficiency. Yes, getting the Lis Pendens lifted and the sale approved is important. Nonetheless, if not for the waiver, you will owe whatever the sale price doesn't cover from the mortgage and all the costs of the foreclosure. For example if you owe $500,000 on the mortgage and both the foreclosure action costs and closing costs were $30,000 and the auction sale price was only $400,000, you would still owe $130,000 after the sale if the mortgage company did not waive the deficiency. Thats a lot of money to be in the whole. Its worth fighting for the bank to waive that money and by fighting I mean going on the offensive and seeing whatever mistakes they made on their end and using those mistakes as negotiation leverage.

I met with a potential client today and with her real estate agent (I like the agents in on my meetings so we can collaborate) and the whole chat was about how much money we can get forgiven. I will tell you why. The clients back was against the wall having already received a Judgment of Foreclosure. Therefore, the Loss Mitigation Department at the bank (or risk assessment department as I characterize them) has all the bargaining chips. If they approve the short sale they will get less than they are owed just as if they perform the sale, but they have already financially and emotionally invested in the sale. Moreover, my ability to determine if predatory lending existed and if I can set forth such a claim is handcuffed by the fact that we have an impending auction sale. Therefore, I put forth to all of you that this could all have been potentially avoided and the short sale could have been approved with the deficiency waived if the client would have come to their lawyer earlier. By the way, this was the second client I met with in the same day with an upcoming auction. I want to help, I even agreed to try, but please stop waiting for the last minute to come to me. This is the difference between going to a doctor with a cut and with an infection from the cut that requires amputation. More importantly, you get to decide how injured you are by determining how long you want to wait. The longer you wait after you are served with legal papers to contact an attorney, the worse chances there are that the attorney can help you.

Why does everyone think that people wait so long to ask an attorney for help?

Monday, February 22, 2010

Modification and Foreclosure

I just had a consultation with a client who wanted to know why they were being foreclosed on if they were close to agreeing to a modification.

This question has been asked so often that I need to lay out the rule to everyone.

Unless a Court action is withdrawn, dismissed, or otherwise - it exists!!!

Negotiating a modification, whether under the government's making home affordable program or otherwise, does not stop a foreclosure. You must answer legal papers if you are served regardless of your modification. If you think otherwise, you are incorrect. If you think the nice bank will just stop going after you, you are incorrect. Unless you have a written agreement providing for the end (discontinuance) or pause (stay) of an action or a Court Order, you are still being sued. WAKE UP.

Foreclosure Redemption - BE WARNED

Nothing is stayed, stopped, or otherwise unless ordered by the Court.

In either a mortgage or tax forelcosure, the only requirement to redeem the property during a foreclosure proceeding is to provide, without condition, the full amount due prior to the property being actually sold. BE WARNED - providing part of the amount due does nothing unless in an express agreement ordered by the Judge.

To be clear, paying part of the money DOES NOT work a statutory stay of the foreclosure proceeding.

There are 2 stay (stop) statutes that are applicable to stop a forelcosure: CPLR 5519 (only applies when there has been a judgment of the court directing the payment of a sum of money) and RPAPL 1341 (only applies to partial foreclosures).

Redemption is the last chance to save a foreclosed property if all else fails. Don't play around, pay everyting and be sure the foreclosure is cancelled. Assumptions make a ____ out of you and me.

Brooklyn Nets

Lets talk about the Atlantic Yards Project. Some local private property owners tried to block the eminent domain taking of the Atlantic Yards by saying the project was not for a "public use". They lost, it is a "public use", but what is a "public use"? It is a project that has a dominant public purpose said the Court of Appeals when defining the area as substandard and insanitary with a need for rehabilitation.

Do you think its fair for the government to take property and allow a developer to make a profit on that property?

Also, did you realize that the Long Island Real Estate Blog includes Brooklyn. Lieb at Law considers any part of the island to be part of Long Island. Do you agree?

More importantly, LETS GO NETS! (now when are we getting LeBron?)