LIEB BLOG: Foreclosure Defense

Showing posts with label Foreclosure Defense. Show all posts

Thursday, December 26, 2013

Ocwen is Finally Accountable for its Actions

Andrew M. Lieb, Esq., MPH Foreclosure Defense , Legal Updates

The Consumer Financial Protection Bureau (CFPB) and 49 states have signed a proposed court order requiring Ocwen to spend $2.1 billion on loan modification programs and relief to victims of foreclosure.

Ocwen is the largest non-bank mortgage servicer in the United States. It was alleged by CFPB that for years, Ocwen has illegally delayed loan modifications, charged improper fees, provided incorrect updates to consumers who were applying for loan modifications, erroneously reviewed foreclosure documents, and inaccurately applied and tracked monthly mortgage payments.

Like GMAC, Bank of America, Citi, JPMorgan Chase, and Wells Fargo, Ocwen is alleged to have deceived and abused the system for too long and must be punished for its illegal practices.

Under the Order, Ocwen is required to comply with the provisions of the 2012 National Mortgage Settlement and must comply with the new mortgage servicing rules that are taking effect January 2014. A knowledgeable, responsive single point of contact must be established for borrowers applying for relief, so that the loan modification process will be clearer and quicker than ever before. Instead of being sacrificed, borrowers will now be protected and given a fair shot at saving their homes.

Borrowers should be overjoyed that there will be more communication between servicer and borrower, and that borrowers who were improperly foreclosed on between 2009 and 2012 may receive compensation. It is a great step forward in the mortgage servicing world.

Thank you to Lieb at Law's Assistant Case Manager, Jessica Vogele, for sharing this valuable information.

Cracking Down on Strategic Defaulters

Andrew M. Lieb, Esq., MPH Foreclosure Defense , Mortgage Industry

Do you know someone who purposely defaulted on his mortgage even though he had the ability to pay it? Perhaps this person did not want to waste his hard-earned income on mortgage payments but instead saved up for a cruise to the Bahamas. Or maybe this person owed more than he originally paid for the home and did not want to continue paying it any longer. Whatever the reason, this person is not alone. There are thousands of these “strategic defaulters” in the United States, many of whom get away with not paying deficiencies because Fannie Mae and Freddie Mac have been lax in pursuing them.

Fannie Mae and Freddie Mac are supposed to evaluate every defaulter’s ability to repay the past due amount on their mortgages. Even after foreclosure, these two government-sponsored enterprises and many other lenders can still go after borrowers with deficiency judgments.

However, according to the recent report from the Office of the Inspector General at the Federal Housing Finance Agency (FHFA), Freddie Mac did not evaluate nearly 58,000 foreclosures for deficiency collectability. That is $4.6 billion that went unchecked and could have at least partially been recovered by Freddie Mac. Thousands of strategic defaulters were set free of the past due amounts that they owed on their mortgages.

The Office of the Inspector General is rightfully horrified by these numbers and is fiercely recommending the FHFA to oversee Freddie Mac’s deficiency recovery strategies to ensure that these strategies become efficient and effective in the near future. The fact that so many have gotten away with this practice in the past few years only encourages more to do so.

No longer should strategic defaulters get away with robbery.

In a separate recent report, the Office of the Inspector General recommends the FHFA to closely oversee Fannie Mae’s deficiency recovery strategies as well. From January 2010 to June 2012, Fannie Mae did not pursue deficiencies in 29,692 foreclosures because the states’ statutes of limitation for pursuing these deficiencies had expired or were about to expire. Fannie Mae is in a better position than Freddie Mac in terms of collecting on deficient judgments, but it can still drastically improve its methods so that it can obtain deficiencies even in states with short deadlines for filing claims.

If you have a loan insured by Fannie Mae or Freddie Mac and you strategically defaulted on your mortgage, watch out. The two enterprises will not be lax any longer.

Thank you to Lieb at Law's Assistant Case Manager, Jessica Vogele, for sharing this valuable information.

Consumer Financial Protection Bureau getting into the Mortgage Modification Game

Andrew M. Lieb, Esq., MPH Foreclosure Defense , Legal Updates

Incident to the Consumer Financial Protection Bureau's (CFPB) new mortgage rules, the Ability-to-Repay Rules, the CFPB also has created rules for delinquency notices, follow-up information for loss-mitigation, and forbearance plans. Its imperative that foreclosure defense counsel familiarize themselves with these rules prior to their effective in 2014.

The full final rule is available here.

Most interestingly is the "general ban on proceeding to foreclosure before a borrower is 120 days delinquent".

Also, important for mitigation specialists is the clear requirement that servicers provide notice of deficient document submissions incident to a modification application and an opportunity to cure. This should hopefully put an end to the days of we closed your file because we didn't get all of your documents - the fax shredder will be broken.

Mortgage Foreclosure Alert: New Making Home Affordable Program Handbook Released - Version 4.3

Andrew M. Lieb, Esq., MPH Foreclosure Defense , HAFA

To access the new Handbook for MHA, inclusive of HAMP and HAFA, click here.
This Handbook is the rules for banks / servicers to modify mortgages, so pay careful attention to detail and make sure that they comply.

Participating in Foreclosure Settlement Conferences prevents Default Judgment against Mortgagor

Andrew M. Lieb, Esq., MPH Foreclosure Defense , Legal Updates

In a strikingly important decision, the Supreme Court, Kings County, faced the issue of whether a Defendant who participates in Foreclosure Settlement Conferences, but did not Answer the Complaint, can be held in Default granting the lender judgment.

The Court held: "For the most part, caselaw is clear that, where a defendant makes an "informal appearance" within the time specified by CPLR 320(a), the defendant is not "in default," and a motion to enter judgment by default should be denied."

Practitioners and borrowers alike should read this decision and utilize it to advocate against judgments as many pro se defendants in the foreclosure arena participate in settlement conferences without formally answering.

Foreclosure Requirements After 7/31/13

Andrew M. Lieb, Esq., MPH Foreclosure Defense , Legal Updates

At the end of last month, the Governor signed into law Bill A5582-2013. This Bill added CPLR 3012-B and amended CPLR 3408. Effectively, this Bill eliminates prior rules with respect to attorneys filing the Attorney Affirmation pursuant to AO/413/11. Specifically, this Bill changes the time period for the requirement from accompanying the Request for Judicial Intervention (RJI) to accompanying the Complaint. As a result, a shadow docket can be eliminated of cases that were commenced, but cannot move to be assigned to a Judge. So, this is a great change in operations for foreclosures in this state. Additionally, it adds precise sanctions for failure at CPLR 3012-B(D) thereby taking out the guesswork for Judges that has plagued the State for the last years.

CPLR 3012-B now reads as follows:CERTIFICATE OF MERIT IN CERTAIN RESIDENTIAL FORECLOSURE ACTIONS. (A) IN ANY RESIDENTIAL FORECLOSURE ACTION INVOLVING A HOME LOAN, AS SUCH TERM IS DEFINED IN SECTION THIRTEEN HUNDRED FOUR OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW, IN WHICH THE DEFENDANT IS A RESIDENT OF THE PROPERTY SUBJECT TO FORECLOSURE, THE COMPLAINT SHALL BEACCOMPANIED BY A CERTIFICATE, EXECUTED BY THE ATTORNEY FOR THE PLAIN-TIFF, CERTIFYING THAT THE ATTORNEY HAS REVIEWED THE FACTS OF THE CASEAND THAT, BASED ON CONSULTATION WITH AUTHORIZED REPRESENTATIVES OF THEPLAINTIFF AND THE ATTORNEY'S REVIEW OF PERTINENT DOCUMENTS, INCLUDINGTHE MORTGAGE, SECURITY AGREEMENT AND NOTE OR BOND UNDERLYING THE MORT-GAGE EXECUTED BY THE RESIDENTIAL DEFENDANT AND ALL INSTRUMENTS OF ASSIGNMENT, IF ANY, OR ANY OTHER INSTRUMENT OF INDEBTEDNESS, THERE IS AREASONABLE BASIS FOR THE COMMENCEMENT OF SUCH ACTION AND THAT THE PLAIN-TIFF IS CURRENTLY THE CREDITOR ENTITLED TO ENFORCE RIGHTS UNDER SUCH DOCUMENTS. SUCH CERTIFICATE SHALL ATTACH A COPY OF THE MORTGAGE, SECURI-TY AGREEMENT AND NOTE OR BOND UNDERLYING THE MORTGAGE EXECUTED BY THE RESIDENTIAL DEFENDANT AND ALL INSTRUMENTS OF ASSIGNMENT.(B) WHERE A CERTIFICATE IS REQUIRED PURSUANT TO THIS SECTION, A SINGLECERTIFICATE SHALL BE FILED FOR EACH ACTION EVEN IF MORE THAN ONE DEFEND-ANT HAS BEEN NAMED IN THE COMPLAINT OR IS SUBSEQUENTLY NAMED.(C) THE PROVISIONS OF SUBDIVISION (D) OF RULE 3015 OF THIS ARTICLE SHALL NOT BE APPLICABLE TO A DEFENDANT RESIDENT OF THE PROPERTY SUBJECT TO FORECLOSURE WHO IS NOT REPRESENTED BY AN ATTORNEY.(D) IF A PLAINTIFF WILLFULLY FAILS TO PROVIDE COPIES OF THE PAPERS ANDDOCUMENTS AS REQUIRED BY SUBDIVISION (A) OF THIS SECTION AND THE COURTFINDS, UPON THE MOTION OF ANY PARTY OR ON ITS OWN MOTION ON NOTICE TOTHE PARTIES, THAT SUCH PAPERS AND DOCUMENTS OUGHT TO HAVE BEEN PROVIDED,THE COURT MAY DISMISS THE COMPLAINT OR MAKE SUCH FINAL OR CONDITIONALORDER WITH REGARD TO SUCH FAILURE AS IS JUST INCLUDING BUT NOT LIMITEDTO DENIAL OF THE ACCRUAL OF ANY INTEREST, COSTS, ATTORNEYS' FEES ANDOTHER FEES, RELATING TO THE UNDERLYING MORTGAGE DEBT. ANY SUCH DISMISSALSHALL NOT BE ON THE MERITS.

Amended CPLR 3048 now reads as follows: (a) In any residential foreclosure action involving a home loan assuch term is defined in section thirteen hundred four of the real prop-erty actions and proceedings law, in which the defendant is a residentof the property subject to foreclosure, PLAINTIFF SHALL FILE PROOF OFSERVICE WITHIN TWENTY DAYS OF SUCH SERVICE, HOWEVER SERVICE IS MADE, ANDthe court shall hold a mandatory conference within sixty days after thedate when proof of service UPON SUCH DEFENDANT RESIDENT is filed withthe county clerk, or on such adjourned date as has been agreed to by theparties, for the purpose of holding settlement discussions pertaining tothe relative rights and obligations of the parties under the mortgageloan documents, including, but not limited to determining whether theparties can reach a mutually agreeable resolution to help the defendantavoid losing his or her home, and evaluating the potential for a resol-ution in which payment schedules or amounts may be modified or otherworkout options may be agreed to, and for whatever other purposes thecourt deems appropriate.

Mortgage Foreclosure Alert: New Making Home Affordable Program Handbook Released - Version 4.2

Andrew M. Lieb, Esq., MPH Foreclosure Defense , HAFA

To access the new Handbook for MHA, inclusive of HAMP and HAFA, click here. While reviewing the Handbook you should be aware of the case of Flagstar Bank v. Walker wherein the Court held that the statutory good faith standard for a CPLR 3408 Foreclosure Settlement Conference is compliance with the Handbook. To review the case, click here.

This Handbook is the rules for banks / servicers to modify mortgages, so pay careful attention to detail and make sure that they comply.

The Check's in the Mail: Settlements for Wrongful Foreclosures

Andrew M. Lieb, Esq., MPH Foreclosure Defense , Mortgage Industry

Some information on foreclosure defendants receiving money in the mail, which is being shared by an Assistant Case Manager at Lieb at Law, P.C., Laura Palermo:

Recently a few clients received a check from their current or former mortgage lender. Perplexed by this, my clients were a bit hesitant to run down to the bank to cash it. They asked “what is this for?” and “are there terms attached to this check I should know about?”

I directed them to a deal struckback in January of this year between Fannie Mae and the ten major banks to settle allegations that the banks had wrongfully foreclosed on thousands of homeowners between 2009 and 2010. The result of the deal was an $8.5 billion settlement which was to be allocated among the homeowners (or now former homeowners) who were wrongfully or prematurely foreclosed on or denied a loan modification resulting in foreclosure. The foreclosures which are considered as wrongful include those which were “robo-signed” or automatically entered into foreclosure proceedings without proper review for work out options such as modification, deed-in-lieu, or short sale.

The settlement amounts range anywhere from $100 to $125,000 per qualifying person. The settlement is thought to be disbursed among hundreds of thousands of people. There is no way in which to apply to be a part of the payout, the recipients of the settlement are to be determined by the banks. The settlement has been criticized by many for being too soft on the banks as it releases them from their responsibility for these foreclosures for a relatively low price.

The first wave of checks were mailed out this week, so if you fit the description of a person who was wrongfully foreclosed on or attempted to be foreclosed on between 2009 and 2010, and you find yourself with a check in hand from your former or current mortgage lender, go ahead and cash it, there are no special terms attached to it, it is simply your pay out from a billion dollar settlement you probably didn’t know you were a part of.

I’ll leave you off with some advice from my Grandma: “Don’t spend it all in one place!”

Mortgage Modifications: Introducing The Hope Loan Port

Andrew M. Lieb, Esq., MPH Foreclosure Defense , Mortgage Industry

Some information on a great new system for mortgage modifications which is being shared by an Assistant Case Manager at Lieb at Law, P.C., Laura Palermo:

Applying for a loan modification can be a very frustrating and trying process. For some people it can take years for their application to be properly reviewed and decided on. That’s why I was delighted to hear about the new platform in use by many of the big Lenders, the Hope Loan Port. I learned about the new system while trying to submit a loan modification application to Bank of America on behalf of one of my clients. I was informed by the lender that they are no longer accepting third party submissions via fax and instead, the new preferred method is the Hope Loan Port.

Upon visiting the Hope Loan Port website ( https://www.hopeloanportal.org/ ) I learned that the website has been created as a “neutral, national, non-profit, e-commerce platform” as a way to provide more transparency and productivity to the process of foreclosure alternative review (i.e. loan modification, short sale, or deed in lieu).

In order to access and use the Port you must first register as a Counseling Agency. There are two types of counseling agencies that can register for this platform, the government sponsored not-for-profit agencies which are affiliates of the National Foreclosure Mitigation Counseling Program, and there are for profit counseling agencies, such as law firms. The registration requires you provide your company information and designate one person from your company to be the contact person. The contact person is in charge of managing and maintaining user profiles and the account. After submitting the company and contact information you must agree to the terms and conditions of the site, and then wait for verification.

About 24 hours after submitting the information we received an e-mail stating that our company was verified by the Port along with our login information minus our password which was supposed to arrive in a subsequent e-mail. We waited for two days and still did not receive our password. I contacted the website by using their “Contact Us” tab and submitting an e-mail requesting the password information be re-sent. Finally, a few hours later I received the password and was able to log in to the actual portal.

In order to submit a case you must first input information about the Borrowers, the first step requires you to disclose the loan information including the loan number, borrower names, and property address. The second step requires you to disclose financial information including gross and net income, rent, unemployment, monthly expenses etc. From there, you enter the information found on the Request for Mortgage Assistance (RMA) including if borrower would like to sell or keep the property, if the property is listed for sale, if the property is owner occupied, reason for hardship etc. After completing this information you must then upload the supporting documents including the signed and dated RMA, bank statements, pay stubs, profit and loss statement, 4506-T, rental income information, and any other supporting documents based on the Borrower’s situation. Upon submission the Lender gains access and then can review the file and inform you via the portal of information or documents still needed. The Counselor is able to view the pending status and communicate with Lender throughout the review process.

The website is not entirely user-friendly but they do offer and encourage training webinars. It still has its glitches to work out as well but overall I feel this is a step in the right direction for the modification application process. Many Borrowers and counselors who have applied for a modification can tell you that it is by no means an easy process. Much of the time spent on the modification application is wrapped up in the submission and re-submission of documents and following up with the Lender to ensure receipt and review of those documents. It is my hope that the Hope Loan Port will eliminate a lot of this back and forth and will also de-mystify the process by creating and maintaining more transparency during the application review.

I am interested to see how they will further adapt the website to be more user/Borrower friendly. At this point in time only Counseling Agencies and the Mortgage Lenders or Insurers may access and use the portal. I am curious to see if eventually they will develop an access point for Borrowers so they may submit their modification application online on their own.

Laura Palermo will keep us in the loop as this program gets perfected, but in the interim, this is an exciting new program that will hopefully help to organize the chaos now existing in the loan modification process. Go check it out!

Legal Aid to provide FREE representation in foreclosures

Andrew M. Lieb Debt Management , Foreclosure Defense

For the 3rd time this past week the real estate world has been hit with a whopping change for the better. To learn more about the announcement made during Chief Judge Lippman's State of the Judiciary 2011, you can either read a New York Times article by clicking here or the text of the speech by clicking here.

Coupled with the other changes, this change signals that we are in a homeowner / mortgagor / borrower friendly world where the government is going to influence lenders to agree to mortgage workouts.

In the speech, the Chief Judge took time to call out robosigners and the affect at curtailing robosigners that the new attorney affirmation requirement has had, topics that I will be discussing at a CLE sponsored by First American Title Insurance Company of New York on March 30, 2011. To be invited to this free seminar, please contact First American at 516-832-3263.

The striking part of the speech was when the Chief Judge said that "63% of homeowners appearing for mandatory court settlement conferences are unrepresented". The Chief Judge than promulgated a new program providing homeowners who cannot afford a lawyer with legal assistance at the foreclosure settlement conference stage of a foreclosure. Yet, the program's great ambitions were limited when the Chief Judge said "these legal services attorneys will provide legal assistance or representation to unrepresented homeowners at the initial conference in as many cases as possible. Thereafter, the attorney will either keep the case and continue with representation or refer the homeowner to a network of legal services, pro bono or law school clinic counsel who will be standing by to provide additional legal assistance in support of this project."

Of note, the project will be piloted in Queens and Orange Counties and is expected to be expanded thereafter.

My take is that this is an excellent move by the Judiciary. Nonetheless, this program has issues that must be addressed in order for it to be succesful including the following:

There is no constitutional right to representation here as there is in the criminal arena and therefore when this program fails homeowners cannot cite the lack of representation to keep their homes while they (lay individuals) will interpret this program as establishing a fundamental right. Therefore, the legislature must follow with creating a right to give this program real teeth or clearly articulate in public service announcements how it does not.
Introducing homeowners to attorneys at the conference stage means that the homeowners likely already defaulted in the matter because the time to Answer the Summons and Complaint will have expired by this stage. Therefore, the homeowner is left to negotiate a workout while the tides are against them and will also have difficulty defending the action on the merits.
Private attorneys with large hourly fees and budgets have a hard time making it financially viable to perform a forensic analysis of all of the mortgage documents to red flag violations of statute and case law in order to change the bargaining positions of the parties in negotiating a workout (modification, short sale, or deed in lieu), I cannot fathom how the State can afford to provide what theoretically is included in proper legal services, particularly in the face of the major budget cuts being made every day by the Governor.

I am very interested to learn of other peoples thoughts on this topic, so please share either on this blog or offline.

50% of foreclosed homeowners can defend

Andrew M. Lieb Debt Management , Foreclosure Defense

In a great decision for defaulting borrowers, In re Ferrel L. Agard, which can be found by clicking here, the United States Bankruptcy Court for the Eastern District of New York claims to be setting precedent whereby Mortgage Electronic Registration System (MERS) lacks the authority to assign or foreclose a mortgage.

Prior decisions seemed to state that where MERS was granted the appropriate authority it could assign or foreclose a mortgage. This decision seems to intentionally and expressly state otherwise.

Citing the Court: "MERS and its partners made the decision to create and operate under a business model that was designed in large part to avoid the requirements of the traditional mortgage recording process. This Court does not accept the argument that because MERS may be involved with 50% of all residential mortgages in the country, that is reason enough for this Court to turn a blind eye to the fact that this process does not comply with the law".

For those who are unaware of MERS and its role in our mortgage system, Judge Grossman's point is that MERS was designed to provide a database which allowed its member banks to electronically self-report transfers of the Note in an effort to circumvent governmental real estate recording systems and therefore should not be afforded anything, but a strict interpretation of its authority. You mess with the government and the government will win.

For the lawyers who read this blog, the key words used by the Court are as follows: "MERS admits that the very foundation of its business model as described herein requires that the Note and Mortgage travel on divergent paths. Because the note and mortgage did not travel together, Movant must prove not only that it is acting on behalf of a valid assignee of the Note, but also that it is acting on behalf of the valid assignment of the Mortgage."

WOW!!! - I'm betting this goes to the Supreme Court.

Of note, the Court in this case ruled in the lender's favor on a different argument, but made this decision nonetheless for the stated purpose of defining MERS' authority.

Winding down Fannie Mae and Freddie Mac

Andrew M. Lieb Debt Management , Foreclosure Defense

On February 11, 2011, the Obama Administration (through the Department of the Treasury and the Department of Housing and Urban Development) delivered a report to Congress that provides a path forward for reforming America’s housing finance market - LOANS WILL NEVER BE THE SAME.

To read the report, click here.

Key in the report is the need for:

More rental options through lending to the multifamily market
Increased coordination between governmental finance options
Increased availability of low income housing
Consumer protection
Lowering the maximum LV Ratios

Minimum of 10% down payment for governmentally backed loans
Lower conforming loan limit (highest loan amount for governmentally backed loans)
Decreased maximum loan size that can qualify for FHA insurance (goal - lowering market share of FHA from 30% to 15%)

Transparancy for investors through disclosure of information on the credit, geographic, and demographic characteristics of the underlying loans that are packaged into securities
Higher capital retention by lenders (originators retaining 5% of loan risk in securitization)
More conservative underwriting standards
Regulation of mortgage originator and servicer standards
Private guarantees of mortgages and public guarntees with increased cost to reflect risk

Interestingly, this is a small government report coming from a democratic administration. Yet, remember this is just the administration's views and will require legislation from the Congress before its enacted. In fact, it only offers 3 options into the future, not a clear direction. Nonetheless, real estate professionals should start hedging their strategies based upon this report as those who leverage change in market principles will get ahead financially.

My takeaway is to concentrate on the rental markets because the administration's plan is ultimately to eliminate a homeownership option for speculators - individuals without the means to afford a mortgage without appreciating home values. Therefore, many potential homeowners will be pushed out of the market to purchase and placed into the rental market.

Of note, the report makes frequent mention of the The Dodd-Frank Act as the first steps towards the administration's goals. Therefore, a careful review is required by real estate professionals.

Lastly, the report discusses loan steering and a new requirement that loan originators will have to perform due diligence of borrowers' claimed finances to determine a borrower's ability to repay a loan. These are many of the topics that are being heavily litigated in the foreclosure world today and I believe that this report will strengthen the position of homeowner who seek a modification in foreclosure. If nothing else, the report requires national standards for loan servicing, which is the entity charged with negotiating a mortgage workout with a borrower - this will HELP!

Short sale professionals; the report also addresses working with second liens in mortgage workouts, this is a must read.

Don't take the kitchen sink after foreclosure

Andrew M. Lieb Foreclosure Defense , Mortgage Trouble

If you are being foreclosed upon and are angry as hell, you should nonetheless think twice before destroying the house to get your revenge. The reason is that destroying the house may prevent you from avoiding the deficiency judgment, in its entirety, in a subsequent bankruptcy. This is talking about the amount of money your house is upside down that you may otherwise owe for 20 years because the sale of your house at a foreclosure auction fell short of the number.

The reason is that Bankruptcy Code section 523(a)(6) states as follows:
A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt—for willful and malicious injury by the debtor to another entity or to the property of another entity;

To read a great article on the topic, I refer you to a great local bankruptcy practitioner's blog by clicking here

New Home Purchase after Foreclosures

Andrew M. Lieb Foreclosure Defense , Mortgage Trouble

Fannie Mae & Freddie Mac Guidelines:

Foreclosure = 6 years
Short Sale = 3 years
Bankruptcy = 2 to 3 years

New HAFA Short Sale rules for 2/1/11

Andrew M. Lieb Foreclosure Defense , Mortgage Trouble

Treasury has released amendments to the HAFA program effective February 1, 2011. To review the amendments, click here.

Most interestingly, Front-End Debt-to-Income Ratio analysis is no longer required and new rules for vacant properties are provided.

Now: A property vacant for less than 1 year can be considered, which is a lot more time than the 90 days that was previously allowed. Also, the applicant no longer needs to justify their relocation based upon employment requirements.

This new vacant property rule brings the program close to reality where many distressed homeowners simply leave their home when times get tough. Its a great move by Treasury because now more abandoned homes can be brought back to life with new homeowners.

Ways Home - Are having trouble making mortgage payments?

Andrew M. Lieb Debt Management , Foreclosure Defense

Fannie Mae has launched a new interactive video website where homeowners can role play scenarios to learn their options when struggling with mortgage payments. As an attorney, I fully endorse this product and hope that every individual in pre-foreclosure will go to this website and check it out. The video translates scary legal terms into plain English and offers a great explanation of a homeowner's choices when facing a financial hardship. Additionally, the video appears to be Fannie Mae's attempt to employ public health behavior change techniques into our country's mortgage epidemic. The key takeaway for me is that homeowners should not be ashamed by their situation and should proactively seek out help in taking control of their mortgage problem.

Click here to try it out.

WARNING - This video dissuades anyone from using any professional instead of a HUD Housing Counselor. While I agree that HUD Housing Counselors do offer a lot of great help, which should be taken advantage of by individuals in pre-foreclosure, if you receive a Summons in the mail you must Answer the Summons and you do require legal advice. Go see a lawyer immediately.

Southampton Press - Underwater Mortgage Options by Brandi Buchman

Andrew M. Lieb Foreclosure Defense , Lieb at Law UPDATES

To read a very well written article about different perspectives on facing foreclosure click here. In full disclosure, I am quoted in the article.

There are approximately 78,000 pending foreclosure cases in NY

Andrew M. Lieb Foreclosure Defense ,

To read a fascinating report on the current state of foreclosures in NY brought to you by the Chief Administrator of the Courts click here.

Some highlights include the following:

Over 20,000 more foreclosure cases were pending in 2010 than 2009;
40% of the total cases pending in Supreme Court Suffolk County are foreclosures;
This year through October 42,536 foreclosure cases had settlement conferences;
In 2010, the default rate on appearing at any point during a foreclosure case was 20% by homeowners;
Only 27% of homeowners have representation during foreclosure settlement conferences; and
This year through October only 4,062 settlements occurred in foreclosures.

Debt-to-Income ratios get tougher by FANNIE MAE

Andrew M. Lieb Foreclosure Defense , Mortgage Trouble

At the beginning of our recent class, entitled Mortgage Mania at Bethpage FCU, I was asked a question, which was more like a statement, inquiring if a lower Loan to Value (L/T) ratio (more money down) was a key predictor of default risk.

IN ENGLISH - If a borrower puts down more money (has more equity) shouldn't that imply they won't default? I took issue with this statement by saying that I believe that back-end Debt to Income (DTI) ratio mattered a hell of a lot more. My rationale was that even if you had a lot of skin in the game, your inability to make your mortgage payments trumped your desire to make your mortgage payments. The student took issue with my sentiment throughout the class thereafter by defending his position.

It’s true that both L/T ratio and DTI ratio are relevant and evaluated by lenders in making a loan. Yet, my message was that DTI ratio is much more important in making the determination to provide funding.

It turns out that FANNIE MAE agrees. They just changed, effective December 13, 2010, their requirements with respect to each of the above discussed ratios. Specifically, maximum DTI ratios for a conventional mortgage change from 55% to 45% under the new guidelines. Additionally, borrowers can now utilize gifts and grants to satisfy their minimum down payment, which impacts the L/T ratio. To read a great New York Times article that summarizes these changes, click here. Remember, that FANNIE MAE sets the standards for the rest of the industry because they are the largest secondary market purchaser, so this will likely become the standard.

The takeaway for students reading this blog is that a lender cares more about your ability to pay (how much money you have left at the end of the month after paying your other bills) as opposed to your desire to pay (how much equity you have to lose if you don't pay).

Spinner overturned - enforcement of the CPLR 3408 Foreclosure Settlement Conferences' good faith requirement held unauthorized

Andrew M. Lieb Foreclosure Defense , Mortgage Trouble

Appellate Division, Second Department, held in an unsigned ruling that the "severe sanction…was not authorized by any statute or rule…nor was the plaintiff given fair warning that such a sanction was even under consideration." "The reasoning of the Supreme Court that its equitable powers included the authority to cancel the mortgage and note was
erroneous, since there was no acceptable basis for relieving the homeowner of her contractual obligation to the bank," - IndyMac Bank, F.S.B. v. Yano-Horoski, 17926/05.

Thursday, December 26, 2013

Wednesday, October 16, 2013

Tuesday, September 17, 2013

Thursday, September 05, 2013

Monday, August 26, 2013

Wednesday, May 01, 2013

Friday, April 19, 2013

Tuesday, April 02, 2013

Wednesday, February 16, 2011

Monday, February 14, 2011

Saturday, February 12, 2011

Friday, January 21, 2011

Monday, January 17, 2011

Saturday, January 08, 2011

Thursday, January 06, 2011

Friday, November 26, 2010

Sunday, November 21, 2010

Saturday, November 20, 2010

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