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Ignoring a Foreclosure Action: This is usually a bad idea!

Ignoring a Foreclosure Action: This is usually a bad idea Some homeowners when facing foreclosure bury their heads in the sand. They find the issue of losing their home so depressing they simply wish to remove it from their minds and therefore they just ignore it. Eventually the homeowners will receive other documents from lawyers soliciting them to represent them in foreclosure or they will receive documents from the bank’s attorneys with regard to their moving ahead with the foreclosure process. The homeowner will receive a motion for summary judgment, and eventually they will receive notice their home is going to be sold. If this happens the homeowners should immediately contact an experienced foreclosure lawyer. However, if the homeowners don’t initially do this and somewhere in the process they wake up, it is generally not too late to stop the home from being sold in foreclosure.

Foreclosure Attorneys

Foreclosure attorneys can assist homeowners in raising defenses in the foreclosure lawsuit. These defenses involve the underwriting process involving the foreclosure, the standing of the financial institution to bring the lawsuit, issues involving predatory lending, violation of Truth in Lending Laws, the conduct of the financial institution who initiated the foreclosure and issues involving the mortgage itself. When these defenses are submitted they can potentially cause a foreclosure lawsuit to be eventually dismissed. They also delay the foreclosure lawsuit from moving forward and give the homeowner the leverage to negotiate a mortgage modification.

Homeowners Staying in their Homes

Elliot Schlissel When represented by an experienced foreclosure defense law firm the foreclosure litigation can end up being a long process. The specialized knowledge of a foreclosure defense lawyer can greatly increase the potential the homeowners will be able to continue to live in their homes.

Elliot S. Schlissel is a foreclosure defense lawyer representing homeowners throughout the Metropolitan New York area for more than 3 decades. He offers free consultations and can be reached at Elliot@sdnylaw.com or 800-344-6431. The law firm maintains offices in Nassau, Suffolk and Queens Counties.

Foreclosure Sale During A Divorce

Today’s video blog we talk about how a court recently decided regarding a home in foreclosure during a divorce proceeding:

Elliot S. Schlissel, Esq. can be reached at either 516-561-6645 or 718-350-2802, or by email to schlissel.law@att.net.

Foreclosure Action Stopped by Death

Nettie Francis had executed a mortgage. The holder of the mortgage brought a foreclosure lawsuit against her. In May of 2010, the court had declined to sign a proposed judgement of foreclosure and sale. The court took this action because there had not been a submission of an order showing the mandatory residential foreclosure court conference had been held in the case.

Husband Seeks to be Named Administrator of Wife’s Estate

In July 2010, Nettie died. Nettie’s husband brought an action to intervene in the case. In this proceeding he submitted, to the court, a death certificate proving Nettie died in July 2010. His paperwork also showed since her death he had been taking care of the home. He indicated in his motion he was in the process of bringing an application in the Surrogate’s Court to be appointed the administrator of Nettie’s estate. He brought this action as an intervenor to be named a defendant in the foreclosure lawsuit.

Counsel for the financial institution argued against Nettie’s husband being allowed to intervene in the lawsuit. He claimed this application didn’t set forth a claim or defense for which the intervention in the suit was sought. He also claimed the motion being made by the husband was not made in a timely basis.

Supreme Court Justice Robert McDonald sitting in Queens County held the death of a party divested the court of jurisdiction. Upon Nettie’s death the proceedings were automatically stayed. The proceedings could not proceed without the substitution of a personal representative or an executor for the deceased party.foreclosure advocate

Foreclosure And Your Credit Score

foreclosure defense and bankruptcy attorneysIf your home goes into foreclosure it will have a negative impact on your credit score. However, the nature and extent of the negative impact may be different than what you believe it to be. When a financial institution brings a foreclosure lawsuit related to a mortgage default, the institution will normally report to the credit agency there is a foreclosure or a home has been foreclosed upon. This information on your credit score will not necessarily impact on the outstanding balance it shows you owe on the mortgage. The credit report will most likely continue to show the entire outstanding balance of your mortgage being due and owing on your credit report. This negative credit material can stay on your credit report for seven years.

Sales Of Homes In Foreclosure

At the end of the foreclosure process, if the bank is a successful, your home will be sold. In the event the sale of your home at the foreclosure sale does not pay off the entire outstanding debt due in owing on your mortgage, the remaining balance may be shown on your credit score as a “deficiency “. The financial institution may be able to bring a proceeding to collect on this deficiency amount. If they do not take action to collect this deficiency they can report it to the Internal Revenue Service as a forgiven debt. This will cause you to receive a 1099 showing the deficiency as income to you in that tax year. This will cause you to pay income taxes on this deficiency debt!

Foreclosures On Second Mortgages

When the financial institution forecloses on a first mortgage, the second mortgage may continue to be maintained on your credit report by the credit reporting agency. The second mortgage will not show it was foreclosed on because it is a separate and distinct financial obligation.

Bankruptcy And Foreclosure

It may be necessary to file a Chapter 7 bankruptcy to eliminate deficiency judgments related to first mortgages and the personal obligations on a second mortgage. To better understand the inferences and long-term impact on your credit score it is strongly suggested to contact either a bankruptcy lawyer or foreclosure lawyer.foreclosure and bankruptcy  assistance

Governor Cuomo’s Buyout Plan for Homes Destroyed by Superstorm Sandy

foreclosure defense attorneyGovernor Cuomo wants to utilize four hundred million dollars of federal housing money to fund a buyout program of homes destroyed by Superstorm Sandy. Governor Cuomo had stated these homeowners are trapped because no one will buy their home since it was destroyed and it was in a flood zone. He wants the state to pay one hundred percent (100%) of the pre-storm value of these homes. Governor Cuomo seeks to target the hardest hit areas with his buyout plan.

Qualifying for the Buyout

For a homeowner to qualify for a buyout, the home must have sustained more than fifty percent (50%) damage. This damage must have reduced the home’s value by more than half of its pre-market value. In addition, the governor is working with both Nassau and Suffolk counties to provide funds for homeowners to raise the elevation of their homes and to rebuild their homes stronger so they will withstand future storms. Governor Cuomo stated, AI would rather spend more money and build back a home the right way, with the right design and the right technology, than build it back in two years and in four years and in six years.

Governor Cuomo was confident since New York State has been awarded thirty billion dollars by the Federal government there would be sufficient funds to cover these buyouts.

About the Author

homeowner advocateElliot S. Schlissel, Esq. has been representing homeowners throughout the metropolitan New York area for more than twenty five (25) years regarding real estate issues, issues concerning fraudulent foreclosures, loan modifications, and improper bank practices andforeclosures. His law firm seeks to keep homeowners facing foreclosure in their homes.

Strategic Defaults

Walking Away From Your House

Strategic default is the new concept in how homeowners are dealing with mortgages on homes that are underwater. A strategic default is simply when you stop paying your mortgages . Many homeowners are considering strategic defaults on their mortgages. It is estimated that over eleven million homes are now underwater in America. More than three and a half million homeowners are behind in their mortgage payments. There are already a million and a half homes currently in the foreclosure process.

The New York Federal Reserve estimates that there are an additional 3.6 million foreclosures that will be taking place in the next few years. Does it make sense to keep paying a mortgage on a home where it will be many years before the home regains its former value? A columnist named James Surowiecki recently wrote in the New Yorker Magazine that paying mortgage payments for a home that is underwater is “setting a pile of money on fire every month”.

Mortgage Payments: A Moral Quandary?

For some families there is a moral quandary in making the decision to stop making mortgage payments on a home that is underwater. Should families be embarrassed or feel they are going to lose respect as they break their mortgage contract obligations and stop paying their mortgage? Companies utilize the bankruptcy process to default on their financial obligations when they feel it is appropriate. So why shouldn’t individuals consider it is a business decision as to whether they should pay their mortgage payments when their home is underwater and it is unlikely it will ever get back to its former value at anytime in the near future?

Penalties For Not Paying Your Mortgage

Obviously the first penalty is that your home will eventually go into foreclosure. However the foreclosure process in the State of New York, as in most other states, is a slow process. This means you won’t be forced to leave your home in the short run.

The second issue involves your credit score. Not making mortgage payments will definitely have a negative impact on your credit score. It is estimated that your credit score will go down a minimum of 85 to 100 points if you default on making mortgage payments.

Strategic default is not something to be taken lightly. It should be considered as a last option. Your first option should be to make a mortgage modification. Mortgage modifications allow you to rework your mortgage to more favorable terms.

If you decide to strategically default you should save the funds that had formally been allocated to make mortgage payments. This will give you the ability to retain an attorney to fight the foreclosure in court. It will also give you money for a down payment on an apartment that you may need to rent down the line.

Tax Implications of Strategic Defaults

If a portion of your debt is forgiven by a financial institution the forgiven amount is considered taxable income by the Internal Revenue Service. You may end up receiving a 1099 from your bank that you will have to declare on your income taxes. You should talk to a tax professional with regard to how to handle this tax issue.

Strategic defaults are not for everybody but more and more people are making this choice!

Foreclosure Lawyers

If your house is in foreclosures we can help you. The Law Offices of Elliot Schlissel have been helping New Yorkers stay in their homes. To start with we can help you with the mortgage modifications. We are familiar with the problems mortgage modification programs have. We can also assist you with a forensic audit with regard to your mortgage. Should you be served with a summons and complaint we will appear in court for you and attend settlement foreclosure conferences. During these conferences we will press the financial institutions to cooperate in giving you a mortgage modification. We will submit answers to the formal compliant submitted by the banks. Our answers will allege defenses such as defective mortgages, defective foreclosure law suits, predatory lending, foreclosure fraud and other real estate related defenses.

We will advise you with regard to all of your foreclosure options. One of your options may be a foreclosure related bankruptcy. There are two types of bankruptcies that can be utilized in foreclosure. A Chapter 7 bankruptcy and a Chapter 13 bankruptcy. There are benefits and drawbacks to each of these bankruptcies. When you file bankruptcy it immediately stops creditor harassment. All debt collection activity has to come to an end when a creditor receives notice of a bankruptcy filing. Foreclosure proceedings also are immediately frozen upon the filing of a bankruptcy. At the end of the bankruptcy process you receive a discharge of your debts. We educate our clients with regard to reestablishing credit and the end of the bankruptcy. There are many bankruptcy myths such as you will never receive credit again that are simply untrue. At your initial free consultation with our office will we describe the bankruptcy process. We will explain to you what bankruptcy exemptions are and why it may be necessary to file bankruptcy. Feel free to call us for a free consultation 1-800-344-6431, 516-561-6645 and 718-350-2802.

Bankruptcy, Foreclosure and Divorce

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If one of the parties to a divorce action files for divorce, can he or she later file bankruptcy during the course of the divorce? The answer to this question is yes. Now let’s change the circumstances a bit. A husband and wife are involved in a divorce and during the course of the divorce, the husband is ordered by the court to make mortgage payments. Unfortunately, he falls behind in the mortgage payments. Is filing for bankruptcy the best route to stop the house from being foreclosed upon? The answer to this question in many instances is yes.

Chapter 13 Bankruptcy

In a Chapter 13 bankruptcy, the debtor sets up a plan to reorganize his or her debts. The plan is designed to bring the debtor up to date on his or her debts during a period of three to five years. The amount of the payment pursuant to the bankruptcy plan is based on the debtor’s income.

Debts are classified into various types within the plan. Unsecured creditors, such as debts related to credit cards, may be paid on a percentage of what is owed. Interest and penalty payments to these creditors are eliminated in the plan.

Mortgage Payments

Secured creditors, such as mortgage holders on real estate, are paid 100% of what they are owed under the plan. Banks holding mortgages who have refused to accept payments from the debtors are now forced to accept mortgage payments from the debtors under the bankruptcy plan.

Bankruptcy Protection for the Spouse

Under the bankruptcy law, child support and spousal maintenance payments are non dischargeable debt. This means a father obligated in the divorce to pay spousal maintenance and child support to his wife cannot eliminate these debts. Financial obligations of the payer’s spouse, under court orders of the divorce to make mortgage or home equity line payments, are considered to be part of the spousal maintenance and child support payments and these obligations are also non dischargeable in bankruptcy.

Chapter 13 bankruptcies can successfully be utilized to give a spouse who has obligations to make mortgage payments and pay spousal maintenance and/or child support an opportunity to come current in these obligations, save the home from being sold in foreclosure and comply with the state court order.

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Foreclosure Defense

The foreclosure defense lawyers at the Law Offices of Schlissel DeCorpo have been representing individuals with financial difficulties for more than three decades. Our office helps our clients prepare mortgage modification applications. We also deal with mortgage modification programs that fail to meet our clients’ needs. We defend foreclosure lawsuits for our clients. We attend foreclosure court conferences, litigate defective foreclosure lawsuits, predatory lending issues, defective mortgages and bad faith on behalf of financial institutions. We also assist our clients with other types of real estate litigation. Should bankruptcy be the route to dealing with our clients’ problems, we file both Chapter 7 and Chapter 13 bankruptcies on behalf of our clients. Feel free to call us for a free consultation at 1-800-344-6431, 516-561-6645 or 718-350-2802.

New Bankruptcy Law Exemptions in New York

bankrupt1-150x150Homeowners previously had an exemption of $50,000 for the equity in their home. Now each party on the deed has an exemption on Long Island for $150,000 in equity on their home. Therefore, a husband and wife who own a home together have $300,000 in exemptions when they file bankruptcy. This means homeowners on Long Island can file a Chapter 7 Bankruptcy, have $300,000 of equity on their home and still beat their creditors!!

New Bankruptcy Exemption Law in New York

The new bankruptcy law went into effect on January 22, 2010. In addition to the home equity allowances, new rules concerning jewelry, art, a computer, a cell phone, pets and pet food have been listed to the exemptions. The new bankruptcy exemptions are designed to reflect the current valuation of homes and the costs of living in New York.

We’ve anticipated that there will be more bankruptcy filings in New York State due to the liberalized exemptions. With $300,000 in exemptions, most middle class families in financial trouble will be able to file bankruptcy on Long Island and still keep their homes. This will make filing a Chapter 7 ( or straight bankruptcy) a better option for homeowners with credit card debt and other financial obligations.

Under the new exemptions, renters can now use the homestead exemption and claim another $1,000 in personal property or cash as an exemption in their bankruptcy. The new law also allows New Yorkers to choose between the Federal Exemptions and the State Exemptions when they file bankruptcy. Homeowners facing foreclosure now have a better option when they file bankruptcy.

New York and Long Island Bankruptcy Attorneys

At the Law Offices of Schlissel DeCorpo, we have been filing bankruptcy for our clients for more than thirty years. Our office has been involved in more than four hundred bankruptcy cases on behalf of our clients. We file Chapter 7 and Chapter 13 bankruptcies. We discuss with our clients the type of bankruptcy that is best for them. We help our clients reestablish credit. We can, in some situations, eliminate second mortgage liens. The bankruptcies we file can be utilized to stop foreclosures. In addition we provide detailed foreclosure defense representation for our clients. We assist our clients in mortgage modifications. We maintain a foreclosure blog to provide information on foreclosure issues for our clients. We litigate defective foreclosure lawsuits, predatory lending, defective mortgages and bad faith on behalf of financial institutions. Feel free to call us for a free consultation at 516-561-6645, 718-350-2802 or 1-800-344-6431. Our phones are monitored 24/7.

JP Morgan Chase Suspends Foreclosure Activities

foreclose-150x150JP Morgan Chase previously announced that it was seizing all further legal action on 56,000 pending foreclosure proceedings. The bank is taking this action due to the fact that its employees have improperly prepared legal documents related to foreclosure proceedings.

These suspensions took place in the 23 states where foreclosure lawsuits must be approved by a court.

New York is one of these states! Chase Manhattan has started an investigation examining their employees actions in foreclosure proceedings. Chase is the third financial institution to take this action. GMAC and Bank of America have already taken similar actions.

Chase has acknowledged that their employees who signed numerous documents related to foreclosure proceedings have signed so many documents that they are now referred to as “robo-signers”.

Lawyers in foreclosure proceedings representing homeowners have uncovered that individuals have signed as many as 10,000 affidavits a month. Query: Is it possible they actually read these affidavits? These affidavits indicate that the person who prepared them reviewed the mortgage file. There was not sufficient time to review the mortgage files.

The courts expect numerous foreclosure proceedings brought by Chase Manhattan to be contested by attorneys who represent the homeowners. Due do uncovering this new information, it is expected that courts will look more carefully at the documents in proceedings brought before them involving the foreclosures of these homes. The solution to this foreclosure crisis is for the banks to become more realistic, more accessible and more willing to provide the homeowners with mortgage modifications.

Our law office can help you with foreclosure defense, foreclosure conferences, mortgage modifications, Chapter 7 bankruptcy and Chapter 13 bankruptcy.

Bank of America and Foreclosures

BankOfAmericaBank of America is the largest bank in the United States. They have recently taken action to stop moving forward with foreclosures throughout the United States. Allegations have arisen with regard to how the bank is handling the foreclosure process. Bank of America is among many large financial institutions which also include Chase Manhattan and GMAC that are reexamining how they handle foreclosures.

Document Problems

Bank of America, GMAC and JP Morgan Chase have uncovered problems with the documents they have utilized in processing foreclosure proceedings. Attorneys representing homeowners who homes have been foreclosed upon are developing new and innovative defense techniquess to deal with the document crisis created by the financial institutions.

Attorney Generals in California, Connecticut and Florida are investigating the materials submitted by various financial institutions in foreclosure proceedings. The Associated Press recently reported that a Bank of America official acknowledged that she signed up to 8,000 foreclosure documents per month without reading them. Consumer advocates claim that there are numerous problems with the foreclosure process.

Should you find your home in foreclosure, please call our offices 1-800-344-6431 or contact us by email. Our law firm has represented individuals in debtor/creditor matters for more than 30 years. We are experts in handling foreclosure defense, foreclosure conferences, mortgage modifications, Chapter 7 bankruptcy and Chapter 13 bankruptcy.

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