Keep Home Your Own : New York Real Estate Lawyers & Attorneys : Rubin & Licatesi Law Firm : NY Loan Modification, Foreclosure : New Jersey, Long Island

In our neighborhoods and backyards, our friends are sure to share many similarities. Whether we live in the outskirts of Buffalo, (which parenthetically is home to the largest foreclosure law firm in New York State), or in a more run-of-the-mill community akin to Garden City, (which is where our law firm is based and houses a much more modest foreclosure defense law firm), we are sure to see a senior citizen who is a neighbor and homeowner, one who moved in many years prior to us and who remains somewhat as the "watcher of the block".
These senior neighbors are reliably quick with a set of very specific instructions on things like where you may park your car and when you can put out your garbage cans or even the days they prefer not to have your lawn mowed. These senior neighbors may also not be quite as vocal, but prefer to remain in the background of community affairs, coming out only on the rare occasion. Would you ever care to guess what’s going on in their backyards and living rooms during these most hard pressed of times?
Last week, unable to cure their own ills of foreclosure, I received two inquiries concerning the plight of our senior citizens and a foreclosure action. The cases were as different as night and day but both cases were almost exactly of the same concern. Similar worries and nightmares were shared by different people in the metropolitan area. I listened with extra care as the case unfolded. My inrterest was immediate, as the new clients were golden-agers, people over 62 years of age, homeowners, and both deeply involved in their own quest to keep their homes.
They told me that they received a notice several months ago. Maybe it was a summons and complaint and they recently appeared in court, without an attorney. After submitting many papers to their lenders, their loan modification requests were denied and their cases summarily transferred out of the safety of the foreclosure settlement part of the case. One of the clients phrased it that her home was "released" from the part and the foreclosure case was moving forward again.
In our law firm, we find this a most unforgivable ending. Our blog “KeepHomeYourOwn” is written and intended to prevent the destruction and chaos of a foreclosure sale. With respect to seniors and the foreclosure process, we spoke with Martin Dekom, Jacob Dean Mortgage, a senior reverse mortgage specialist. We spoke in great length on the topic of terrified homeowners who have paid their bills for decades and now have earned this most unjust reward of foreclosure. He has a solution, it refers to the Brooklyn Dodgers, and he isn’t crazy.
Decom says, "Many older homeowners have a solution in the reverse mortgage. The basic qualification is you must be old enough to remember the Brooklyn Dodgers (that is, you must be of a certain age). This is a program without a monthly payment, available to those 62 and older who live in the house as their principal residence and want to keep their home. The loan only becomes due when the homeowner dies, sells or moves out. Foreclosure is not a part of this process. A homeowner in foreclosure can be saved with a reverse mortgage if the amount owed is 60% or less of the value of the home. This number varies with the age of the borrower: the older the borrower, the more money is available, up to about 80%, with a maximum of $495,000. Cases of negotiated short payoffs can also be developed to save the home and avoid foreclosure.
It can be nerve-wracking, but bear in mind that lenders don’t want the homes; the lenders want their money. Consider three things: experience, cost and cost. Comparison shop before moving forward with a reverse mortgage and keep it in the toolbox as a resource to save your home from foreclosure”
We are currently in the process of discussing a reverse mortgage loan analysis for these clients, in addition to reviewing the court documents and producing a functional defense to help keep their homes. Quick decisions rarely bring value to complex situations. Seniors were fair game in the years of free money, deceptive lending practices and sub prime loans. It is now our obligation and responsibility to peer over our fences and ask of our senior neighbors if help or consultation is necessary as they suffer silently the disease of the distressed loan. Help with reverse mortgages is available at KeepHomeYourOwn.
 

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In 2008, Bank of America assumed ownership of Countrywide Financial Corp., which at the time was the top mortgage servicer in the United States.  This month witnessed a $108 million dollar settlement in a case brought by the Federal Trade Commission which affected more than 200,000 consumers who may be in line for refunds for foreclosure fees which were excessive and deemed illegal.  This sum is staggering, but far less so when compared to the fact that its portfolio was greater than $1.4 trillion dollars.

In essence, a mere distraction. 

In numbers far more understandable for most, lenders have “ramped up the face of completing those forestalled foreclosures” according to RealtyTrac. Monthly recordings of foreclosed properties show more than 400 homes were lost in the foreclosure sale process.  New filings continue to climb from a similar period last year with Suffolk Nassau and Queens County pre-foreclosure warnings leading the pack in New York State.  Homeowners must be served with this “90 day” notice as a mandatory and regulated warning under our state laws before a foreclosure summons and action can be initiated by a lender.  

Loan modification: Fallen out of favor?

This data confirms a recent speech by Hon. Sheila Bair, the chairwoman of the Federal Deposit Insurance Corporation (FDIC). Blair states, “Sustainable homeownership is a worthy national goal.  But……when there are other, equally worthy solutions……homeownership may not be the right answer”.

  We find ourselves right in the middle of our nation’s absolute worst financial and economic crisis as it affects homeownership.   The bigger numbers show trillions of dollars in pooled loans and investor and servicing agreements most certainly far beyond our imagination.  The more comprehensible figures detail hundreds of homes and thousands of families in default and at risk of losing their homes. But our Federal Government and its agencies’ speechwriters and presenters now seem to choose phrases noticeably absent of the words which we have grown to take comfort from.  

Loan modifications and incentive plans to keep home your own appear to have lost favor.   Chief executive John Taylor of the National Community Reinvestment “ because of a home’s appreciation, which gave people the opportunity for wealth creation that would otherwise have remained out of reach”.  These are not causes and issues for debate at a time when a family calls our law firm in crisis.  Not a single client debates whether the social pathos is a logical choice or if their belongings and children’s bedrooms should be emptied by a Marshall doing his job at a foreclosure auction.  

Where is HAMP now?

To state the obvious, HAMP was designed to save our homes, our communities, our churches, stores and neighborhoods. But has it?  We care little if the multi-million dollar loan pools and the model makers were right or wrong in buying, trading and selling our home mortgages.  There is no uncertainty that the Wall Street creations dating back to the beginning of this century have left millions of Americans now searching for paths of solution when served with a foreclosure summons. 

We read that our government’s inventory of housing stock, through Fannie Mae and Freddie Mac, represents the largest landlord in this great nation, with new foreclosed homes coming “every 90 seconds during the first three months of the year” according to numbers written in an article by Binyamin Applebaum in the NY Times. 

When I meet with families involved in a foreclosure action, many of them have no recollection of the papers signed or the significance of the paperwork contained in their files.  I implore them to search for these documents and to bring them in to the office.  Together, we find a way, and the absurdity of losing their home at a foreclosure sale begins to formulate a definite path and defense.  

The potential for millions of illegal loans

Consider the millions of loans closed with perhaps the trillions of documents created; the potential for excessive and illegal fees in the origination process as well as other defects now being realized for the first time. As these loans are litigated and brought into the courtrooms of New York State, our judiciary is called upon, for the first time in our history, to analyze and question the ability to proceed to foreclosure. 

There is no such concept as indefensible power, and our law firm focuses upon foreclosure defense to protect and keep home your own.  With the new laws and statutes enacted by the Legislature of our state, we do not yet have a firm grasp on the results of many of the foreclosure cases.  However, I witness on a regular basis solutions and saved homes for families who would otherwise become victims of the foreclosure crisis.  

The power to defend against foreclosure is now a protected right in New York State and we argue against foreclosure and tragedy on a daily basis.  If you face a pre-foreclosure notice or a foreclosure summons, keep home your own and call us to consult and discuss your rights to defend and protect all that you earned when you decided to become a homeowner.  Keep home your own is a mantra to be jotted down and read often, to keep focused on avoiding foreclosure.

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There is much more ahead in the current mortgage foreclosure crisis. Temporary assistance programs designed to benefit those in desperate need have seen record numbers of applicants. Our scheduled foreclosure sales and related foreclosure court parts have rapidly expanded to meet the growing demands of our nation’s largest lenders. Loan modification companies have been branded outlaws. Non-profit housing counseling agencies and local bar associations offer pro bono services to the homeowner in distress and remain hugely under-funded. Welfare, foreclosure, mortgage defaults and economic shockwaves with record job losses are ripping up the very fabric of American dreams and aspirations.

We are a country torn to pieces. And yet we continue to scan for hopes and rays of ways to keep our homes. Even in the first days of this crisis, homeowners sought out methods and created new initialed programs to save our homes and neighborhoods from the permanent scars of a foreclosed home on our block. Have our bankers and financial decision makers designed anything of substance to tilt the balance of delinquencies back to successful modifications?

One might think that the repayment of the TARP loans by the largest lending institutions would give pause to auction sales, and lend a great weight to the recovery, After all, with Detroit now competing successfully against the biggest of the foreign automakers, and Congress’s measures to strengthen and guarantee absolute continuity for our largest banks, the shockwaves felt during the past several years cannot reoccur. The unexpected has been measured and the Treasury Department has seen us through the worst of times. Have we saved ourselves?

Toxic Loans: Gone Missing?
Where, however, are the millions and billions of dollars of toxic loans gone? Our houses and bricks are still here. Although we are told that our debt crisis has been solved, who has identified the mass exodus from these mortgage delinquencies? Clearly these complex trails of destruction lead to the thousands of pieces necessary for the picture puzzle solution.

From experience, and first hand participation in the trenches of this foreclosure crisis, the pieces connect when a family reaches out with a call to our law firm looking to keep home their own. Perhaps an email describes a homeowner’s many months of non-payment, followed by years of submitting pay stubs and tax returns, letters of hardship and financial statements, only to result in a notice of sale for a week from Wednesday. The harsh reality of a Marshall entering the front door and demanding that you take your children, parents and loved ones and vacate immediately begins the process of connecting the pieces. On the surface of such a call or an email is fear, but beyond the fear of loss is the unremitting intention to prevent the foreclosure sale and the desire to sustain the home which pushed the homeowner to reach out to our lawyers.

Successes, One by One
This is not about your lenders controlling the process and the evictions. It is about our clients beginning to read and witness that the litigation path is a roadway of success and solution. One by one, a home is saved. One by one, a family talks about an order to show cause and a motion to vacate a default judgment. One by one, a family discusses the sewer-service method banks use to take away their homes as readily as they would discuss a trip to the supermarket.

In our law firm, we argue for education and to bring about an in-depth analysis of the foreclosure laws which present opportunities to the many who choose to keep their homes. You are a named defendant in a foreclosure summons because you own your home and you can continue to own your home by engaging the pieces and challenging the lending practices of the past to bring about the modern agreements and settlements so often seen in our courts on a daily basis. The pieces are in the box but there are moments and observations which are not mere research ideas. These pieces fit together but require your hand and intention to “keep home your own”.

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It’s always an awkward moment at best, and one which leaves traces of indecision, guilt, sleepless nights and sheer panic. An anonymous collections call destroys any momentary peace of mind. Or a doorbell rung at early evening hour by a process server brings an end to months or years of mortgage arrears. Some homeowners threatened by foreclosure simply freeze, paralyzed by not knowing where to go for help or what options are available to them. Foreclosure paralysis has set in. They wait for the banks to act, as eventually banks do, unaware that they had options had they sought them, and feeling lost and alone.

The total number of American families who no longer can take great pride in the struggle for homeownership increases on a daily basis. Just Google the phrase “hardship letters”, a seemingly unknown phrase several years ago, and you can find pages and pages of definitions, examples and related businesses all trying to capture the necessary information for you. Bankruptcy filings have defied imagination and we are told that the current level represents more than an 80% increase over 2007.

It is not unusual for new clients to share with me their experiences over the past several years, using credit cards to pay for daily living expenses and amassing debt well over $50,000. Blame the banks, blame the credit card companies and now we learn that we are also to blame the high priced universities allowing hard pressed students and their families to enter their halls of learning.

Ron Lieber writes in his Sunday N.Y. Times “Your Money” column: “So in an eerie echo of the, mortgage crisis, tens of thousands of people are facing a reckoning. They and their families made borrowing decisions based more on emotion than reason, much as sub-prime borrowers assumed the value of their houses would always go up”, He details the familiar tale of a lifetime of hard work, high morals and devoted effort, yet somehow gone wrong. Yet despite the crash, there is hope and there is recovery.

This is what worries me. Our law firm has taken particular notice of the phone calls, e-mails and test messages from clients, neighbors and families seeking nothing more than an option or choice when faced with the complex issues surrounding their receipt of a foreclosure summons, a notice of foreclosure sale and the countless default demands from their lenders and servicers filtering into their lives. The questions posed are familiar, as I have heard them through the months and years, many times. Will filing bankruptcy stop the foreclosure and help me pay my mortgage? Should I hire a company to negotiate my credit card bills? What about the modification company that advertises they can save my home?

When my clients go these routes, they want to take command but cannot afford to learn the answers and many of them return to our offices with devastating tales of loss and frustration. It’s like the Lost and Found box, where we all go when we leave our violin, briefcase or shopping bag on the train or in a taxicab. They expected a return to tradition where anonymous do-gooders take our precious belongings and entrust them to faceless clerks behind counters and windows to hold until the rightful owner is found.

In a similar return to tradition for those of our clients who face foreclosure and default, we turn to our Courts and judiciary who have been empowered by our legislature to carve out foreclosure settlement parts, conferences and judicial solutions to the economic and social chaos created by financial institutions and their sub-prime borrowing standards. The laws in our great state and our judiciary can serve to protect your rights in a foreclosure action. If you are a defendant in a lawsuit, and as defendant, you have the ability to seek copies of the closing and loan papers signed so many years ago. You can reflect upon the legality of the papers you signed. You may also demand copies of underwriting standards and show whether the lender complied with Federal and State statutes. You may even challenge the manner in which the foreclosure action was commenced against you.

These are your rights, and our courts and judges stand ready to afford you each and every right to which you are entitled as a defendant in a lawsuit. We return to our courts to deal with our national foreclosure crisis. A return to what our great country has always done best as a nation of law and order. We experience immeasurable comfort when we read a decision in favor of a homeowner who has stared down the barrel of a foreclosure action and has come out the victor.
These values are our traditions, many of which our clients know very little about. In our law firm, we don’t expect you to know these skills. We urge you to come in and discuss your concerns and express your families’ intentions on keeping your home your own. Two or three years ago, when we began to focus on helping clients in foreclosure and mortgage arrears to keep their homes, we did not have our present laws. Now, with a certain degree of experience and comfort, we most publicly welcome our clients into the judicial process to discuss the exercise of their rights.

This happens across the board, in and among families and neighbors of all persuasion. As you face this decision, some might ask, “Who can’t participate and who can’t come into court?” The more cynical might even suggest that the homeowner created his or her own dilemma. There may be thousands of wrong reasons not to look at the choices now available to save your home. However, you only need one good reason to overcome your mortgage paralysis and that is to decide to fight to “keep home your own”.
 

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“If mortgage delinquencies are not yet clearly improving, it also appears they are not getting worse. However, a bad situation that is not getting worse is still bad” according to Jay Brinkmann, chief economist for the Mortgage Bankers Association. A Newsday article  by Emi Endo offers additional statistics as it reports that “nearly one in seven US homeowners fell behind on mortgages or were in foreclosure from January through March and roughly one in 10 borrowers nationwide, a record high, missed at least one payment in the first quarter of 2010.”

We are living in a homeowner’s house of cards. Our clients have no margin of error in their family’s financial planning. Some kitchen tables, essentially reserved for family gatherings and mealtime sharing for school reports, job talk and daily exchanges are now resting places for unpaid credit card statements, demand letters from creditors and other evidence of mistaken debts taken during times of plenty. Suffolk and Nassau counties sadly share rankings by the Federal Reserve Bank in the top 50 for distressed mortgage ratios.

Success stories amidst the statistics

Yet despite such seemingly oppressive and disturbing statistics, I witness success stories while working with clients who have received summons and complaints from their lenders seeking to foreclose upon their homes and families. These are not missteps of judgment made while blind to the risks and consequences of unforeseen dangers. These were purchases of homes made by fathers and mothers and people of all persuasion who committed to many of the American dreams and ideals that are almost inborn and inbred from coast to coast.

I like what I see and hear when a new client calls and relive their experience and hope. These clients are the people who listened to our political leaders, our Presidents and Governors and bought homes, bought appliances, bought new cars and created jobs, new schools and new neighborhoods. Our clients waited patiently until they could hardly wait another instant and entered the board of real estate. We have now learned that the foreclosure crisis has invaded not only the subprime market but reaches into the nonprime loans and conventional marketplace. In our law firm, we focus in discussing these issues, not as potential bankruptcy matters and insolvencies, but as a platform to advocate and represent our clients who have received notices of delinquencies and foreclosure summons. Our purpose is to save these homes and investments from foreclosure..

New legislation encouraging

Our legislature has adopted laws, and our courts have enforced these laws. These are effective avenues that encourage homeownership retention but require new commitments on the part of our clients. You can keep your home your own, even in the face of months and months of non-payment. Many solutions and settlements depend upon your new commitment to maintain the stability of your desire to keep your home. Our judges have much less tolerance for the one sided and heavy handed position of yesterday’s lender’s demands to auction off your home.

HAMP and Treasury Guidelines, with servicer agreements, favor so many homeowners who partner their wishes with well placed actions and monthly submissions of income, residency and hardship evidence. Foreclosure settlement parts provide a steady hand and experienced leadership to afford the homeowner the necessary confidence and increased support to keep their homes.

This hopeful message leads to the predictable conclusion that our clients’ closings, their dreams of backyard barbecues and gatherings were not errors of our past. The lending criteria were piled with errors of judgment made by financial giants, many of whom have faded away. But each client who visits with us is a reminder of the strength of our dream of American homeownership. Our homes, shopping areas and office buildings remain as a constant reminder that yesterday’s goals are not to be forgotten.

Our lending and borrowing patterns and programs over the past eight years have saddled our neighborhoods and communities with an enormous sea of debt. In the face of this crisis, new rules have emerged. It is much more than wishful thinking when we say that these new commitments which are offered to save your home can reveal solutions and opportunities to keep home your own.

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Two days ago, after tireless efforts to reach an amicable resolution to a homeowners’ mortgage default, the borrowers transferred title to their home to their lender in a process commonly referred to as a Deed In Lieu of Foreclosure. Many of our clients who have received default letters and correspondence from their servicers have read or have heard that this too, qualifies as a successful modification alternative.

Even a careless examination of this definition would lead many to share a similar conclusion with me that this is not a noble outcome. Were there other key issues to explore that went unanswered before entering into this settlement? We spent months and months discussing alternative options: submitting modification and financial statements, hardship letters, medical opinions concerning the clients, tax returns and pension statements. All this was intended to cause a program and allow this family to recover.

Although our best efforts may have been put forth, my clients gave up. We explored issues of short sale programs, the pros and cons of loan renegotiation, the tax consequences of this process because we were not yet in litigation with the bank. Notwithstanding, the end result was that the course of history was changed for this family, as well as dozens of families in the neighborhood as the stark reality of a deed in lieu of foreclosure challenges their property value when it is recorded.

Staggering Statistics
The trend in our neighboring communities of foreclosures and defaults increases despite reported Federal and State programs allegedly initiated to protect against the loss of our homes. Long island alone witnessed an increase of 3.5% in repossessions by the banks and a double digit increase from the March statistics. Experts can argue whether the servicers and lenders are loosening the requirements, but the numbers  remain staggering and even more urgent when considered in light of the current depressing job opportunities and lay-offs.

Under the Home Affordable Unemployment Program  effective July, 2010, the Treasury Department has enacted an entirely new payment relief program for homeowners who have lost their jobs. Under this program, an eligible homeowner can request a forbearance plan to temporarily suspend their monthly mortgage payments for a minimum of 3 months. These borrowers must meet the HAMP eligibility criteria, have lost their job, receive unemployment benefits and request this forbearance plan before they miss 3 monthly mortgage payments. The publications emphasize the non eligibility factors apply to those in a permanent HAMP modification and it similarly does not apply to FNMA, FreddieMac or FHA serviced loans.

An outraged judge acts

The warm sounding initials of this new Federal effort may soon become another largely ineffective tool that will produce little impact on an ever increasing, struggling American family destined to face the hardships of mortgage default. Our New York State Laws offer considerable protection for these families and friends who have received a foreclosure summons and complaint. In the recently reported opinion by the Hon. Jeffrey Arlen Spinner in a case entitled Emigrant v Corcione,
the Court squarely denied summary judgment to the bank and rejected its request to appoint a Referee to sell the home and awarded $100,000 in damages to the homeowners. Problem solved?? Hardly! We will be unable to entertain the decisions which will be reached in the underwriting offices of our mortgage lenders after debating the outcome of such a decision.

Nevertheless, we are certain that as more and more homeowners become aware of the potential to keep their homes, even when faced with mortgage arrears, loss of jobs and other hardships, and as the protections afforded in our Courts become more widely accepted in the mandatory foreclosure settlement parts, we can make our mark and take aim at the rising tide of foreclosure sales and repossessions which are destroying our American dream. We can turn the negative into a positive despite the service of a foreclosure summons and complaint. We can witness the constantly changing environment which allows for good faith discussions to settle monthly mortgage arrears. On your calls to our office, we can emphasize that the broad possibilities of this complex problem are truly containable and we can work through this ordeal together.
 

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In  the course of many client conversations, new phrases and areas of pointed discussion focus on the grim topics at hand for family life. Many face great struggles and contemplate their survival after the early dawn and late evening arrivals of strange faces delivering thick booklets with colored construction papers. These publications appear to be offering a seemingly transparent hint at a glimpse of “Help for the Homeowner,” only to be found concealing their true object and intention: to take away your house.

Their circumstances are much like those of many others. The mortgage has not been paid this month, nor the last month. More than likely, the mortgage has not been paid in months and months. Hundreds of agonizing days, thousands of hours spent worrying about finances, mounting credit card bills, job security (or more precisely, insecurity) and otherwise few bright spots in our economic forecasts. The Federal Reserve Bank of New York published recent statistics papers  showing nearly 40% of the sub prime loans in our communities are in some form of default, with thousands more on the brink. Many more are yet to be included in these records as our property values receive mixed views of stability and equity during these challenged times.

The Treasury Department’s HAMP makinghomeaffordable.gov/  rescue plan has apparently failed, leaving millions of American families without a solution, and leaving us with the latest program, referred to as HAFA, the Home Affordable Foreclosure Alternative Program. Clutching at thick files of loan closing documents and more often, only scattered pieces that might have represented a mortgage application, clients and those in trouble call and visit in our offices asking “Where do we go from here? My spouse or partner doesn’t know about the summons; must we take our children out of their schools soon; how much time do we have left in our house and what can we do to keep our home our own?”

Many read last week that the semi-governmental agencies, Freddie Mac and Fannie Mae, reported some of the worst mortgage losses in their histories of operation. Delinquencies in the sub-prime and conventional loan markets reach into the trillions of dollars with little hope that this gushing well of adversity is readily capable of a lid to cap the substantial woes we face.

Our clients, in their phone calls and files, are the heart and soul of these statistics. These folks are in foreclosure actions and have taken action to keep their homes. The focus and notions of initiating legal defense to the receipt of a court summons are much more than fascinating ideas in scholastic circles. They are real live people, in all works of life who have no room for academic debate. Our clients are bus drivers, office workers, lawyers, doctors, wall street financiers, all of whom have decided to engage the courtrooms, judges and personnel in New York State Supreme Courts, and request enforcement of their rights to keep their homes their own.

To many, the process has worked, and they will eventually have witnessed and signed settlement and modification documents. We have challenged “sewer service” and asked our Judges to support these families in their quest to remain homeowners. Time after time, our judiciary has taken the lead and adamantly refused to allow foreclosure sales. Foreclosure Settlement Parts now preclude the auctions and mandate and require good faith attempts to utilize the HAMP and HAFA programs.

Servicers and investors cannot maintain a veil of secrecy as we look to uncover the true identities and discover who, what and where their alleged right to take away your homes are based. The loss of a home is not a certainty. Friends, family members and partnerships, all working together are able to engage the seemingly conflicted paths with their lenders and develop real changes in the foreclosure activity. Confidence in the defense of a foreclosure action is a family affair. A daily shift can be seen in the phone calls received in our office for once you make the decision to take action and save your home. Things can only get better. It’s a family affair.

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If you are in the foreclosure process, you will undoubtedly be asked to write a hardship letter by your lender. Banks want to understand your situation, and need to know if you are a suitable candidate for modification. The hardship letter is a way of going beyond the numbers, to evaluate your particular situation. This is an important step for anyone considering a loan modification, as well as for persons trying to sell their house to get out of a mortgage, or simply trying to give it back to the bank.

One thing a hardship letter is NOT is a place for a borrower to make excuses, point fingers of blame or vent anger over being in an unfortunate financial situation. Your lender doesn’t usually care what brought you into the situation. He wants to know what chances he has of getting all or at least some of his money back. If you appear to be a good candidate, your lender probably may be willing to offer some kind of loan modification.

Before you sit down to write your hardship letter, first think about who will be reading it. Your audience likely will be a member of the bank’s loss mitigation team, and it’s not a particularly inspiring job. He or she spends 8 to 12 hours a day working on unpleasant and tragic problems. Your reader will be working on hundreds of cases similar to yours at the same time, and will have read possibly thousands of hardship letters before seeing yours. Your audience will be incredibly risk-averse, and work in a highly pressurized atmosphere of saving every penny they can for the bank.

So what does the loss mitigation team want to know? Two things, actually. First, they want to know your circumstances. Why did you stop making payments? Was it a temporary problem such as being downsized from a well-paying job? Or are you permanently unable to work due to injury or other circumstances? Explain your current situation, explaining why you are unable to repay your loan.

The second point you need to make letter is to show the lender that loan modification is part of your overall solution. Is there a chance you may get rehired, or may get a similar position with a different employer? Are you planning on taking several part time jobs until you can regain full employment? Do you have any other sources of income which may relieve your situation in the near future such as an inheritance, the sale of property or other financial benefits? Showing them a workable plan makes you appear to be a good risk.

Keep your letter short. A single page is best. Avoid a rambling explanation of your circumstances and don’t allow yourself any “woe-is-me” tale telling.

After you’ve written your letter, read it over and see if it focuses on your two points. If you find anything that doesn’t talk about defining your situation and how you propose to resolve it, delete it and read it again. This is the beginning of a conversation you will have with your lender. Stick to the facts and focus on your goal, which is convincing your lender that you are a good candidate for loan modification.
 

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More than 3 million friends, neighbors and families currently share similar messages among their intimate groups of friends, neighbors and family members.  Their common thread is one of homeownership fears, mortgage arrears and home equity loss.  These are the phone calls, e mails and texts we see in a regularly increasing tide of new clients calling our law firm.

Foreclosure worries and an apparent and readily foreseeable fallout most certainly blizzards our radar screen.   For many of the past several years, those on the sidelines watched with great interest and listened as they sat somewhat tucked away from the chaos and crisis.   Never having doubted the American struggle to keep home your own, the monthly payments were not just an “old fashioned” commitment.  

Now, many of these bench warmers are fully engaged after suffering a job loss, hardship or unseen economic downturn.   Process servers and bankruptcy petitions are leading edge indicators when business in those sectors are booming.  This is not a moral crisis faced during a short slump in family earning power. Essentially, many families are forced to recognize that their entire mortgage debt and repayment abilities need an overhaul. 

While most of the analysts continue to debate the reasons for the paucity of progress in loan modifications, a Suffolk County Supreme Court decision scrutinizes the lending practices of the past and sets the barrier in favor of a homeowner who seeks to keep home their own.  Justice Jeffrey Arlen Spinner was assigned an action entitled Emigrant Mortgage v Corcione and on April 16, 2010 published his findings in the foreclosure action. 

The facts are probably not much different for many of you who have visited our office or for those who are in the throes of a foreclosure action.   Perhaps it was a mortgage loan taken within the past several years with hope that shortly after, another refinance would be undertaken to bail out of a loan which had a high interest rate or adjusted or had other terms most unfavorable for long term borrowing.   Shortly thereafter, unexpected hardship, reduced income and real estate downturns create new and unfamiliar landscapes of non payment and credit score failings.   Visits and phone calls produced little, if any realistic hope of a restructure of homeownership debt. The loan modification process fails after scores and scores of faxes, e mails and submissions to your servicer. 

The homeowners in this action sought legal counsel and found refuge in the New York State Supreme Court.   Justice Spinner’s decision unfolds the process, revealing that the bank delayed modification to collect pre-action late charges, tax and escrow advances, lender legal fees and other foreclosure related fees from the defendants.  In a far reaching decision, projecting previously unfound protection for the homeowner, the Court ruled that these homeowners no longer are to be judged by the moral dilemmas attached to a foreclosure action.   Mortgage foreclosure actions are now litigated matters and procedural or substantive federal and state laws will be engaged to protect the rights of the homeowner. 

Our citizens in New York State have been provided with mandatory settlement conferences in foreclosure actions, and these very same laws “mandate that the parties to such an action act and negotiate in good faith……….In short, the conduct of Plaintiff in this matter has been over-reaching, shocking, willful and unconscionable, is wholly devoid of even so much as a scintilla of good faith and cannot be countenanced by this Court.”  

Justice Spinner’s “moral compass” found bad faith conduct on the part of the lender and awarded damages in favor of the homeowners to “serve as an appropriate deterrent to any future outrageous, improper and wrongful activities.”   This decision permeates the air in every foreclosure settlement part that I have attended. Lawyers, hearing officers and court personnel openly debate the long term reliance upon such a decision as the appeal process may ultimately determine the final outcome in this action.   However, the spin and the stir of this decision may have adjusted the compass to point to a plan of recovery. 

 As a result, homeowners and clients who now visit with our law firm or others focused on the protections of the home against foreclosure are encouraged that the failings of the loan modification process do not represent the end of the road.   The compass points to new ingredients of judicial enforcement and social change emanating from the Courtroom of Justice Spinner.   The emphasis on failing and foreclosure is no longer an option for those who choose to seek to keep home your own.

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