Thursday, January 31, 2013

Soon You Can Flee Your Underwater Home. But It Will Cost You

For some homeowners, March 1 will be Liberation Day. That’s when Fannie Mae and Freddie Mac will start allowing some homeowners who have been stuck in their homes—unable to move because they owe more than the property is worth—to relinquish the houses and cancel their debt.
The new rules (PDF) for deed-in-lieu transactions apply to people who are current or less than 90 days late on their mortgage payments. To the extent that the change makes it easier for people to move—to take a new job, shift locations following the death of a spouse or caregiver, or if they become ill and can no longer afford the house payment—it should help the economic recovery. The change also will benefit military personnel who are relocated.
To be eligible to turn over the house keys, homeowners must be making payments of at least 55 percent of their monthly income for the house and must be able to document a “hardship” that requires a move, such as a spouse’s death. The home must be clean and not damaged. Homeowners may also have to surrender as much as 20 percent of personal assets, excluding retirement accounts, to partially meet the loan’s unpaid balance, depending on the borrower’s financial situation. The program does not affect second mortgages. Mortgage servicers can offer up to $6,000 for second-lien holders to release borrowers from the loans, but there’s no requirement that the holders agree. This could limit participation.


Tuesday, January 22, 2013

Mortgage Forgiveness Debt Relief Act Survives Plummet from Fiscal Cliff

The Mortgage Forgiveness Debt Relief Act of 2007, which allows homeowners that are forgiven a portion of their mortgage debt to exclude the amount forgiven from their taxable income, was extended through December 31, 2013.

The Mortgage Forgiveness Debt Relief Act allows taxpayers to exclude this forgiven debt from their income when the debt pertains to their primary residence. This provides greater incentive for distressed homeowners to participate in loss mitigation and foreclosure avoidance options, as their participation is less costly since no increased taxable income exposure exists.


Friday, January 18, 2013

DECISION: Wells Fargo Bank, N.A. v Sposato // Possible robosigning of the Mortgage Assignment ... ..


WELLS FARGO BANK, N.A., as Trustee for Option One
Mortgage Loan Trust 2007–02, Asset-Backed Certificates,
Series 200702



Upon the foregoing papers, the motion of defendant, Joyce Sposato is granted to the extent
herein provided.

This is an action to foreclose a mortgage dated November 8, 2006, upon the property located at 99 Excelsior Avenue, Staten Island, New York. The mortgage was originated by Option One Mortgage Corporation (“Option One”) and was recorded in the Office of the Clerk of Richmond County on December 15, 2006 (see Defendant’s Exhibit 1). Plaintiff filed the Summons, Complaint,and Notice of Pendency on April 8, 2008 (see Defendant’ Exhibit 2). However, it was not until the following day, April 9, 2008, that Option One executed the “Assignment of Mortgage” with note on the property to plaintiff Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust2007-2, Asset-Backed Certificates, Series 2007-2 (“Wells Fargo”), which was recorded in the Office of the Clerk of Richmond County on April 18, 2008 (see Defendant’s Exhibit 4). Upon defendant’s default in appearing or answering, this Court granted a default Judgment of Foreclosure and Sale on
October 14, 2008 (see Defendant’s Exhibit 12). The foreclosure sale, initially scheduled to be held on December 4, 2008, was cancelled upon defendant’s first order to show cause, dated December 1, 2008 (see Plaintiff’s Exhibit I), but was ultimately conducted on November 29, 2011, with the property being sold to plaintiff for the sum of $443,634.00 (see Defendant’s Exhibit 13). Defendant Joyce Sposato (hereinafter defendant) now moves by order to show cause to, interalia, vacate the October 14, 2008 Judgment of Foreclosure and set aside the enduing sale on
numerous grounds, including plaintiff’s alleged lack of standing (see CPLR 5015[a][2], [3], [4]).

In support of her position that plaintiff lacked standing, defendant sets forth three arguments:  
(1) the Mortgage Assignment to Trust upon which plaintiff relies to show ownership of the note was executed after the commencement of the action; 

(2) The Mortgage Assignment to Trust is invalid since it was executed by a “robosigner”, Topako Love, who lacked capacity to act on behalf of the originating lender, Option One, and 

(3) plaintiff has failed to demonstrate that it duly acquired the mortgage and note in accordance with the terms of the “Pooling and Servicing Agreement for Option One Mortgage Loan Trust 2007-2, Asset-Backed Certificates, Series 2007-2.” According to defendant, said agreement prohibited plaintiff from accepting the note as a trust asset because, interalia, pursuant to its terms, any transfer to the Trust must come from a depositor, rather than originator.

In opposition to the application, plaintiff relies largely upon the representations made by Option One’s “Assistant Secretary”, Cindi Ellis, whose April 17, 2008 Affidavit of Merit and Amounts Due submitted in support of the Order of Reference states: “The plaintiff became the owner of the note and mortgage as a result of a purchase thereof for valuable consideration prior to the commencement of this action.” It further states: “the assignment of Mortgage memorializing plaintiff’s interest has not yet been recorded1; however, plaintiff has standing to prosecute the foreclosure action in its capacity as beneficial owner and holder of the note and mortgage” (see Defendant’s Exhibit 8, para 2). According to plaintiff, these representations settle the question of ownership of the note at the time of commencement of the action, and accordingly, the validity of plaintiff’s standing to foreclose. Plaintiff likewise relies on defendant’s concession (see Defendant’s Affirmation in Support, para 10), that her particular loan was included among the mortgages that were pooled into the trust filed with the SEC on March 1, 2007, and is listed in the Free Writing Prospectus relating thereto. However, plaintiff fails to counter defendant’s claim that the Mortgage Assignment to Trust was executed by a robo-signer employed by Lender Processing Services, Inc. of Dakota, MN, rather than by Option One. Nor does plaintiff provide details as to when, where, how and for what consideration it obtained transfer of the “beneficial owner[ship]…of the note” prior to the written assignment.

This Court is mindful that, while the use of its equitable power to set aside its own judicial sale should be exercised “sparingly and with great caution” (Guardian Loan Co. v. Early, 47 NY2d515, 520), even in the absence of any demonstration of fraud, collusion, mistake or misconduct which casts suspicion on the fairness of the sale itself (id., 520-521; Federal Natl. Mtge. Assn. v. New York Fin. & Mtge. Co., 222 AD2d 647), it is not powerless to act in order to prevent its own judgments and decrees from being made into “instrument[s] of injustice” (Guardian Loan Co. v. Early, 47 NY2d at 520; see Matter of Ziede v. Mei Ling Chow, 94 AD3d 771). Moreover, while this exercise of restraint is typically informed by the interests of persons other than the judgment creditor and debtor, who should normally be entitled to rely upon the regularity of the foreclosure sale, those interests will not be affected by a vacatur in this case, since plaintiff, the alleged wrongdoer, purchased the property itself. Under these circumstances, the element of “irreparable harm” which traditionally has barred relief based on allegations of presale acts of misconduct, e.g., fraud or misrepresentation, simply is not implicated (see Manufacturers & Traders Trust Co. v. Fay, 79 AD3d 825, 826).

It is well settled that in order to establish a prima facie case in an action to foreclose a mortgage, a plaintiff must establish its ownership or possession of the note, the relevant mortgage, and defendant’s default in payment at the time the action is commenced (see Mortgage Elec Registration Sys, Inc. v. Coakley, 41 AD3d 674; Household Fin. Realty Corp. of NY v. Winn, 19 AD3d 545, 546). Thus, the assignee of a note and mortgage has no right or standing to foreclose upon same unless the assignment (which may be affected by physical delivery) is complete as of the time of commencement (see LaSalle Bank Nat. Assn. v. Ahearn, 59 AD3d 911, 912; Bankers Trust Co. v. Hoovis, 236 AD2d 937, 938). In this context, standing has long been defined as “an interest in the claim at issue in the lawsuit that the law will recognize as a sufficient predicate for determining the issue at the litigant’s request” (Carprer v. Nussbaum, 36 AD3d 176, 182). Accordingly, “if standing is denied, the pathway to the courthouse is blocked” (Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 801, 812).

As set forth above, however, defendant’s challenge to the judgment pursuant to CPLR 5015(a)(2) and (3) may well have merit, since the moving papers contain some evidence of fraud and/or misrepresentation, while newly validated evidence of possible robosigning of the Mortgage Assignment to Trust by Topako Love on behalf of Option One, whose signature was notarized in a state where the latter has no offices, and whose capacity to sign on behalf of Option One has been drawn into question, could provide defendant with a viable ground to seek vacatur of the judgment. Curiously, plaintiff has failed to offer any evidence in support of the efficacy of Love’s signature. 

In light of the foregoing, it appears that the judgment of foreclosure and ensuing sale should be vacated in the interest of justice pursuant to CPLR 5015(a)(2) and (3); that defendant’s default be vacated; and that she be granted leave to serve and file a late answer within 20 days of the date of service upon her of a copy of this order with notice of entry.

This constitutes the decision and order of the Court.

E N T E R, DATED: January 7, 2013
Joseph J. Maltese Justice of the Supreme Court

Monday, January 14, 2013

A DISH CALLED WANDA: Bikini babe calls doc a XXX pervert in lawsuit

A sexually obsessed orthopedist went from X-rays to X-rated with an alluring patient, texting her a photo of his penis to cap years of creepy come-ons, a shocking new lawsuit charges. Dr. Mark Sherman targeted 9/11 widow Wanda Arena after lifting her phone number from a patient file when she came to him for surgery on a torn ACL in 2009, according to the complaint. The toned fitness competitor, who flaunts her physique in string bikini contests, freaked out when Sherman sent the perverted picture in the wee hours of Oct. 5.

  Read more:

Surgeon sexted women using phone numbers from medical files: lawsuit

Wednesday, January 9, 2013

JPMorgan Is Sued by National Credit Union Administration

The National Credit Union Administration said in a complaint filed yesterday in federal court in Kansas, that the offering documents for residential mortgage-backed securities underwritten or sold by Washington Mutual to the credit unions contained false and misleading information about the underlying home loans. 

 “The damage caused by the actions of firms like Washington Mutual has been extremely expensive to contain and repair, and that job isn’t finished, yet,” NCUA Board Chairman Debbie Matz said in a statement.


Tuesday, January 8, 2013

Bank of America Extends Retreat From Mortgages

Bank of America is continuing a large-scale retreat from its costly expansion into the home mortgage market, a shift that concentrates more power in the hands of its biggest rivals and leaves fewer options for some home buyers.

The bank, which already has sharply scaled back in making mortgages, on Monday sold off about 20 percent of its loan servicing business as part of its agreement to pay the housing finance giant Fannie Mae more than $11 billion to settle a bitter dispute over bad mortgages.


Thursday, January 3, 2013

Chase - Mortgage Settlement

Our client received this letter (below) from Chase - because of the recent mortgage settlement, her loan was forgiven.

If you have any questions regarding your mortgage, predatory lending or how we can help you to fight back against foreclosure please feel free to contact us.

Law Offices of Robert E. Brown, P.C.
2409 Richmond Rd., Staten Island, New York 10306
Phone: 718-979-9779
  Letter from Chase