At issue here are the requirements added to foreclosure proceedings by RPAPL 1303, which deal with the required statutory notice. The underlying purpose of this notice requirement was to afford greater protections to homeowners confronted with foreclosure.
This decision is noteworthy since it is an issue of first impression at the appellate level. In short, the Second Department held that the notice requirement of RPAPL 1303 is a mandatory condition precedent to the commencement of a foreclosure action. Failure to comply warrants a dismissal of a foreclosure action.
More importantly, a defense based on failure to comply with the RPAPL 1303 notice requirement is never waived and may be raised at any time, even on appeal.
By Renae Merle and Dina ElBoghdady
Washington Post Staff Writer
Friday, March 26, 2010
The Obama administration plans to overhaul how it is tackling the foreclosure crisis, in part by requiring lenders to temporarily slash or eliminate monthly mortgage payments for many borrowers who are unemployed, senior officials said Thursday.
Here, Plaintiff Lasalle Bank, N.A., (“Lasalle”) sought a judgment of foreclosure and sale on default against the defendant borrower. subordinate lender MERS as nominee of First Franklin Financial Corp. (“Franklin”) also sought relief pursuant to RPAPL 1351(3) and 1354(3). Defendant borrower purchased the subject premises financing 100% of the purchase with two mortgages. The first mortgage is held by Lasalle and constituting 80% of the purchase price. The second mortgage is held by Franklin constituting the other 20%.
Justice Schack denied without prejudice Plaintiff Lasalle’s motion for a judgment of foreclosure and sale on default because it failed to comply with CPLR 3215(f) which requires an affidavit of facts executed by an officer of Lasalle or by someone with a valid power of attorney from Lasalle. Schack also denied without prejudice the relief requested by Franklin for the same reason. Schack noted that although the Plaintiff supplied a power of attorney for this purpose, Plaintiff is required to submit either an original copy of the power of attorney or a copied certified pursuant to CPLR 2105—i.e. that Plaintiff’s counsel compared the copy with the original document and found it to be a true and complete copy.
Most interestingly, Schack chastised Plaintiff’s counsel, Steven J. Baum, P.C., for the simultaneous representation of Lasalle and Franklin since Franklin holds clearly holds a divergent interest from that of Lasalle. Franklin holds a second mortgage that is subordinate to that of Plaintiff’s. Schack pointed out that such a simultaneous representation is a violation of 22 NYCRR 1200.24 of the Disciplinary Rules of the Code of Professional Conduct. Simultaneous representation of this sort is permitted only if the lawyer can (i) competently represent the interest of each party and (ii) if each consents to the representation after full disclosure of the implications of simultaneous representation and the advantages and risks involved. Accordingly, Schack order Baum to demonstrate that Lasalle and Franklin gave such consented—no doubt Baum will be able to produce an after-the-fact consent. Whether he can demonstrate that he can competently represent both parties still remains to be see…
Homeowners in Washington State are suing Bank of America, alleging the nation’s largest lender is “intentionally” and “systematically” thwarting and ignoring borrowers’ requests to make reasonable mortgage modifications that would prevent homes from being foreclosed.
The case, filed in a Seattle federal court, claims that Bank of America is required to modify troubled mortgages as a condition of the $25 billion federal bailout it accepted as part of the Troubled Asset Relief Program (TARP).
Wells Fargo Bank Minn., Natl. Assn. v Perez, 2010 NY Slip Op 00956 (2d Dep't 2010)
Here, a foreclosing plaintiff was awarded summary judgment in an action to foreclose a mortgage, and the Second Department affirmed upon appeal. During this appeal, the defendant failed to raise the defenses of lack of standing or improper service. Thereafter, the plaintiff moved for a judgment of foreclosure and sale. When the defendant opposed the motion, she raised the previously mentioned defenses. The Second Department held that the defendant waived her defenses since she already had a full and fair opportunity to address the issues on the prior appeal. Moreover, she provided no basis for re-examining those issues.
"As a general rule, the law of the case doctrine precludes this Court from re-examining an issue which has been raised and decided against a party on a prior appeal where that party had a full and fair opportunity to address the issue." Frankson v Brown & Williamson Tobacco Corp., 67 A.D.3d 213, 217 (2d Dep't 2009); see Allison v Allison, 60 A.D.3d 711, 711 (2d Dep't 2009). The doctrine forecloses re-examination of an issue "absent a showing of subsequent evidence or change of law." J-Mar Serv. Ctr., Inc. v Mahoney, Connor & Hussey, 45 A.D.3d 809, 809 (2d Dep't 2007), quoting Matter of Yeampierre v Gutman, 57 AD2d 898, 899 (2d Dep't 1977). Wells Fargo Bank Minn., Natl. Assn. v Perez
Aurora Loan Servs., LLC v Thomas, 2010 NY Slip Op 01606 (2d Dep't 2010)
Here, the Second Department granted a foreclosure defendant's motion for leave to amend his answer to assert the defenses of lack of standing and lack of capacity to sue.
Motions for leave to amend pleadings should be freely granted, absent prejudice or surprise directly resulting from the delay in seeking leave, unless the proposed amendment is palpably insufficient or patently devoid of merit. See CPLR 3025(b); Lucido v Mancuso, 49 AD3d 220, 222 (2d Dep't 2008). Here, the defendant's proposed amendments were not palpably insufficient or patently devoid of merit. Since the documents upon which defendant relied in making his motion were obtained from the plaintiff in discovery, there was also no showing of prejudice or surprise resulting directly from defendant's delay in seeking leave.
Here, the Second Department reverses the Queens County, Supreme Court, judgment of foreclosure and sale. The Second Department remitted the case to the Supreme Court in order to conduct a traverse hearing to determine whether the defendant homeowner was properly served with process.
Generally, a process server's affidavit of service establishes a prima facie case as to the method of service and, therefore, gives rise to a presumption of proper service. However, a defendant's sworn denial that he was served by the plaintiff's process server and submission of proof of unexplained, serious irregularities in the service of the reputed tenants of the foreclosed property involving the same process server has rebutted this presumption of proper service. In light of defendant's denial of receipt of the summons and complaint served pursuant to CPLR 308(4) and the submission of an affidavit raising bona fide concerns involving the veracity of the process server, a hearing was ordered to determine, by a preponderance of the evidence, if the process server acted with due diligence before resorting to "nail and mail" service pursuant to CPLR 308(4). See Mortgage Access Corp. v Webb, 11 A.D.3d 592, 593 (2d Dep't 2004); Bankers Trust Co. of Cal. v Tsoukas, 303 A.D.2d 343, 344 (2d Dep't 2004).
By Nicholas M. Moccia Law Offices of Robert E. Brown, P.C. Staten Island Legal Services launched the Homeowner Defense Project in 2006 to address the pressing legal needs of homeowners affected by the mortgage lending crisis. It is the only organization in Staten Island providing free legal assistance to low and middle-income homeowners in foreclosure. Its goal is to keep families in their homes and prevent foreclosures from destabilizing Staten Island neighborhoods. In addition to providing legal advice and representation in state and federal court, Staten Island Legal Services offers assistance with newly required court settlement conferences, loan negotiations, and applying for refinancing or relocation assistance.
Margaret Becker is director of the Homeowner Defense Project at Staten Island Legal Services. Margaret started the Homeowner Defense Project in 2006, bringing to it 13 years of experience in public and private practice. She began practicing law as a staff attorney representing farmworkers with Michigan Migrant Legal Assistance Project. She practiced union-side labor and employment law and public utilities law (representing non-profit environmental groups) with a private firm in Wisconsin, represented homeless clients as a staff attorney with Legal Action of Wisconsin, and served as an editor for the Clearinghouse Review: Journal of Poverty Law and Policy. She received her B.A. from the University of Michigan in 1985 and her J.D. cum laude from Harvard Law School in 1992.
Staten Island Legal Services provides free online guidance for those served with a foreclosure summons and complaint. The guide explains how to “answer” a foreclosure complaint without an attorney using the sample answer form.
Fox News Interviews Al Lewis of Dow Jones about it…
You can’t expect a bank that is dumb enough to sue itself to know why it is suing itself.
Yet I could not resist asking Wells Fargo Bank NA why it filed a civil complaint against itself in a mortgage foreclosure case in Hillsborough County, Fla.
For homeowners struggling to keep up with their mortgage payments, their best hope may be negotiating a lower, more affordable monthly payment while they try to get their financial houses back in order. That's the aim of the government's Home Affordable Modification Program, which encourages lenders to modify loan payments.
Who loves a depressed real estate market? A certain shady brand of law firm, that's who.
As countless Americans suffered the sting of mortgage foreclosure, the obscure Amherst, N.Y., law firm of Steven J. Baum, P.C., made millions in fees from the some of the nation's largest banks. Known as one of a handful of regional "foreclosure mills," nicknamed for their voluminous, repetitive transactions, Baum processed 12,551 lawsuits in New York City and its suburbs in 2009 -- nearly 48 per day.
Only about a third of the homeowners who have successfully completed the trial period of the Obama administration's mortgage modification program have been offered permanent relief, according to new federal data obtained by the Huffington Post.
The conversion rate -- about 33 percent -- is woefully short of what the Treasury Department had forecast. Treasury thought the rate would be "ranging up to 75 percent," Herbert M. Allison Jr., assistant secretary for financial stability, told the Congressional Oversight Panel in October.
Apparently, developers feel they haven't been getting theirs. With new home development stalling, developers seem to think that the only way they can increase profitability is to build it into their work. Behold then, the latest financial scheme from the housing industry: a flip tax that gets paid to the developer every time the home gets sold.
The government's mortgage modification plan hasn't helped as many defaulting homeowners as was hoped, so the Obama administration will try a different tack to avoid.
Vesselin Mitev
New York Law Journal
March 08, 2010
A Manhattan law firm committed a "veritable 'perfect storm' of mistakes, errors, misdeeds and improper litigation practices" in trying to collect a debt from a Long Island, N.Y., woman, a New York state judge has ruled in ordering sanctions against the firm...[continue reading]
NPV stands for net present value, and it is an accounting calculation that every lender makes about each loan that is reviewed for a possible loan modification. The goal of the NPV is to help a lender calculate whether it is more profitable to do a loan modification or let the home fall into foreclosure...
A Federal Deposit Insurance Corp. (FDIC) plan to restrict securitizations is drawing intense opposition from bankers, who claim it would damage the secondary market...
Two weeks ago, a bankruptcy court in suburban New York did the formerly unthinkable: It waived a homeowner's mortgage debt after the bank trying to foreclose on the home couldn't submit any proof that it actually had a claim on the property....
Justice Philip Minardo, Chief Administrative Judge of the Richmond County Supreme Court, is reputed for his no-nonsense demeanor on the bench. Justice Minardo rejected the FDIC’s intrusive attempt to intervene in a state court foreclosure matter. Justice Minardo denied the FDIC’s motion to intervene on February 18, 2009, in JPMORGAN CHASE BANK vs. JAMES D. NELL, Index Number 131166/2009. Robert E. Brown, Esq., the attorney of defendant James Nell, adeptly revealed to Justice Minardo the hidden purpose underlying FDIC’s unusual request to intervene in a matter of otherwise local concern. Mr. Brown observes that “Justice Minardo has clearly demonstrated that he is aware of the concerns of Staten Islanders when it comes to foreclosures. There can be no doubt that the local courts are better positioned to resolve Staten Island foreclosures in a way that is sensitive to local concerns rather than some distant bureaucracy in Washington, D.C.”
Ultimately, the FDIC, by its own admission, seeks to interrupt local foreclosure actions and to remove them from the state courts for resolution in their own non-judicial administrative process in Washington D.C. By removing foreclosures from state court, foreclosure defendants stand to be deprived of the judicial remedies and protections that the state courts and legislatures have provided homeowners—including, apparently, the right to appeal. The FDIC writes on its own website the following about the administrative procedure it seeks to impose on foreclosure defendants:
The primary advantage is that the FDIC, in administering the assets and liabilities of a failed institution as its receiver, is not subject to court supervision, and its decisions are not reviewable except under very limited circumstances.
[…]
[FDIC] may seek to put any pending litigation to which the failed institution was a party on hold. Once a claim has been filed, the [FDIC] has 180 days to determine if the claim should be allowed.If the receiver is not satisfied that the claim has merit, the claim will be disallowed.
The foregoing text may be found in Chapter 7 of the FDIC’s “Resolution Handbook.” The full text is available on the FDIC’s website:
In addition to losing judicial remedies and protections, FDIC intervention effectively removes any leverage foreclosure defendants may have to settle with foreclosing lenders by way of a loan modification. The FDIC has given itself broad discretion in disposing of the claims foreclosure defendants may have against the abuses of failing and failed banks. This aggressive new policy serves as yet another example of the federal government’s increasingly high-handed disregard of the principles of federalism and separation of powers that have long protected localities from federal intrusion.
Justice Minardo has halted the FDIC from executing this aggressive new policy in Richmond County, and Staten Islanders should applaud him for preventing this unwarranted federal intrusion—an intrusion that would deprive Staten Islanders of the protections and sensitivities that only their own local courts can provide.
For more information about Justice Minardo click here: Minardo Bio
For more information about Robert E. Brown, Esq., click here: Brown Bio
