News: Homeowners that Defend Foreclosure Can Recover Attorney’s Fees

On October 25, 2010, in Foreclosure, Message/News Board, by Robbie L. Vaughn, Esq.

Access to justice in lending act

Governor Paterson has signed the “access to justice in lending act.” This law makes the right to recover attorneys fees by the lender, contained in mortgage agreements, a reciprocal right. The new law, Real Property Law §282, takes effect 60 days after its signing.  It applies to “residential real property mortgages in existence on or after such date and shall apply to actions and proceedings commenced on or after such date.”

The Bill:

Section 1. This act shall be known and may be cited as the “access to justice in lending act”.

S 2. The real property law is amended by adding a new section 282 to read as follows:

S 282. MORTGAGOR’S RIGHT TO RECOVER ATTORNEYS’ FEES IN ACTIONS OR PROCEEDINGS ARISING OUT OF FORECLOSURES OF RESIDENTIAL PROPERTY. 1. WHENEVER A COVENANT CONTAINED IN A MORTGAGE ON RESIDENTIAL REAL PROPERTY SHALL PROVIDE THAT IN ANY ACTION OR PROCEEDING TO FORECLOSE THE MORTGAGE THAT THE MORTGAGEE MAY RECOVER ATTORNEYS’ FEES AND/OR EXPENSES INCURRED AS THE RESULT OF THE FAILURE OF THE MORTGAGOR TO PERFORM ANY COVENANT OR AGREEMENT CONTAINED IN SUCH MORTGAGE, OR THAT AMOUNTS PAID BY THE MORT GAGEE THEREFOR SHALL BE PAID BY THE MORTGAGOR AS ADDITIONAL PAYMENT, THERE SHALL BE IMPLIED IN SUCH MORTGAGE A COVENANT BY THE MORTGAGEE TO PAY TO THE MORTGAGOR THE REASONABLE ATTORNEYS’ FEES AND/OR EXPENSES INCURRED BY THE MORTGAGOR AS THE RESULT OF THE FAILURE OF THE MORTGAGEE EXPLANATION–Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01064-10-0
S. 2614–B 2 TO PERFORM ANY COVENANT OR AGREEMENT ON ITS PART TO BE PERFORMED UNDER THE MORTGAGE OR IN THE SUCCESSFUL DEFENSE OF ANY ACTION OR PROCEEDING COMMENCED BY THE MORTGAGEE AGAINST THE MORTGAGOR ARISING OUT OF THE CONTRACT, AND AN AGREEMENT THAT SUCH FEES AND EXPENSES MAY BE RECOVERED AS PROVIDED BY LAW IN AN ACTION COMMENCED AGAINST THE MORTGAGEE OR BY WAY OF COUNTERCLAIM IN ANY ACTION OR PROCEEDING COMMENCED BY THE MORTGA GEE AGAINST THE MORTGAGOR. ANY WAIVER OF THIS SECTION SHALL BE VOID AS AGAINST PUBLIC POLICY. 2. FOR THE PURPOSES OF THIS SECTION, “RESIDENTIAL REAL PROPERTY” MEANS REAL PROPERTY IMPROVED BY A ONE- TO FOUR-FAMILY RESIDENCE, A CONDOMINIUM THAT IS OCCUPIED BY THE MORTGAGOR OR A COOPERATIVE UNIT THAT IS OCCUPIED BY THE MORTGAGOR.

S 3. This act shall take effect on the sixtieth day after it shall have become a law, shall apply to residential real property mortgages in existence on or after such date and shall apply to actions and proceedings commenced on or after such date.

As always, The Foreclosure Defense Law Firm of VAUGHN & WEBER, PLLC is here to assist you. We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a consultation with a foreclosure defense lawyer.

Please visit our Foreclosure category to learn more about foreclosure issues.

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News: NY Banking Dept. Requests Suspension of Foreclosure Actions

On October 13, 2010, in Foreclosure, Message/News Board, by Robbie L. Vaughn, Esq.

The following is from the NY Banking Department’s website:

October 8, 2010

To the Institution Addressed:

Recent events surrounding the foreclosure process of several mortgage loan servicers and the use of individuals identified as “robosigners” to execute affidavits without proper verification have raised considerable concerns for the Banking Department.

As you may be aware, on September 20, 2010, Ally Financial halted foreclosures in several states after discovering that faulty affidavits were filed in foreclosure cases.  Specifically, Ally indicated that certain individuals executed affidavits without personal knowledge of the allegations contained therein.  Subsequently, JP Morgan Chase and Bank of America made similar announcements concerning documents filed in foreclosure actions.

Given the extent and severity of the issues raised, the Department is requesting that [Institution Addressed] conduct an internal review of its foreclosure practices in New York and provide a response by October 22, 2010 to the following:

  • The steps you are taking or have taken to review your foreclosure process in New York;
  • The results of your review, including a description of the process for verifying affidavits submitted in support of foreclosure actions in New York and which, if any, of your employees or agents have executed foreclosure documents without direct personal knowledge of the facts or with other irregularities;
  • The corrective action, if any, you have taken or intend to take in response to the results of your internal review;
  • The measures taken to ensure that affidavits filed in New York foreclosure actions are executed in compliance with New York law; and
  • The status of pending foreclosure actions (including foreclosure sales and evictions) in New York and the measures taken to suspend such actions pending your review and corrective action.

In the interim, we are requesting that [Institution Addressed] suspend foreclosure actions in New York until such time as it has conducted a thorough analysis of its foreclosure practices and determined that such practices are in compliance with New York law.

Please visit our Foreclosure category to learn more about foreclosure issues.

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News: BOA Halting Foreclosure Sales In All 50 States

On October 8, 2010, in Foreclosure, Message/News Board, by Robbie L. Vaughn, Esq.

The Wall Street Journal reports that Bank of America (BOA) is placing a moratorium on all “foreclosure sales” across the U.S. (see below). However, BOA hasn’t halted all foreclosure proceedings (see our earlier post Major Banks Halting Foreclosures in NY?). Additionally, it appears that a BOA spokesperson is implying that BOA’s completed foreclosures were proper.

Bank of America Corp. said it is placing a moratorium on all foreclosure sales across the U.S., amid political pressure on U.S. banks to examine foreclosure-documentation problems.

The nation’s largest bank by assets is the first financial institution to stop all foreclosure sales amid revelations that the banking industry had used “robo signers,” people who sign hundreds of documents a day without reviewing their contents, when foreclosing on homes. Bank of America, J.P. Morgan Chase & Co. and Ally Financial Inc. (parent of GMAC Mortgage) last week postponed foreclosures in 23 states where a court’s approval is required to foreclosure on a home.

Bank of America also decided Friday to review the affidavits being used in foreclosure proceedings in the rest of the 50 states so the accuracy of the documents can be assessed.

Thus far “our ongoing assessment shows the basis for our past foreclosure decisions is accurate,” a Bank of America spokesman said.

The decision by Bank of America to extend its postponement to all 50 states takes effect Saturday. The bank doesn’t intend to lift the moratorium on foreclosure sales until its assessment is complete, a spokesman said. The bank hasn’t halted all foreclosure proceedings, however. If a borrower is delinquent, the bank is still issuing notices of default and pursuing efforts to modify certain mortgages, the spokesman said.

On Thursday, Rep. Edolphus Towns (D., N.Y.), chairman of the House oversight committee, became the latest lawmaker to call for a nationwide moratorium on foreclosures.

Please visit our Foreclosure category to learn more about foreclosure issues.

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Major Banks Halting Foreclosures in NY?

On October 2, 2010, in Foreclosure, by Robbie L. Vaughn, Esq.

Are foreclosures being halted in NY?

Foreclosure defense is a large part of our law practice. We are currently defending foreclosures brought by GMAC, Chase, Bank of America, Wells Fargo etc.  For the most part, we have not seen much evidence of these lenders suspending current foreclosure actions. They are still opposing our motions, replying to our answers, and having counsel attend the Mandatory Foreclosure Settlement Conferences on their behalf.

However, we have had several recent loan modification offers, requests for adjournments, and at least one major lender is attempting to discontinue their foreclosure action against one our clients. We were able to achieve the foregoing results by raising and vigorously litigating the “faulty/fraudulent paperwork” that is a part of many foreclosure actions.

So, we know what the headlines say, but we have YET to receive any calls from any lenders or their attorneys saying “Hey, we are discontinuing all of our foreclosures in NY.” We look forward to that day, but until then, we will keep raising the issues and fighting for our clients.

As always, The Foreclosure Defense Law Firm of VAUGHN & WEBER, PLLC is here to assist you.  We are conveniently located in the heart of Nassau County, Long Island, at 217 Willis Avenue in Mineola, NY 11501. Contact us at (516) 858-2620 to arrange a consultation with a foreclosure defense lawyer.

Please visit our Foreclosure category to learn more about foreclosure issues.

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