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MARS Attacks! Newest Loan Modification Legislation and What You Need to Know NOW!

Kathleen A. Scanlon — Thu, 20 Jan 2011 14:43:22 +0000

Throwing its hat into the arena in the crusade to protect distressed home owners, the FTC imposed new regulations on mortgage relief companies effective December 29, 2010, except for their advance fee ban which goes into effect January 31, 2011. Although many states, including New York, have imposed their own statutory regulations, the FTC sought to address consumer abuses in those States that had not enacted protective legislation. The FTC issued the Mortgage Assistance Relief Services (MARS) Rule (16 C.F.R. Part 322: Mortgage Assistance Relief Services; Final Rule and Statement of Basis and Purpose, FTC File No. R911003) to prevent bogus operations falsely claiming, for a fee, that they will negotiate with the consumer’s mortgage lender or servicer to obtain a loan modification, a short sale, or other relief from foreclosure. Several of these types of companies pretended to be affiliated with the government and government housing assistance programs.

In the November 2010 press release, FTC Chairman Jon Leibowitz said, “By banning providers of these services from collecting fees until the customer is satisfied with the results, this rule will protect consumers from being victimized by these scams.”

The MARS rule has a three-prong approach – it bans advance fees, requires certain disclosures and prohibits certain claims:

Advance Fees

Mortgage Relief companies may not collect any fee until they have provided the homeowner with:

a written offer from their lender or servicer that the consumer decides is acceptable; and
a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer.

Required Disclosures

In any advertising and in communications directed at individual consumers (such as telemarketing calls), the mortgage relief companies must make the following disclosures:

they are not associated with the government, and their services have not been approved by the government or the consumer’s lender;
the lender may not agree to change the consumer’s loan; and
if companies tell consumers to stop paying their mortgage, they must also tell them that they could lose their home and damage their credit rating.

Further, these companies must also disclose in their communications to consumers that

they can stop doing business with the company at any time,
can accept or reject any offer the company obtains from the lender or servicer, and
if they reject the offer, they don’t have to pay the company’s fee – said fee must also be disclosed

Prohibited Claims

The MARS Rule prohibits mortgage relief companies from making any false or misleading claims about their services, including claims about:

the likelihood of consumers getting the results they seek;
the company’s affiliation with government or private entities;
the consumer’s payment and other mortgage obligations;
the company’s refund and cancellation policies;
whether the company has performed the services it promised;
whether the company will provide legal representation to consumers;
the availability or cost of any alternative to for-profit mortgage assistance relief services;
the amount of money a consumer will save by using their services; or
the cost of the services.

In addition, the rule prohibits mortgage relief companies from telling homeowners to stop communicating with their lenders or their representatives. Further, these companies must also have reliable evidence to back up any claims they make about the benefits, performance, or effectiveness of the services they provide.

Lastly, it is a violation of the MARS Rule for any person to provide substantial assistance or support to a MARS Provider when that person knows or consciously avoids knowing that the MARS Provider is engaged in any act or practice that violates this Final Rule. (16 CFR Section 322.6).

Q&A:

What Exactly Are Mortgage Relief Services?

Mortgage Assistance Relief Services (MARS) are services offered or provided to a Consumer for consideration that are intended directly or indirectly to assist the Consumer with regard to:

Stopping or postponing a foreclosure sale;
Negotiating or arranging a Modification of a Dwelling Loan;
Obtaining a forbearance in the timing of payments due on a Dwelling Loan;
Negotiating or arranging any extension of the time period for curing a default or reinstating the Dwelling Loan;
Obtaining a waiver of an acceleration clause or balloon payment in a Dwelling Loan;
Negotiating or arranging a short sale, deed-in-lieu of foreclosure, title reconveyance, sale/leaseback or any other disposition of the Dwelling other than a sale to a third-party purchaser;
Offering or conducting a Forensic Loan Audit which is a legal analysis of mortgage loan documents for the purpose of finding compliance violations under federal and/or state law or regulation for the alleged purpose of helping Consumers acquire leverage over their Servicers;
Marketing of services to assist consumers in selling a Dwelling to a third party if the intent of the sale is to enable the Consumer to avoid foreclosure; and
Marketing of refinancing options by Mortgage Brokers if offered to avoid a foreclosure.

Does MARS Apply to Attorneys?

Attorneys are fully exempt if they:

Provide mortgage assistance relief as part of the practice of law;
Are licensed to practice law in the state in which the consumer for whom the attorney is providing mortgage assistance relief services resides or in which the consumer’s dwelling is located;
Comply with state laws and regulations that cover the same type of conduct the rule requires;
Deposit any funds received from the consumer prior to performing legal services in a client trust account and withdraw fees only as they are earned; and
Comply with all state laws and regulations, including licensing regulations, applicable to client trust accounts.

Does MARS Apply to Real Estate Agents?

It appears from examination of the language contained in the Supplementary Information in the Federal Register that the intent was to avoid including real estate brokers and agents handling sales of real property in the definition of MARS. However, it is certainly clear that real estate agents and brokers handling short sales, title re-conveyance or any other sale or endeavor undertaken in an effort to stop a foreclosure sale would be covered by the MARS definition.

The Supplementary Information states that the FTC does not consider the typical functions of real estate brokers, including showing homes, finding homes for Borrowers and listing homes for sale, to be MARS functions. Nonetheless, any endeavor undertaken by a real estate agent or broker in an effort to prevent a foreclosure other than these typical functions, such as negotiating with a Servicer the terms of a short sale,WILL be considered a MARS activity.

The MARS rule is something with which everyone involved in, either directly or indirectly, assisting consumers avoid foreclosure will need to understand and be in compliance with. It is broad and far reaching. The penalties for non-compliance with the FTC’s new MARS rule are $11,000 a day.

A New Year: Looking Back and Looking Forward at Fraudclosure

Kathleen A. Scanlon — Mon, 17 Jan 2011 15:48:33 +0000

2011 was ushered in with the usual fanfare in my family – lots of tasty appetizers, hanging out with the kids until the stroke of midnight and off to bed. I spent the end of 2010 trying to push a few small sales, despite overwhelming resistance by ignorant negotiators and researching a new gun to hold to the bank’s head – the faulty securitization of the mortgages and the resulting lack of standing of these various Plaintiff trustees to bring foreclosure actions.

It is not light reading by a long stretch. Understanding the securitization process from the originator to the Trustee, locating and understanding the governing document, the Pooling & Servicing Agreement (PSA), is no simple matter. But we have done just that and analyzed numerous defective Assignments of Mortgage for New York City properties. These banks and their respective attorneys flagrantly ignore the rule of law, routinely perjury themselves, do documents without authority, and directly violate the terms of the PSA. These banks have also been paid over and over for the same loan because of the over-collateralization of these mortgage securities, but seek to enrich themselves further by availing themselves of the remedy of foreclosure. And yet, the tax payer pays them yet again, via the Obama Administration, instead of taking that same money to make jobs to bolster our sagging economy.

These banks are posting record profits for 2010 as our country fails to recover for lack of not only jobs but of credit. The purpose of the TARP funds was to give an incentive to the banks to extend credit but they failed to do so and really decreased lending. Congress, in their haste, failed to include any strings in that gift package. The Wall Street Journal indicated that such failure was the reason for the decreased lending:

The fact that loan portfolios are shrinking at many of the largest TARP recipients underscores how few strings Treasury Department officials attached to the infusions. That has made it hard to prevent banks from using the money to pay dividends, make acquisitions and fund bonuses for top executives.

Pioneers saw what the banks were doing – getting rich from tax payers’ monies and then enriching themselves further through foreclosure of these overcollateralized securities or peoples’ homes. They fought the banks in court by going back to the basics and not just blinding accepting the banks’ right to foreclose on their “security”. It started with “produce the note” because the whole mortgage industry had gotten sloppy and couldn’t locate their documents. But then it went further, questioning whether the bank really owned the Note and if you could foreclose on a mortgage once it had morphed into a security. MERS‘ role was being investigated and foreclosure defense lawyers questioned whether or not it could bring a foreclosure action as plaintiff, because it did not really own the Note as well as failed to maintain a proper chain of assignment.

These very foreclosure defense attorneys and judges, inundated with millions of foreclosure actions, started to see an hideous pattern and the same names over and over again, executing assignments, affidavits of merit etc. Brooklyn’s own Judge Schack has been on the forefront of demanding legal compliance from the banks and making them account for their failure to adhere to the law as well as outright committing fraud. Our courts have been on the forefront of insuring that homeowners’ rights are not trampled – that the banks act in excellent faith and when they don’t – holding them liable for it. The banks and their attorneys step very carefully into our courts these days for dread of the ultimate punishment – dismissal of their action with prejudice.

I reckon 2011 is the year we take back our country from Wall Street and the banks. The tide is turning.

Suffolk County Crushes Deutsche Bank Over Fraudulent Foreclosure Docs

Kathleen A. Scanlon — Tue, 05 Oct 2010 01:06:28 +0000

The judges in Suffolk County (along with their Brooklyn counterparts) have been proactive in the fight against fraudulent foreclosure actions from the beginning. They have refused to rubber stamp the banks’ foreclosure filings and have consistently required them to adhere to the law. In Deutsche Bank, as Trustee v. McCoy, the judge denied the bank’s Motion for an Order of Reference based upon lack of standing to even bring the foreclosure action. Apparently, the bank attempted to retroactively file an Assignment to make standing. The Assignment was dated February 28, 2008 but declared an effective date of “January 19, 2008″. The court noted,

If an assignment is in writing, the execution date is generally controlling and a written assignment claiming an earlier effective date is deficient, unless it is accompanied by proof that the physical delivery of the note and mortgage was, in fact, previously effectuated (see, Bankers Trust Co. v Hoovis, 263 AD2d 937, 938, 694 NYS2d 245 [1999]). A retroactive assignment cannot be used to confer standing upon the assignee in a foreclosure action commenced prior to the execution of the assignment (Countrywide Home Loans, Inc. v Gress, 68 AD3d 709, 888 NYS2d 914 [2d Dept 2009]; Wells Fargo Bank, N.A. v Marchione, 69 AD3d 204, 887 NYS2d 615 [2d Dept 2009]).

The court also demanded the appearance of ”Sherry Hall,” who purports, in this particular case, to be the Vice President of Homecomings Financial Network, Inc., the attorney-in-fact for the plaintiff Deutsche Bank and ”Nikole Shelton,” the person who notarized Ms. Hall’s signature in this particular action, as well as in another action entitled GMAC Mortgage, LLC v Ingoglia, also pending in Suffolk County at the November 17, 2010 foreclosure settlement conference. Apparently, Ms. Hall is Vice President for Homecomings as well as GMAC – a state of facts that the court finds extremely suspect. Also problematic was that one of the affidavits was executed after it was notarized. I would hazard a guess that these two ladies are going to be in a bit of hot water when they appear before this judge.

This is, indeed, the tip of the iceberg. For too long, the banks have been filing thousands of foreclosure actions without a hitch…until now. The problem is, but, two-fold: the possible chill on lending if the banks cannot foreclosure on their security and second, those homeowners who faithfully pay their mortgages are going to be mighty upset at the thought of people getting a free house. These are two serious issues which I believe will guide policy at the appellate level. So although the trial courts may dismiss foreclosure actions and so forth, the appellate level might certainly see things in a far different light and have a far different ruling – if it reaches that point. I am sure that the banks and homeowners probably reach some sort of settlement, be it modification or otherwise, so these cases do not end up on appeal.

The Party is Over: GMAC Halts Foreclosures Amid Pervasive Foreclosure Fraud

Kathleen A. Scanlon — Fri, 24 Sep 2010 10:09:20 +0000

This past week GMAC issued directives to its servicers and agents to halt evictions tied to foreclosures on homeowners in 23 states including Florida, Connecticut and New York. Apparently, one officer of GMAC Mortgage’s servicing unit has admitted during testimony given in a deposition that, while he signs thousands of affidavits each month (to the tune of 6,000 to 8,000) as part of the necessary documents that must be filed with the foreclosure action, he lacks personal knowledge of certain critical facts in the affidavit which he asserts to be right. The affiant must be directly involved with the facts he is asserting and this error is certainly not limited to this officer, as evidenced by this defective affidavit and its subsequent withdrawal or, for that matter: GMAC.

Bloomberg reported that,

GMAC Mortgage may “need to take corrective action in connection with some foreclosures” in the affected states, according to a two-page memo dated Sept. 17 marked “urgent.”….Brokers were told to immediately stop evictions, cash- for-key transactions and lockouts, according to the document, addressed to GMAC preferred agents. GMAC is also suspending sales on properties which it has already foreclosed on and extending closing dates in those transactions already in contract. The following is a list of the affected states, which are judicial foreclosure states:

Connecticut
Florida
Hawaii
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Nebraska
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
South Carolina
South Dakota
Vermont
Wisconsin

Now of course, GMAC is attempting to downplay the seriousness of this matter and calling it a mere “technical” defect. But, foreclosure defense attorneys and agencies have advised that the questionable affidavits are only the “tip of the iceberg” and represent the beginning of the end for the foreclosure mills and for the banks and servicers who have been seeking to exercise foreclosure under fake pretenses. What foreclosure attorneys have been saying is finally coming to light: the nation’s foreclosure system is riddled with faked documents, forged signatures and lenders cutting corners when reviewing borrower’s files.

Not only are the Lenders, Servicers and Foreclosure Attorneys overwhemed but apparently the courts are too. The Washington Post reported yesterday that,

In theory, a judge should review the files one more time. But after the crisis produced massive numbers of delinquent homeowners, judges in many cases became overwhelmed. Some simply took at face value the documents handed over to them by the lenders – who in many cases were not checking the files, either, according to interviews with judges, attorneys and consumer groups.

This go by GMAC makes an opening for borrowers to contest some of the more than 2 million foreclosures that have taken place since the bubble burst. Every New York foreclosure defense attorney should be closely examining the foreclosure pleadings in current proceedings, as well as those that have already been foreclosed upon, for reliance upon faulty affidavits, which are tantamount to fraud and deposing all affiants. More than one case has been dismissed, with prejudice, because of fraud upon the court. Neil Garfield of Living Lies provides an brilliant analysis of a defective affidavit that was really submitted in support of an action to foreclose real property:

In general the affidavit is insufficient because it does not satisfy the basic requirements of personal knowledge.

1. “Affiant is an employee”: Affiant should be an officer or otherwise identified as having a specific scope of employment that should be identified and described for the period starting with the loan closing up through the date of the affidavit.

2. “Of Plaintiff or Plaintiff’s servicing agent”: Now they are withholding what entity employs the affiant so there is no presumption that the affiant in fact has personal knowledge of anything, or if affiant has personal knowledge of everything involved in the loan transaction and payments. Nor are they identifying or describing the function of either plaintiff or the servicing agent.

3. “Personally familiar”: Doesn’t mean personal knowledge. He probably got information from others (hearsay), and he does not identify himself as custodian of records for anyone on anything.

4. “The information is found in the servicing agent’s records”: So he might not employed by the servicing agent but he is swearing that the information is contained in their records. Hearsay, and lack of competence to testify because he is allowing that he might NOT have personal knowledge, which is the key component of a witness’ competency to testify — the four elements being oath or affirmation, personal knowledge, recall and the ability to communicate information that is relevant to the case from his personal knowledge and recollection. In addition there is no indication when the servicing agent started to service, who the servicing agent is, and whether they are still the servicing agent. And there is no indication of what information is tracked by the servicing agent — for example, does the servicing agent pay the holder in due course? who is the holder in due course? Since this loan was most likely securitized, what insurance, third party guarantees, reserves, cross collateralization and/or over collateralization payments have been made? Has the obligation been satisfied or assumed and assigned to a government sponsored entity, or in a bailout by the U.S. Treasury or Federal Reserve. Chances are the servicer can only say whether the maker of the note paid the servicer. The servicer cannot say and doesn’t know about third party payments on the note. He also cannot say whether payments were received by the payee or holder of the note by the borrower nor does he state the authority of the servicer to intermediate the payments.

5. “The entries are made”: How does he know that the entries are made and if so, by whom, under what authority and based upon what information. We already know he might be an employee of the Plaintiff and not the servicer. So he lacks competency to state anything about the business process or record keeping of the servicer.

6. “either people with first hand knowledge or…”: if they didn’t have first hand knowledge then somehow they got information from people who had first hand knowledge. Really? who? And how would he know about any of it?

7. “recording such entries is a regular practice of servicer or plaintiff”: Well, which is it? Which one is he saying has what information? He clearly is only saying that the records of only one company are involved, but he won’t say which one. What about the other one. Were payments made by borrower to one or the other or both? This second admission that there are two entities involved means at the very least that two affidavits are required — one from the servicer and one from the payee on the note. If the note has been assigned, then a third, fourth fifth etc affidavit needs to be executed by all those who have or ever had a claim to the revenue from the note.

8. “There is now due”: Lack of foundation for all the above reasons. Affidavit is subject to Motion to strike.

9. The numbers stated as charges to the account are unsubstantiated by copies of invoices or any other corroboration.

What does this mean for distressed homeowners? This will have to play out in the courts as only time will tell. You can be sure that all the servicers and lenders have already changed their procedures to rectify this glaring error although it couldn’t hurt to pursue this line of defense. Certainly the sheer volume of foreclosure filings is going to make it extremely hard for the Plaintiff to have affidavits executed by a capable party that will pass muster. Also, if a defective affidavit is grounds for dismissal, the question remains – with or without prejudice? That will depend upon the judges as they have broad powers of relief under the laws of equity which governs civil fraud. Judges have already dismissed foreclosure complaints, with prejudice, for fraud. We will have to wait and see what happens on the appellate level.

REO Fraud: A Study In How NOT to Flip an REO

Kathleen A. Scanlon — Tue, 16 Feb 2010 03:31:08 +0000

So I have been playing around with a new feature added to Property Shark: Deep Owner Search. You can type in a person’s name, a corporation name or an address and see what properties are associated with that information. From there, you can also search that person’s associates and so forth. Since I have practiced real estate law for the past 15 years, I have a lot of names at my disposal so I search to see what everyone has been up to.

One of my searches led me to a couple of REO property flips involving a corporation represented by the same attorney. All the properties are located in Brooklyn. One of the transactions, the spread was over $320,000! Nice profit, isn’t it? So how did they do it? Buyer took out a conventional mortgage of $635,000 and closed the beginning of November 2008. Most, if not all, conventional lenders have seasoning requirements. Did this corporation buy the property and hold for 90 days? Nope. Now I am sure you are wondering – well how does she know? I know, because all of these transactions are part of the public record and, if you know what to look for, it is honestly simple to discern the methodology. These particular parties are stupid. But, they also had to be aided by the title company. So what did they do?

Take a look at this snapshot of one of the transfer tax documents – the RP5217 – that I copied straight from the ACRIS system:

Now look at the crossed-out dates (this one is such a particularly poor job, but it closed). I propose that it did, in fact, close on September 10, 2008. Look at the CRN number on the bottom of the form (circled in red). The CRN number starts with the year, month and day the property is supposed to change hands and is inputted by the drafter. These transfer tax returns are usually prepared within days of closing. This vast time difference would never occur. The parties needed to back date the transaction because of the bank’s seasoning requirements. Also, they needed to back date it far enough that they could avoid any additional value requirements for transactions taking place within 180 days of acquisition.

Suffice it to say this is only one of this buyer’s reo transactions and they rest follow the same trend. It is all laid out there in the public record. This kind of trend would certainly supply law enforcement with enough probable cause to obtain a warrant to secure the documents from both the first and the second closings. Perhaps there will be a show check, fake income documents and other indicia of fraud – who knows?

Now question yourself, if I can find this blatant evidence of REO fraud, who else could be looking?

Don’t Believe the Hype: FHA’s Temporary Waiver of 90 Seasoning Rule

Kathleen A. Scanlon — Sun, 17 Jan 2010 17:05:18 +0000

On Friday, January 15, 2010, HUD Secretary Shaun Donovan issued a press release, as part of HUD’s Neighborhood Stabilization initiative, temporarily waiving FHA’s 90 Day Seasoning Rule. Amazingly, HUD is cognizant that the seasoning guideline is having a negative impact on alleviating the problem of abandoned and blighted homes:

“In today’s market, FHA research finds that acquiring, rehabilitating and the reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of sellers to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.”

The online real estate community was buzzing yesterday as news of this waiver spread quickly. The investor “gurus” are, of course, rejoicing and spreading the news far and wide, without a careful read of the Waiver itself. The intent of this temporary policy change is to allow investors to take title to a property, rehab it and sell it quickly. It is not a panacea for those investors who pick up a property at a discount, seeking to flip it for a profit in a “back to back” or “double” closing. For those types of transactions, the 90 day seasoning rule is a non-issue if you utilize a land trust correctly.

HUD’s Mortgagee Letter 2006-14 clarified the Rule and Regulations set forth in 24 CFR 203.37a concerning the eligibility of properties for FHA insurance and the rules governing sales of property. As I have discussed in a previous blog post, Legal Analysis of FHA’s Seasoning Requirements, the real estate and mortgage industry routinely misunderstands and applies these eligibility rules incorrectly and it appears that the trend is continuing with this new Waiver.

FAQS:

1. Does it have to be a property bought through a small sale, bank auction or an REO to be eligible under the Waiver?

No. There are no requirements in the Waiver concerning the status of the property itself. It is not necessary to demonstrate the distressed nature of the property.

2. So I can get a property under contract, do a contract with a potential FHA buyer and close with my FHA buyer the same day or the day after I buy the property?

No this transaction would not be eligible for FHA insurance. The waiver is really of the requirement that the real estate contract be executed on the 91st day after the investor takes title to the property. The requirement that the investor own the property is still in effect and therefore Contract Vendees and Assignments of contract are still prohibited. Further, an application for an FHA mortgage cannot be submitted to a Lender for consideration without a fully executed Contract. Therefore, Back to Back Closings will be impossible.

3. So I can close a week after I take title?

Virtually impossible for several reasons. I venture that there are nearly no Lenders in this post-bubble market that will take an application for an FHA mortgage and be in a position to close a week later. I am going to stretch that to probably 30 days. This is certain if your sale price to your FHA buyer is 20% or more higher than your acquisition price (do the math – its not that hard to hit that number – especially in certain areas of the country where housing prices are below $50,000). If the sale price exceeds the 20% threshhold, the investor will have to document the increase in value with supporting documentation and/or a second appraisal and the Lender will have to obtain a Property Inspection Report (see paragraph 2 of the Waiver). This report will not be ordered prior to application submittal and as discussed previously, that doesn’t take place until there is a fully executed Contract of Sale.

4. I found this fantastic property that my buddy picked up 2 months ago for $120,000.00. He rehabbed it and I am in contract to buy it from him for $220,000. I want to flip it to an FHA buyer for $250,000.00 can I do it?

You will have to wait until the 91st day after you close title to enter into a Contract of Sale with the FHA buyer. The Waiver will not apply if there is a history of prior flipping activity in the 12 month chain of title (see paragraph 1(c) of the Waiver).

5. In April, the Treasury’s Small Sale Program goes into effect and there should be a lot of distressed properties coming on to the market. The Waiver is going to be a huge help in moving those properties!

No, it isn’t. Apparently, government offices do not communicate with each other before issuing rulings – one of the requirements under the Treasury small sale program is that the Contract include a representation that the Purchaser will hold the property for 90 days post-closing. Perhaps the Treasury will revise its Directive and remove this offending language (which, as I had discussed previously, is extremely small-sighted).

Conclusion

Investors should rejoice as finally they are receiving the recognition they deserve: properties are moving because of their hard work and without the proper incentive, it wouldn’t happen. Instead of being the black sheep of the real estate community, investors are a major part of the solution. This Waiver is what investors need to get the properties rehabbed, sold and occupied to ameliorate the problem of abandoned and blighted homes. It is not a license to flip and should you wish to engage in that type of activity, you will not be able to use this Waiver to accomplish your goals.

Real Estate Law Update: New York State Decisions of Interest

Kathleen Scanlon — Wed, 12 Aug 2009 01:14:58 +0000

JOHNSON v. MELNIKOFF, 2008-08857 [2d Dept 8-4-2009] 2008-08857

Chose on August 4, 2009.

In an action, inter alia, pursuant to RPAPL article 15 to
determine title to real property, the defendant Bank of New York Trust Company,
N.A., appeals, as limited by its notice of appeal and brief, from so much of an
order of the Supreme Court, Kings County (Demarest, J.), dated September 11,
2008, as granted that branch of the plaintiff's motion which was for summary
judgment declaring that its mortgage on the subject property is null and void,
and denied that branch of its cross motion which was for …

CHOICE & ORDER In December 1998, the plaintiff bought the subject property. She
financed her buy with a mortgage loan. In April 2004, the plaintiff had
certain discussions with representatives of a company allegedly offering
services for refinancing mortgage loans. Two months later, the plaintiff,
believing that she was signing documents that would effectuate a refinancing of
her mortgage loan, unwittingly executed a deed conveying title to the subject
property to …

MAIORINO v. GALINDO, 2008-06047 [2d Dept 8-4-2009] 2008-06047

Chose on August 4, 2009.

In an action, inter alia, to impose a constructive trust
on certain real property, the defendants Steve Galindo, Michael Madia, James
Napolitano, Demo Works, Inc., Kitchen Designs by Dependable, Inc., and
"ABC Corp.," as successor in interest to Kitchen Designs by
Dependable, Inc., appeal, as limited by their notice of appeal and brief, from
so much of an order of the Supreme Court, Nassau County (Warshawsky, J.), dated
May 22, 2008, as denied those branches of the defendants' motion which were to
…

CHOICE & ORDER The plaintiff, Edward Maiorino, who was a 50%
shareholder in the defendant Demo Works, Inc. (hereinafter Demo), alleged,
inter alia, that the defendant Steve Galindo, who was also a 50% shareholder in
Demo, improperly diverted assets of Demo to improve real property in Bethpage
(hereinafter the Bethpage property). The defendant Michael Madia had bought
the Bethpage property in his own name and financed the buy by obtaining
mortgages for the full purchase …

BYRON v. HAAS, 2008-01977 [2d Dept 7-28-2009] 2008-01977

Chose on July 28, 2009.

In an action to recover hurts for fraud and breach of
contract, the plaintiff appeals, as limited by her brief, from so much of an
undated order of the Supreme Court, Kings County (Schmidt, J.), as granted that
branch of the cross motion of the defendant John Spanakos pursuant to CPLR 3211(a)(7)
which was to dismiss the complaint insofar as asserted against him and, in
effect, upon searching the record, dismissed the complaint in its entirety
insofar as asserted against the defendants Michelle Haas, …

The plaintiff
commenced the instant action to recover her commission asserting fraud and
breach of contract theories of liability, and the defendant John Spanakos
counterclaimed against her to recover hurts for libel per se and malicious
prosecution. The plaintiff went, pursuant to CPLR 3211(a)(7) and CPLR 3016(a),
to dismiss the counterclaims, and Spanakos cross-went, pursuant to CPLR
3211(a)(7), to dismiss the complaint insofar as asserted against him. The
Supreme Court …

LEIST v. TUGENDHAFT, 2009-03562 [2d Dept 7-21-2009] 2009-03562

Chose on July 21, 2009.

CHOICE & ORDER The plaintiff commenced this action,
inter alia, for specific performance of a purported contract for the sale of
real property and filed a notice of pendency against the defendants' beachfront
property located in Westhampton, New York. The purported contract consisted of
a "Memo of Sale," subscribed by no one, sent as an attachment to an
e-mail from the defendants'"listing agent" to the plaintiff's
attorney. The plaintiff wrote on the memo of sale that he unconditionally
accepted … General Obligations Law ' 5-703(2) states that a contract for the
sale of real property "is void unless the contract or some note or
memorandum thereof, expressing the consideration, is in writing, subscribed by
the party to be charged, or by his lawful agent thereunto authorized by
writing." Assuming, arguendo, that an e-mail is sufficient to comply with
the statute of frauds with respect to contracts for the conveyance of real
property (see General Obligations Law ' 5-703[ 2]; …

Foreclosure Defense Bar: Heads Up! Forensic Exam of TBW Mortgage Corp Loan Docs Could Be Fruitful

Kathleen Scanlon — Mon, 29 Jun 2009 00:50:20 +0000

Those engaged in foreclosure defense should take a closer look at loans originated by TBW when structuring their defense strategy…
Florida Company Reaches Multi-state Agreement Over Non-traditional Loans

Carrie Bay | 06.25.09
Taylor Bean & Whitaker Mortgage Corp. (TBW), a wholesale lender based in Ocala, Florida, has agreed to pay 13 states and the District of Columbia $9 million in fines after regulators took a closer look at the company’s nontraditional mortgage loans made in 2006.The examination alleged TBW, currently one of the 10 largest wholesale mortgage lenders in the United States, altered borrowers’ income and asset information in order to qualify applicants for mortgage loans they couldn’t afford and place them into so-called exotic loans, such as interest-only mortgages, payment option adjustable-rate mortgages, and stated income loans.

DSNews.Com Default Servicing In Print and Online – Formerly REO Magazine

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Tags: TBW, subprime, mortgage, forensic, foreclosure, default, realestate, loan, loanmodification, shortsale

DON’T SAY I DIDN’T WARN YOU! NY Attorney General’s Crackdown on the Loan Modification Industry

Kathleen Scanlon — Wed, 10 Jun 2009 14:31:46 +0000

This investigation comes as no surprise – I have been speaking with clients and those who wanted to jump on the loan mod bandwagon about the New York Foreclosure and Lender Responsibility Act of 2008 and its effect on them, but often to deaf ears. Most people weren’t even aware of the Act or just shrugged their shoulders and continued with business as usual.

NEW YORK, NY (June 9, 2009) – Attorney General Andrew M. Cuomo today announced his office is taking legal action against a leading New York foreclosure rescue company for charging illegal up-front fees and engaging in consumer fraud. The company targets homeowners facing foreclosure by claiming that it can save their homes, but often fails to provide the services promised.
The Attorney General’s Office served a notice of intent to sue on American Modification Agency, Inc. (“Amerimod”) and its owner and President Salvatore Pane, Jr. Amerimod is headquartered in Uniondale, NY and claims to operate in all 50 states, servicing thousands of consumers nationwide.Today’s notice is part of Cuomo’s investigation into the so-called “foreclosure rescue” industry. Cuomo’s Office also has also served subpoenas on fourteen other companies in New York and across the country that offer loan modification services.
Capitalizing on the current economic downturn and housing crisis, these companies scour foreclosure notices and filings and prey on consumers desperate to save their homes from being foreclosed. The companies promise that they will negotiate with the consumers’ banks to lower mortgage interest rates, lock in fixed rates, get late fees and past due payments forgiven, and even reduce principal balances. The Attorney General’s investigation is in response to complaints from homeowners across New York that these companies fail to deliver as promised, charge illegal, up-front fees and use misleading advertising to lure consumers into services that oftentimes leave them further in debt, facing a worsened threat of foreclosure.
“This economic climate has bred an environment in which scam artists and opportunists are able to prey on vulnerable consumers on the brink of losing their most valuable possession – their home,” said Attorney General Cuomo. “Companies that charge homeowners up front fees for loan modification services, place homeowners into contracts that don’t tell cancellation rights, or lure consumers with misleading claims violate not only our trust but the law. Today’s notice and the subpoenas issued nationwide are part of my Office’s multi-tiered effort to stamp out this kind of abuse and protect homeowners across the country.
”The Attorney General’s investigation into Amerimod found that the company charged homeowners heavy, up-front fees in advance of providing any services, a violation of New York law. In addition, the company uses misleading advertising full of unsubstantiated claims that it has success rates of 90 to 100 percent and that it is fully licensed. Amerimod also fails to provide contracts that include required notice of right to cancel, and fails to provide Spanish-speaking consumers with Spanish contracts, also in violation of New York law.

CUOMO ANNOUNCES INTENT TO SUE ‘AMERIMOD’ LOAN MODIFICATION COMPANY IN INVESTIGATION OF FORECLOSURE RESCUE SCAMS TARGETING HOMEOWNERS NATIONWIDE

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Tags: loanmodification, mortgage, scam, Cuomo