Articles Posted in Foreclosure

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Illegal bank actions stemming from New York foreclosures are going to net the state a payout of $25 million. The money is the result of a $25 billion nationwide payout agreed upon by five major banks and attorneys general from 49 states, following widespread mortgage abuses and fraud that resulted in tens of thousands of illegal foreclosures across the country.Our Great Neck foreclosure attorneys know this payout won’t make up for the many families who have been affected by these deceptive practices.

News reports indicate that Bank of America, JPMorgan, Chase, Wells Fargo and Ally Financial will all pay $5.9 million each to the state. Citigroup will pay $1.25 million.

Essentially, the problem lies with the system the banks used to track mortgages. It’s called the Mortgage Registration System – or MERS. It was created in the 1990s. The problem is that banks never kept up with paper documentation and ownership questions abound when it comes time to take foreclosure action. They used the MERS system to input data rather than obtaining court orders and going through the local clerk of courts.

While $25 million may sound significant, it really only amounts to about $2,000 for each person who was illegally foreclosed upon. That is barely enough to cover moving costs and a security deposit. It’s also going to be spread out over a three-year period. In exchange for the settlement, the state has agreed to drop some of its legal claims against the named banks.

But many of those individuals who still have lawsuits pending against these financial institutions intend to continue to press forward with them.

This settlement also did not require any of the banks to admit wrongdoing. What that means for the future is that there is no guarantee these type of actions won’t continue to occur.

In fact, there are some 70 million mortgage loans – including subprime loans – that are being tracked in the MERS system that have yet to be entered into the clerk of courts system. Plus, right now, there are an estimated 11 million people who still owe more on their homes than they are worth.

This was after housing prices plummeted by more than 30 percent since 2006, when large loans were often given to people who could never have afforded to repay them in the first place.

For homeowners, that means you need an aggressive attorney who is willing to fight for your best interests and who is familiar with these type of cases and the tactics regularly employed by banks to protect their bottom dollar.

President Barack Obama has announced the implementation of a high-level group of officials who will be charged with organizing and investigating the ongoing complaints regarding abusive and reckless home loans, and New York State Attorney General Eric Schneiderman has been chosen to help lead the group. But as bureaucracies go, it could take years to sort through each complaint.

If you are facing a foreclosure in Great Neck, you need someone who will work to get you effective and timely results.
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New York City foreclosures are again on the rise, as banks reported seizing more homes the first month of year than in December.The news comes after the foreclosure rate dropped significantly in 2011, when financial institutions were forced to stop and sort out claims of foreclosure abuse – something with which our New York foreclosure attorneys are all too familiar.

In one month, foreclosures across the country jumped by 8 percent, though that is still down 15 percent from 2010. That’s according to RealtyTrac listing firm.

When the month of January came to a close, RealtyTrac reported there had been more than 210,000 homes in the country that were either issued a notice of default, repossessed or were slated for the auction block. That breaks down to roughly one every 625 homes in the country.

Other states that reported a very high increase include Massachusetts (75 percent) and new Hampshire (62 percent).

It’s a pattern that is expected to continue following the $25 billion settlement that was signed off on by 49 state attorneys general (including New York Attorney General Eric Schniederman). The settlement was largely intended as a punitive measure following widespread misdeeds within the industry, as well as to aid some American homeowners who were either underwater on their mortgage or who had lost their homes to banks that never proved they were legally entitled to take them.

In the wake of a lot of these revelations, many banks put a hold on the filing of new foreclosures while they worked to retrace their steps (some would say cover their tracks) on previous filings. They also had to put measures in place to ensure the same errors wouldn’t be recurring.

Under the settlement terms, the banks agreed to streamline the way they move through the foreclosure process. Part of the idea is to increase transparency.

Now, banks are once again beginning to turn their attention back to new foreclosure filings, so the numbers are again beginning to jump. RealtyTrac’s vice president, Darn Blomquist, told USA Today Money that lenders are going to be playing catch up on the foreclosures that have accumulated over the past year, though it may happen somewhat slowly, as lenders will want to make sure they are in compliance with the new federal regulations.

In New York state, the month of January saw one of out every 4,849 homes handed a notice of foreclosure. There are currently more than 30,000 homes in the midst of a New York foreclosure. Of those, the average foreclosure sales price is around $323,000.

Some additional New York foreclosure statistics, according to RealtyTrac:

The following counties had the highest foreclosure activity in the state for the month of January:

  • Kings, 292 filings
  • Nassau, 229 filings
  • Suffolk, 194 filings
  • Monroe, 124 filings
  • Bronx, 99 filings

Some mortgage bank economists say the real measure of whether the economy is returning to health is the employment rate. The higher employment is, the fewer people are going to miss their mortgage payments and ultimately, the less foreclosures there will be.

Unfortunately, however, it may be some time before we see that scenario become reality.
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The state’s attorney general has announced that he will sue several of the country’s largest banks, claiming that they lied to court officials and homeowners in filing New York foreclosure documents that were either fraudulent or flawed when using an electronic mortgage database registry.The lawsuit, filed in the state’s supreme court in Brooklyn, names J.P. Morgan Chase, Wells Fargo and Bank of America. Also named is the Mortgage Electronic Registration System, known as MERS, and the parent company, MERSCORP.

Our New York City foreclosure defense attorneys know that the economic meltdown was spurred by some banks that carried on irresponsible practices, leaving millions of Americans underwater on their homes and deeply in debt.

Unfortunately, despite certain government regulations meant to address those issues, banks have continue to conduct shady business. This step by Eric Schneiderman, the state’s attorney general, will hopefully bring us one step closer to national economic stability.

MERS is essentially a database that is used to track millions of loans across the country. Almost all banks use MERS to transfer mortgages and keep track of them. But when the housing market crashed, some banks were reportedly using the electronic system to speed up the foreclosure process and essentially bypass the courts.

According to The Washington Post, officials both locally and across the state say that MERS is a company created to circumvent state and national property laws. Schneiderman’s lawsuit alleges that when the mortgages went south, the banks flooded MERS with foreclosures that they were not legally cleared through the courts. This has meant that some people had their homes pulled out from under them by an institution that had no right to do so.

In moving forward, the attorney general also alleges that the electronic database is filled with misrepresentations, inaccuracies and countless documents that have been “robosigned,” or in other words rubber stamped on a virtual assembly line of foreclosures that weren’t appropriately analyzed on a case-by-case basis. This made it tough for anyone – including the courts – to figure out who, if anyone, actually had the right to foreclose on a property.

The lawsuit is after damages for homeowners who were caught in the middle. It also seeks to force the database and the banks to go back and fix some of the ongoing documentation issues.

Banks that were named in the suit didn’t want to issue a comment on the matter, though MERS operators did respond that they stand by their practices, which they contend are in compliance with both federal and local laws.

All of this proceeded a recent $25 billion deal signed off on by 49 states’ attorneys general – including Schneiderman – to have the banks pay restitution for their contribution to the housing crisis. That deal, while heralded by a number of government officials, would only break down to about $2,000 a piece for those people whose homes were illegally seized due to improper bank practices. Some critics, however, have asserted that amount isn’t likely to cover moving expenses, let alone offer much recompense for pain and suffering.
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