Contract waiting for a notary public sign on desk.

Foreclosure Defense in Brookhaven, NY

In the current legal environment, it is extremely important to have a skilled foreclosure lawyer review all of the paperwork that is provided by a bank, mortgage servicer, or attorney. This is especially important when a Summons and Complaint is given for a foreclosure action. Due to complex financial vehicles (MBS, CDO and derivatives) that led to the subprime mortgage crisis, legal defenses for foreclosures have been rapidly developing. If the Complaint is not answered by a defense within 20 days of personal service or within 30 days of service by mail, these defenses may be waived. Grausso & Foy will provide a free consultation for foreclosure defense in Brookhaven, New York, to review all mortgage paperwork. As part of our foreclosure legal services, we also perform a mortgage search at the Suffolk County Clerk’s offices to help clients determine if foreclosure defenses are present.

Foreclosure Settlement Conference

New York State passed a law in 2008 that requires a Foreclosure Settlement Conference for all parties in foreclosure. In order to qualify for the conference, the house in foreclosure must be your primary residence. Our extensive experience with attending foreclosure settlement conferences enables us to provide our clients with loss mitigation options while attending conferences for modifications, short sales, and deed-in-lieu of foreclosure. Contrary to common belief, there are numerous defenses for a foreclosure lawsuit. While some attorneys attempt to “buy extra time," we are here to win your case. During your free consultation, you’ll be informed of the defenses available to you. Defenses that occur as a result of a defect in your bank's handling of your mortgage or through an error with the Bank's Law Firm give you the protection you need.

RPAPL 1304 – 90-Day Notice

In order for your bank to foreclosure, they are required to send you a very specific notice 90 days before they start the foreclosure lawsuit. This prerequisite actually extends to numerous defenses, so the violation of any of them is fatal to the bank's case. "Strict compliance" with the rules regarding this notice is required. In other words, a single mistake in the notice itself or the manner in which hit is delivered can lead to the winning of your case.

RPAPL 1304(2)

This notice must not only have very specific language, but it must also include an attachment behind it informing you of at least five local United States Department of Housing and Urban Development (HUD) Approved Housing Counseling Agencies.

RPAPL 1304(2)

This notice must not only be sent 90 days prior to starting a foreclosure lawsuit, but it must be sent to you twice: once with a certified mail return receipt requested and a second time through first class mail. Although this may seem insignificant, it is actually grounds to win your case.

Foreclosure Legal Services

After signing your mortgage papers when you purchased your home or when you refinanced for a better rate, you should have signed two specific documents. One is called a mortgage and the other is called a note. The note is actually the contract (think of it as a personal check) and the mortgage is simply an agreement between you and the bank that says they may take your home to collect on the note’s debt if you default on paying monthly. If your bank cannot prove that they have your mortgage, then there is no effect and they can still foreclose! However, if your bank cannot prove that they own your note, then you can defeat your bank's suit.

Fraudulent Assignment - Robosigning

Once the 'Great Recession' began in the summer of 2007, a tidal wave of foreclosures rushed into New York State Courts. When this happened, the banks were required to submit certain signed and even notarized documents to the court simply as a matter of course. When the major banks realized that they did not have the necessary documents in many of their cases, they simply hired low-wage employees and independent contractors to fraudulently fill out these documents as if they were signed years ago. These assignments are not simply fraudulent, they are ineffective, and thus grounds for winning your case.

Invalid Assignment

Part of the "Where's the Note Defense" is a thorough investigation into any and all transfers of your mortgage. Any transfer of your mortgage must include a proper assignment. What constitutes as a proper assignment depends upon the circumstances of that assignment. Some assignments may need a power of attorney in order to be effective, while others may need multiple assignments to be considered valid. Although this is a tricky issue, it also determines whether or not the company that is trying to foreclose on your home is entitled to do so.

RPAPL 1303 - Colored Notice

If you have been served with legal papers, those legal papers must include a notice on COLORED paper. The title of the notice must be 20-point type and in bold, and the body of the notice must be 14-point type and bold. Every word in that notice is controlled by RPAPL 1303, and the entire notice must be on one page only. Failure to fully comply with any and all provisions of this law will give you grounds to win your case.

Failure to Join Necessary Parties

If your current bank is different from the bank that actually gave you your loan, then you may have a case if there are certain discrepancies in the paperwork of those transfers. Your bank must bring in all necessary parties to foreclosure on your home. This defense is commonly included in any circumstance where there are potential errors in your chain of title. Failure to join necessary parties may grant you grounds to win your case.

Affidavit Under Penalty of Perjury

During and after August 2010, numerous and widespread insufficiencies in foreclosure filings in various courts around the nation were reported by major mortgage lenders and other authorities. These insufficiencies include: failure of plaintiffs and their counsels to review documents and files to establish standing and other foreclosure requisites, filing of notarized affidavits which falsely attest to such review and to other critical facts in the foreclosure process, and “robosignature” of documents by parties and counsel. The wrongful filing and prosecution of foreclosure proceedings which are discovered to suffer from these defects may be cause for disciplinary and other sanctions upon participating counsel. As a result, attorneys and/or individual Plaintiffs must attest under penalties of perjury that they have reviewed the documents of the foreclosure action, as well as other critical facts in the foreclosure process, and that these facts and documents have been reviewed and are accurate. If your legal papers do not include either an affidavit from an employee of the bank OR the bank's attorney that specifically attest to the truthfulness of the documents on record under penalties of perjury, then you have grounds to win your case.

Is a Trust Involved? - No Assignment During 90-Day Period

Some foreclosure lawsuits involve trusts as the plaintiff bank. What this essentially means is that your mortgage has been converted into a stock. These types of mortgages are called "securitized mortgages.” All securitized mortgages are legally and strictly regulated by the Federal Tax Code and by the Securities and Exchange Commission (SEC). Each security must file its own specific Pooling and Servicing Agreement (PSA) with the SEC. Translation: there must be a contract written up that governs the trust. Let's jump to the important part. Each of these contracts has a provision saying that once the trust is created, all mortgages must be assigned into the trust within 90 days. If there is no assignment during the 90-day PSA period commenced from the start date of the trust, then your bank has no standing to foreclose and you may have grounds to win your case.

Mortgage Electronic Registration Services: "MERS"

If MERS is involved in your foreclosure case, then you may very well have sufficient grounds to win your case. MERS is a complicated subject, not only because MERS itself is complicated, but also because the law's treatment of MERS is slowly moving (against it). If you understand nothing else in the following explanation, just remember that, if MERS is involved in your foreclosure case in any way, you may have grounds to win your case. MERS is involved in approximately 60 million mortgage loans and is involved in 60% of all loans that are given out today. So what is MERS and why was it created? MERS was created so that Banks could dodge a tax, specifically a tax involving the assignment (or transfer) of a mortgage. The banks wanted to (and ultimately did) treat your mortgage like a stock on the Stock Exchange, transferring it many times to many different companies. The fear was that if companies had to pay this tax in order to buy the stock, it would make the stock less valuable. The bank’s solution to this fear was to simply not pay the tax. Their solution was to place MERS (on paper) as the owner of your mortgage and then simply require MERS to keep track of when your mortgage exchanged hands. The problem is that, under actual law, only the person who physically and legally ‘holds’ the mortgage papers you signed is the owner of your debt. Since the banks never actually mailed these documents to MERS, it never actually owned your mortgage, and thus it never had the power/ability to assign your mortgage to other companies. Once a bank listed MERS as the owner of your mortgage, they then converted your mortgage into a stock and traded it on the stock exchange. It was the responsibility of MERS to keep track of who actually owned your mortgage. In June of 2011, a court that governs every trial court on Long Island effectively ruled that MERS does not have the right or ability to assign mortgages in accordance with their current business model. Translation: a bank can assign a mortgage to MERS, but it cannot simply list it on paper as the owner and then leave it up to MERS to keep track of who owns the mortgage. Instead, it must follow the same rules that apply to any other company that receives or assigns mortgages. The court's ruling started by saying, "This matter involves […] whether such rules should be bent to accommodate a system that has taken on a life of its own," and concluded, "This Court is mindful of the impact that this decision may have on the mortgage industry […] nonetheless, the law must not yield to expediency and the convenience of lending institutions." Bank of New York v. Stephen Silverberg.

Contact us to speak with the staff of our foreclosure defense law firm. We represent clients in Brookhaven and Long Island, New York, and the surrounding areas.