Conflicting reports in the media may have some homeowners at a loss as to what is really happening in these troubling financial times.  Reports of a steep decline in foreclosure filings had many hopeful that the housing crisis may be heading towards recovery, but experts warn that the underlying conditions in the housing market have not yet improved.

With a 15% decline in February for New York foreclosures, and 27% nationwide, the country experienced a 3-year low compared to 2010.  In February, default notices, auctions and seizures all fell, according to a report by RealtyTrac.

Some experts are attributing the decline in February to the backlog of filings due to the ‘robosigning’ controversy in the industry.  Investigations into the foreclosure process resulted in a big drop in activity as banks and servicers work through the mess they got themselves into due to poor procedures.  Lenders are now working to re-file paperwork that was initially improperly done.

Dr. Barbara van Kerkhove, Research and Policy Analyst at the Empire Justice Center recently published an exhaustive report on New York’s foreclosure crisis. The report indicates that the state is nowhere near the end of the foreclosure crisis, which now includes those homeowners with good credit and prime loans.

A recent article in The Daily Record quoted Van Kerkhove as saying the number of loans 90-plus days past due exceeds the number of pending foreclosures in every county of New York state, meaning a flood of new filings is forthcoming.

According to an article in the Business Review, Nearly 69,000 home loans in New York are at imminent risk of foreclosure, a situation that an advocacy group said today could lead to a “tsunami” of foreclosures over the next year or two.

Rueters recently reported on the decline as well, quoting Rick Sharga, senior vice president at RealtyTrac; “The drop-off was too severe to be organic.  There’s nothing in the underlying conditions that are causing foreclosures to suggest they should be going down yet.”

And so it seems we aren’t out of the woods just yet, despite the recent decline in filings.

I will continue to follow and report on the current housing crisis, foreclosure trends and legislation.  If you or somebody you know is at risk of foreclosure, I can help—please contact me.

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Many seniors have considered a reverse mortgage to help support them in their golden years, but are not aware of the pitfalls associated with this type of loan.  You may even be surprised to learn that the rules have changed, leaving some elderly homeowners at risk of losing their homes.

Reverse mortgages are supposed to protect seniors from economic hardship, paying older homeowners a regular sum against their property’s equity.  Now, due to a 2008 rule change by the Department of Housing and Urban Development, surviving spouses can be excluded, leaving them at risk of being displaced due to foreclosure upon the death of their spouse.  AARP, the seniors’ organization, recently filed suit against HUD, asserting that recent policy changes are pushing older unsuspecting homeowners into foreclosure.

Reverse mortgages were intended to be non-recourse loans.  This means that the most a borrower can lose is the house itself, even if the value of the property goes down.   In this market, nearly 25% of all homes with mortgages are worth less than they owe, making them nearly impossible to sell.

Lenders sometimes encourage only the elder member of a couple to put his or her name on the mortgage because then the payout is greater.  What they fail to disclose to the couple is that when the older spouse passes, the loan becomes due and payable in full.

In one such case, reported in the New York Times, the Robert and Ophelia Bennett secured a reverse mortgage.  The new mortgage, intended to secure this couple’s future, instead helped destroy it.  They paid $20,000 in fees but received only $1,800 in cash.

Mr. Bennett said he did not realize that his new mortgage had taken his name off the title of the home, which the couple had owned together since 1981.

Mrs. Bennett, who was a decade senior to her husband, died shortly after the new mortgage went into effect. The payments immediately stopped and the mortgage became due and payable.

The lender began foreclosure proceedings and scheduled a sale of the property last month.

If HUD had not changed the rules, the suit says, Mr. Bennett would have been allowed to live in the house until his death.

I can’t stress enough how important it is to work with a team you can trust to avoid such tragedies to your family.   If you have ever considered a reverse mortgage or have questions about any real estate topics, please feel free to contact me.

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Purchasing Real Estate is a major life event, right up there with marriage and career.  It is one of the most important investments you will make and can carry with it much excitement and anticipation—as well as significant stress.  I cannot express how important it is to make sure you have a real estate team that you can trust to make sure your investment is a sound one.

A recent lawsuit has many asking the question, how do you determine the square footage of a property?  Is it calculated by the livable area?  Does it include closets or even the insides of the walls?  Incredibly, in New York, where every inch of space is precious, there is no hard and fast rule; and lawyer Rishi Bhandari recently discovered that some developers and sellers will even ‘estimate’ square footage to their advantage, in some cases over stating the square footage by several hundred square feet.  Many buyers take the information that a developer or real estate broker advertises at face value.

The New York Times recently reported on an ongoing lawsuit over a Brooklyn condo, noting that the state attorney general’s office, which oversees the sale of new condominiums, does not tell developers how to tabulate space, but requires them to disclose to buyers how they do it and to abide by their stated guideline. (In co-op conversions, square footage is not required to be reported.)

Homebuyer Mr. Bhandari, said he was also pursuing a principle: if he walked away, developers would continue to sell properties with inflated floor plans.

The standard of measurement can get confusing for buyer: exactly how is square footage defined?  Is the square footage advertised based on gross square footage or net square footage?  Appraisers and architects generally measure from inside wall to inside wall including the closets.  Gross living area as defined by Fannie Mae and the Appraisal Institute’s Dictionary of Real Estate: “Gross Living Area (GLA) – The total area of finished, above-grade residential space excluding unheated areas such as porches and balconies; the standard measure for determining the amount of space in residential properties.” In a perfect world, this information would be accurately disclosed to potential buyers and overstating square footage would be an illegal practice; unfortunately, we do not live in a perfect world.

The good news is that this is just one of the many details that your real estate team can assist you with to make a well informed decision when purchasing real estate. You may want your real estate team to include: a real estate agent, title company, inspection team, insurance agent, and of course—a knowledgeable real estate attorney.

I know exactly how important it is to have a team you trust; not only because of my years of experience with real estate law, but also because of my own experience with buying and selling property as a real estate investor myself.  If you have any questions, or need help in putting together the best real estate team for your needs, do not hesitate to contact me.

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Criminal defendants are guaranteed legal counsel be provided for them if they cannot afford to hire their own attorney.  Unfortunately, this does not apply to civil matters such as foreclosures… but this may soon change for homeowners in New York.  New York’s Chief  Judge, Jonathan Lippman, would like all homeowners facing foreclosure in New York to have legal representation.

In 2008, at the start of the housing crisis, New York State experienced a sharp increase in foreclosures.  A pilot project was developed to bring homeowners and lenders together to participate in settlement conferences.  The 2010 report of the Chief Administrator of the Courts estimates that (prior to this pilot program) as many as 90% of homeowners lost their homes to foreclosure by default, meaning that they never participated in any of the proceedings or appeared before a judge.

After it was discovered that several major banks had used improper and in some cases forged documents to speed foreclosures, Judge Lippman ordered attorneys representing banks and lenders to personally guarantee all paperwork filed before proceedings.

The latest effort to staunch the flood of foreclosures comes in the form of Judge Lippman’s latest initiative to ensure homeowners get their fair day in court.  The new program was detailed in a recent article in the New York Times, quoting Judge Lippman as saying:

“It’s such an uneven playing field.  Banks wind up with the property and the homeowner winds up over the cliff, on the street. It doesn’t serve anyone’s interest, including the banks.”

A lawyer for every defendant will also serve the courts’ interests, the judge said, by making proceedings more efficient.

Judge Lippman announced this new initiative in his annual State of the Judiciary address in Albany, saying he hoped that lawyers would reach out to defendants before they appear in court.

The program will be deployed in two counties, Queens and Orange counties, in the next few weeks, and statewide by the end of the year.

Some expect that the recent actions in New York will change the way foreclosures are handled across the nation.  Judge Lippman’s efforts are being closely monitored by other states, and more importantly, homeowners are beginning to question their rights and make efforts to save their homes rather than walking away without a fight.

Proper legal representation can make the difference between losing your home to foreclosure or not.  If you have any questions please contact me, I am here to help.

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With the ongoing recession and housing crisis, many homeowners are facing foreclosure.  The financial and emotional stress of facing the possible loss of one’s home can be overwhelming, as can the seemingly never-ending stream of mail, collections calls and general paperwork from banks, collection agencies and foreclosure processors.  Most people assume that lenders and their attorneys have come to foreclosure with all their legal t’s crossed and that they have no further recourse. But recent news has some questioning the legality of foreclosures over the past few years.

Legal scandals in 2010 put tens of thousands of judiciary foreclosures on hold in the 23 states where the process is handled by the courts, including New York. The first cases were tried in the Massachusetts highest courts, finding that Wells Fargo and US Bancorp did not prove they had the legal right to evict borrowers from their homes.  In both cases, ownership was restored to the borrowers.  This opened the door to other foreclosure do-overs in the state as well as investigations into foreclosure practices across the nation.

The impact of the ruling is not limited to Massachusetts; according to a recent article in Bloomberg, “Claims of wrongdoing by banks and loan servicers triggered a 50-state investigation last year into whether hundreds of thousands of foreclosures were properly documented as the housing market collapsed.” What this means is that New York mortgage owners must be on the lookout, and New York homeowners should be aware of their options.

Lenders and Wall Street firms have bundled thousands of mortgages into securities, and banks often failed to record each link in the chain of ownership.  Foreclosure improprieties have been found to include many dubious practices to patch up holes in loan documentation, including forged signatures on legal documents.

New York’s judicial system is taking a close look at approximately 80,000 pending foreclosures currently in process to ensure that all paperwork is accurate.  Attorneys representing lenders in such cases are being held accountable as well.

Lawyers have been accused of poorly processed or even fabricated paperwork in the foreclosure actions they represent.  In some states, including New York, lawyers in foreclosure cases must now vouch for the accuracy of the documents they present.

In a recent article in the New York Times, Professor Gillard, an expert in legal ethics at New York University, had this to say: “When the consequence of a lawyer plying his trade is the loss of someone’s home, and it turns out there are documents being given to the courts that have no basis in reality, the profession gets a very big black eye,”

In 27 states (such as California, Nevada and Arizona which have 3 of the top 4 foreclosure rates) foreclosures are processed without court intervention.  A Notice of Default is the first letter that a mortgage lender or servicer sends to a homeowner who has fallen behind on payments.  Several lawsuits have been filed claiming that the Notice of Default process was flawed, thus making even more foreclosures invalid.

In this era of financial crisis, questionable home foreclosure practices and legal loopholes, it is more important than ever to consult an attorney you can trust to make sure all your legal recourses have truly been explored and that your rights are protected.

Please call my office for more information about your legal rights as a homeowner, or if you are currently in foreclosure and need legal advice.  I am here to help.

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