Learning Center » New York Foreclosure Homes

The Law Steps In To Prevent Foreclosure

Julie Parker — Tue, 16 Sep 2008 15:44:01 +0000

The law had to step in to prevent Sheila Cruz from losing her American dream – her own house. It took her three years to prevent her dream house on Staten Island from becoming a nightmare. But she won against imminent foreclosure.

Her story started in 2004 when she was ready to spend $30,000 of here hard earned money as down payment for a house. But her broker friend told her to opt for a townhouse worth $400,000 without making any initial payment. At first she was reticent thinking of her modest earnings but finally she agreed when her friend told her that the monthly payment would amount to $2,000 per month. An assurance was also given that the figure would soon come down. She inked the agreement and set up her home in the house.

Six months later Sheila began to get worried. After going through the fine print of the document she discovered that there was a clause saying that the interest would shoot up after five years. It showed that so far she had been paying only the interest and not any part of the capital. Suddenly she realized that her houseboat was leaking. It was tough for her to meet the current rate of payment but if it increased further she would default and run into foreclosure without fail.

Like hundreds of many others in this foreclosure age, Sheila had become a victim of predatory lending. The majority succumbs to foreclosure and gets evicted from their hearth and home. But some like Sheila are plucky and lucky enough to force a turn around.

Legalists opine that there are many ways of keeping the foreclosure wolf at bay. A legal aid society or non-profit house-counseling group can be contacted to find out who is the owner of the mortgage. HUD has a list on its website of these counseling groups. In most cases the banks have sold the mortgages and this makes it difficult to trace the current owners of the agreement. Banks may be contacted but usually that step does not come to much use. The banks might make things even worse than before. If the bank is hostile then it is best to hire a lawyer. The legal expert will be able to pin the flaws in the mortgage agreement and put the lender in an awkward position for predatory lending. The law has the power to close in on the offending lender and halt foreclosure proceedings.

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Foreclosures Jump Again Despite Taxpayers Bailing Out Fannie And Freddie

Julie Parker — Mon, 15 Sep 2008 12:48:51 +0000

Despite the government take over of Fannie Mae and Freddie Mac, once more foreclosures have jumped nationwide especially in Queens. The big question before Americans is what is going to happen now that the taxpayer is shouldering the bailouts of these mortgage giants. A recent study undertaken in Queens show that things will continue to remain as bad as before.

The latest report shows that foreclosures in New York City made a modest increase in August. Taken in isolation this bit of news should not be disturbing. But what is of concern is that except for Queens all the other boroughs showed a decline in foreclosure numbers. James Sanders Jr. a City Councilman commented, “Queens, in one sense, the buck is stopping here – the buck is being lost here.” He lamented that the leaders have not risen to the call of the hour. He added, “our community is the hardest hit in New York City, we at every level should be screaming the most, and demanding action of our leaders.” According to propertyshark.com, foreclosures increased in Queens by about 45% from July. On the other hand in Brooklyn, Staten Island and Manhattan the foreclosure numbers fell by 29%. It is the foreclosures in Queens that have single-handed increased the average in New York City for August.

Sanders feels that he can smell racism here. The sub-prime lenders have preyed upon the Blacks. Since there is a large concentration of Afro-Americans in Queens it is not surprising that foreclosures here are higher than elsewhere in New York. He feels that this is the “single greatest loss of black wealth since the Great Depression.” It spells loss for the Asians including the Japanese. If the losses continued unabated then the entire borough will buckle under. Sanders statement bears out the fact that cities having a large number of coloured people like Miami and Los Angeles have also been badly affected by the mortgage catastrophe.

Henry Paulson the treasury secretary announced before the media that the government was taking over the reins of Fannie and Freddie. A cursory glance showed that their cash reserves have fallen to dangerously low levels because of millions of Americans defaulting and facing foreclosures. If the treasury failed to step in thousands would suffer together with the jumbo mortgage giants. On the local level the reaction to the takeover remained ambiguous but the global markets rallied. It all boils down to the taxpayers propping up Fannie Mae and Freddie Mac.

Court Rules Against Foreclosure

Julie Parker — Tue, 02 Sep 2008 11:53:41 +0000

In New York a court ruled against foreclosure citing it to be an instance of predatory lending.

Like any other parent David and Karen Shearon had gone ahead with the purchase of their first house nursing the hope that their three children would be provided with security and stability. At that point it did not seem difficult because although the couple jointly earned about $30,000 they could make a down payment of $335,000 for the house on Staten Island in New York. But within a year the situation dramatically changed with phenomenal rise in interest rates. It was much higher than what they had been told. Soon a foreclosure notice was pasted on their front door. The server did not do the job quietly but tried to make it as uncomfortable as possible by shouting out the news that the Shearons are in foreclosure.

This was happening everywhere across the country. But here the lender was in for a surprise. The Shearons snarled back. So far it seems that foreclosure is retreating with its tail between its legs.

Last February a state trial judge of New York alleged that the lender had offended the predatory lending laws of the state. This is the first ruling of its kind in New York. Judge Joseph Maltese disallowed the bank permission to foreclose and ordered that the payments made towards mortgage by the borrowers together with legal expenses incurred should be returned. Noah Pusey, the legal representative of the Shearons aptly said that the case allowed the judge “reason to pause and consider” the current foreclosure climate not just here but across the country and the role of the mortgage industry in relation to it.

Tom Solferino the attorney for the bank denied that any predatory lending had taken place and it was a wrong reading of the application of the law. He admitted that predatory lending had been going on but his client had not resorted to it. In this case down payment had been made and it was all above board. The judge has agreed to give another hearing.

So far it has been an exceptional victory for the borrowers – the Shearons. Taking the cue many others are starting to fight off foreclosures in courts. James Tierney, former attorney general of Maine and present director of National Sate Attorneys General Program of Columbia Law School said that many judges are saying that a “fraud is a fraud, and we’re not going to let this proceed.”