Foreclosure Defenses in
Suffolk County, New York

The Law Offices of Edmond R. Foy, PLLC Services

Contrary to common belief – there are numerous defenses to a Foreclosure Law Suit. Some attorneys will tell you “We can buy you some extra time” The Law Offices of Edmond R. Foy is here to win your case, not to buy you and your family “extra time” AND you will be informed of what those defenses are at your free consultation. The following is a list of defenses that occur either (1) due to a defect in your bank’s handling of your mortgage or (2) due to an error with the Bank’s Law Firm:

RPAPL 1304(2)

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

Fraudulent Assignment – Robo Signing

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 then 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.

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, the body of the notice must be 14-point type and bold.
Every word in that notice is controled by RPAPL 1303 and the entire notice must be on 1 page only. Failure to fully comply with any and all provisions of this law will give you grounds to win your case.

Mortgage Electronic Registration Services: “M.E.R.S”

If MERS is involved in your foreclosure case, 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 explaination 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, 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, transfering it many times to many different companies. The fear was that if compainies 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 and 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 responsibilty of MERS to keep track of who actually owned your mortgage.

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Where’s the Note Defense!

When you signed your mortgage papers either when you purchased your home or refinanced for a better rate, you should have signed two specific documents, one called a mortgage, the other called a note. The note is actually the contract (think of it as a personal check) the mortgage is simply an agreement between you and the bank that if you default on paying monthly that they may take your home to collect on the note’s debt.

If your bank cannot prove that they have your mortgage, there’s no effect, they can still foreclose! However, if your bank cannot prove that they own your note, you can defeat your Bank’s suit.

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, others may need multiple assignments in order to be 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.

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 plaintiff’s and their counsel 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 specifcially attest to the truthfulness of the documents on record under penalities of perjury – you have 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, you may have a case if there are certain discrepencies in the paperwork of those transfers. Your Bank must bring in all necessary parties in order 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.

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Is a Trust Involved? – No Assignent 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 writen up that governs the Trust.

Let’s jump to the important part – each of these contracts have 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.

I warned you, its complicated, but the following is the light at the end of the tunnel:

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 who 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 ended concluding, “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. This is what we call a homerun.