Can Reducing Court Delays and Narrowing Scope of Homeowner Protection Laws Contain the New York Foreclosure Epidemic?

New York Judge Thomas F. Whelan in his article entitled, The Long Island Foreclosure Epidemic, projects a light on the causes of the extensive delays in New York foreclosure lawsuits. There is no question that a foreclosure lawsuit can take up to 8 to 10 years to finish.

Judge Whelan writes that state laws created to protect homeowners can be used as a weapon instead of a shield to delay foreclosure lawsuits. He also observed that court procedures can contribute to lengthy delays.  

I believe it is also important to consider the lenders role in the foreclosure epidemic. 

First. Why are lenders so reluctant to enter into settlements that are "win win" i.e. modifying the loan with an interest rate reduction. Additionally a lender can defer  payment of a portion of the principle balance by requiring a lump sum at the end of the loan. By restructuring a loan with a lower interest rate and allowing for a deferred lump sum principle payment a lender can recover most of it's money, a homeowner can begin to make affordable payments and a foreclosure lawsuit will no longer clog the court system. To often lenders allow the loan modification or settlement process to be extremely frustrating and down right degrading. Lenders create unnecessary processing delays and make unreasonable requests for previously submitted documents. In some instances a lender can take up to a 1 year before making a decision. There is no reason why a lender can't make a decision to modify a loan in less than 2 weeks after a homeowner submits their paperwork.

Second. Lenders and their attorneys delay court proceedings by doing nothing. A foreclosure lawsuit can sit in court for years before a lender takes the next step in the court process. You will never find a single homeowner or property owner rushing to court to "force" a lender to foreclose faster. So a homeowner waits in foreclosure limbo while interests, fees and costs accrue. While it's true a good foreclosure defense attorney can use the law and court procedures to "extend" the life of a foreclosure lawsuit ultimately the lenders choose the pace of the case.  

Third. There may be an incentive for lenders to not foreclose quickly since a completed foreclosure sale requires the lender to assume the risks and costs associated with managing the property. Interests, fees and other loan costs accrue while a foreclosure lawsuit is pending. The homeowner ultimately pays the entire "bill" via a foreclosure sale. Currently property values continue to rise thereby increasing the likelihood a lender will collect all of its money. Additionally many loans in foreclosure have interest rates ranging from 6.5% to 11%. Does the lender say "cha ching" during a delayed foreclosure?  

I have been a beneficiary of the delays in foreclosure lawsuits. For over 10 years I have succeeded in defending foreclosure lawsuits brought against my properties. During the 10 years I obtained a loan modification, principle reduction and the dismissals of foreclosure lawsuits. In one such case, due to my lenders inaction, I filed a quiet title action under New York State law (RPAPL section 1501(4)) which led to a court ordered cancellation and discharge of my mortgage. You can read the decision here: Augustine Diji v. Deutsche Bank. You can read the entire case here: Diji v. Deutsche. 

Judge Whelan confirms the ongoing trend to find and implement real solutions to end foreclosure delays and to reduce foreclosure lawsuits in the New York court system. 

Bottom Line: A lender should not have to wait a long time to collect money it is rightfully owed. Yet a homeowner is duty bound to defeat a lender who does not rightfully attempt to collect a loan. 

How I Created a Brighter Financial Future for Myself, My Family, and My Business by Helping Home Owners Save Their Properties

Hello my name is Augustine Diji.

In 2010, I wrote the book Strategic Default: How to Create a Brighter Financial Future for You,Your Family or Your Business. Since then I have helped many people save their homes or investment properties from foreclosure. With my assistance homeowners obtained loan modifications. I devised strategies for “holding off” lenders during foreclosure proceedings by sharing my investigative research with clients and their attorneys on the misuse of loan and foreclosure documents. I have negotiated principle and interest rate reductions for myself, friends and clients at times eliminating the entire principle balance. I have obtained loan modifications and principle reductions on the loans for my properties.

What started out as financial self-preservation became an experience in how to turn failure into success. I helped over 100 people save their homes or investment properties and, most importantly, I helped the same clients “create a brighter financial future” for themselves. With my work came the greatest satisfaction: Helping my friends and clients regain their sanity and confidence while protecting their family and financial livelihood.

By joining with me to “fight the fight for financial self-preservation” all of us so called “strategic defaulters” ended up regaining personal and financial security. I finally understood 2 simple truths. First. Failure can make you better because it opens the door to humility. Second. The path to success is intertwined with the success of others. Therefore, it is important to give the best of you to the rest of us.

For me, getting here was not an easy journey.

In 2006, my descent to personal and financial ruin began to pick up pace. I was an arrogant, “too smart for my own good”, real estate attorney. On top of that, at the time I neglected my marriage by being singularly focused on work and entertainment. Absolutely forgetting my mother’s and my father’s lessons about developing personal integrity, ensuring family support and being true to oneself I became a greedy, self-centered person who refused to listen.

By 2007 I was in foreclosure on all my properties while my law career was slipping away through my fingers. In 2010 my marriage came to end (no children) and I was forced to resign from the practice of law. My reputation was in tatters. I lost the respect of friends and colleagues. I was close to the edge of total personal and financial ruin. I became so paranoid that “everyone knew I was a loser” I hid myself from family, friends and the outside world.

Why am I sharing all of this?

Well there are reasons why certain outcomes befall each one us. As time went on it became clear that I needed to lose everything in order to shed the “fake”, scared, insecure man standing in front of the mirror.

The first step: Learning how to clear my mind of “self-made” fears and negative thoughts. So, I became serious about practicing meditation, Chi Gung and yoga.

During my worst I learned to become my best. I met my best friend who became my wife. I worked (and continue to work) long and hard to repair broken relationships in order to regain trust. I am paying off most debts. I sought the advice of many close friends, mentors, elders and respected professionals. I embraced the pain of rejection as motivation to become a better person. I took it on the chin because I was told it was the only way to survive.

The wise words of a close friend soon became true: “Things are only as bad as you think they are. Change your thinking.”

Now, in 2020, I am happily married with 2 beautiful children. I became a yoga teacher after studying in India. My partner and I operate a yoga studio in Brooklyn, New York called Greene Moments Studio. I am a New York State licensed real estate broker. I am an expert in strategic default consulting, foreclosure prevention and loan modification negotiations. My work has helped property owners regain tens of millions of dollars in equity as they have been beneficiaries of rising real estate market values. I am proud to have helped people gain their peace of mind.

Most importantly, with the support of an amazing family I have become the best version of myself.

Remember that you are not alone on your journey and you always have the power to change for the better.

Latest Mortgage & Real Estate News - 1-8-2018

Homeowners are Sitting on Trillions in Cash 
Following the housing crash, millions of borrowers fell underwater on their mortgages, owing more than their homes were worth. Fast-rising home prices over the last two years have brought borrowers above water and beyond. Approximately 80 percent of homeowners now have equity they can use, cash which could fuel the economy. Just 2.7 percent of borrowers, or about 1.36 million, still owe more on their mortgages than their homes are worth. Read More at CNBC.

The Banks with the Most CFPB Complaints in 2017
LendEDU, an online marketplace for student loan refinancing, put together a list of banks that received the most consumer complaints in 2017, as measured by the number of complaints per billions of dollars in deposits. Read More at Housing Wire. 

Mortgage Loan Modifications Basics

If you’re struggling to make your monthly mortgage payments or have fallen behind, you may be at risk of losing your home. But depending on the circumstances, you may be eligible for a loan modification, which can make it easier to stay on top of mortgage payments and avoid foreclosure. If you’re in this position, here’s what to know about getting a mortgage loan modification. Read More at NerdWallet.

Latest Mortgage & New York Foreclosure News - 12-23-2017

The Federal Housing and Finance Agency Changing Credit Models To Expand Homeownership Opportunities
FHFA’s request for input is a step forward towards creating a marketplace where credit scoring models can be judged on their predictiveness, innovation and inclusivity instead of the status quo where the government has created a de-facto monopoly for FICO,” said Barrett Burns, VantageScore Solutions president and CEO. “Monopolies never benefit markets or consumers and they create the opportunity for pricing power unchecked by competition. Read More at HousingWire.

New Foreclosure in NYC Up 79% in 3rd Quarter 2017
The number of first-time foreclosures in NYC surged 79% year-over-year in Q3 2017 – 859 homes were scheduled, compared to 481 in Q3 2016. After a peak in foreclosure activity in Q2 2017, with 911 new foreclosures scheduled across all 5 boroughs, Q3 2017 brought a slight slowdown in the number of cases. This translates into a 6% decrease quarter-over-quarter, following a trend we’ve noticed when tracking foreclosure data as Q3 is usually slower than Q2. By property type, single- and two-family homes have seen the highest increases in Q3 2017. Read More at Property Shark. 

Latest Student Loan News - 10-2-2017

Half all Millennials would Give up Their Right to Vote to have Their Student Loans Forgiven
It's not news that millennials are in debt. 42.3 million Americans owe a total of $1.33 trillion in federal student loans, according to the U.S. Department of Education. 20-somethings pay on average $351 a month, reports the Federal Reserve. The median monthly payment for that age range is $203. Now a survey from Credible, conducted through Pollfish, offers insight into just what millennials would be willing to do to be free of those loans. The most popular answer the 500 respondents between the ages of 18 and 34 chose for what they would be desperate enough to sacrifice: suffrage.Half of them said they would give up the ability to vote in the next two presidential elections. Read more at CNBC

From studentloanhero.com - The Complete List of Student Loan Forgiveness Programs and Options
Have you ever wished your student loans would just go away? While there’s no way to snap your fingers and have your student loan debt magically disappear, there are ways to get it forgiven. There are various student loan forgiveness programs out there for people who work in public service, education, and other areas. Some states are even helping debt-saddled graduates pay off their loans. Whether you’re struggling with six-figure debt or looking for “free money” to pay off your student debt, student loan forgiveness could save the day.

Latest Student Loan News - 7-18-2017

As Paperwork Goes Missing, Private Student Loan Debts May Be Wiped Away
Tens of thousands of people who took out private loans to pay for college but have not been able to keep up payments may get their debts wiped away because critical paperwork is missing.

The troubled loans, which total at least $5 billion, are at the center of a protracted legal dispute between the student borrowers and a group of creditors who have aggressively pursued them in court after they fell behind on payments.

Judges have already dismissed dozens of lawsuits against former students, essentially wiping out their debt, because documents proving who owns the loans are missing. A review of court records by The New York Times shows that many other collection cases are deeply flawed, with incomplete ownership records and mass-produced documentation... Read More at NY Times

Your Student Loans Might Be Forgiven Thanks to Some Lost Paperwork
Ah, student loans. The first of many bad decisions you made in college. At the time, they seemed like a great idea. After all, how could you be expected to get a job in the modern world without a four-year degree in English literature? It's not like they're going to let you make money in this world if you don't have an informed opinion on Shakespeare's comedies! But now that years have passed and you've realized that you could probably have the exact same career that you have right now if you just started interning after college while picking up bartender shifts on the side, the $60,000 you owe is beginning to look a little ridiculous. Throw in all the recent news stories about Betsy DeVos and the Trump administration's plans for the Department of Education, and the picture begins to look a little terrifying. Well, have I got some potentially good news for you! According to a new report from The New York Times, a combination of lost paperwork and the shady way in which private student-loan debt is handled has conspired to potentially wipe away your loan debt... Read More at GQ

Latest New York Foreclosure News - 5-9-2017

Repeat foreclosures in New York City have reached an all-time high

New York homeowners are in default mode — again. The city leads the nation in repeat foreclosure filings and the winner in all this is the residential mortgage servicing industry, which collects monthly payments and cashes in on fees for every homeowner’s misfortune. The number of repeat foreclosure filings in New York City far outstrips that of other major cities like Los Angeles, while New York state is No. 1 for repeat foreclosures, outpacing every other state and the US as a whole. In a report prepared exclusively for The Post, Attom Data Solutions found that in New York City last year, roughly 4,900 — or more than half of all new foreclosures filed — were repeats, up from just 5 percent in 2008. Read More at NY Post

QUIET TITLE NY - Mortgage Eliminated and Removed from Property Due to Acceleration of Mortgage Loan and Statute of Limitations. 

In a pair of decisions in which lenders lost the right to foreclose a New York Supreme Court judge and a New York Appellate Court each decided that the 6 year statute of limitations prevented the lender from collecting the mortgage loan. In Augustine Diji v. Deutsche Bank, a judge for the New York State Supreme Court, Kings County, wrote a decision eliminating the plaintiff, Diji's, mortgage. The judge ruled that Diji's mortgage loan was accelerated in 2007 and after 2 failed foreclosure cases Deutsche Bank's time ran out to file a foreclosure. Based upon Deutsche Bank's failure to file in time the mortgage was removed from the property. In a highly watched case, the Appellate Court in Beneficial Homeowner Service Corp. v. Tovar, ruled that the lender's foreclosure case must be dismissed because the statute of limitations had passed. The Appellate justices said that even if a homeowner is not served with foreclosure papers a lender's acceleration of a mortgage loan still remains valid.          

CoreLogic: Foreclosures sink to lowest level since 2007: Serious delinquency rate remains relatively high on East Coast
Serious delinquencies and foreclosures continue to drop, hitting near decade lows in February, according to the Loan Performance Insights Report from CoreLogic, a global property information, analytics and data-enabled solutions provider. Mortgages delinquent by 30 days or more, including those in foreclosures, made up 5% of the market share in February, a decrease of 0.5 percentage points from the year before, according to the report. “Serious delinquency and foreclosure rates continue to drift lower, and are at their lowest levels since the fourth quarter of 2007,” CoreLogic chief economist Frank Nothaft said. “Moreover, the past-due share dropped to 5%, the lowest since September 2007.” Read More at Housingwire.

Brooklyn court moves to dismiss thousands of foreclosure cases: Lawyers say homeowners will be negatively affected by the action
The court said it planned to dismiss all cases filed before Jan. 1, 2016 that have seen no court activity after Sept. 30, 2016. It quietly published a notice of the administrative dismissal in the New York Law Journal on Thursday, April 27, giving parties until Monday, May 1 to contact the court to keep their cases alive. Foreclosure defense lawyers say that while it might seem like a good thing for foreclosure cases to be dismissed, it would in fact be extremely negative for homeowners battling lenders. For one, all of the motions a homeowner had filed taking issue with the lenders' claims would be lost. In addition, many of the delays could be due to the lenders dragging their feet, lawyers say, but dismissing the case without fault to either side would allow the lenders to relaunch their case with a blank slate. Read more at DNAInfo.

Latest Foreclosure News 11-1-2016

Freddie Mac Plans to Make Crisis-Era Foreclosure Prevention Permanent 

Freddie Mac is working with it's regulator the Federal Housing Authority to "create permanent foreclosure-avoidance programs as" HAMP is set to expire this year, December 31, 2016 and HARP is set to expire on September 30, 2017. Read more at HousingWire.com.

Boomerang Borrowers are Here!!

Housing Wire reports on the rise of the "Boomerang Borrower". Essentially, a "Boomerang Borrower" is a borrower who has established "responsible credit behavior" and "improved" credit scores. These borrowers, once hit by the 2008 and 2009 financial crisis (foreclosure, short sales, etc.), are now experiencing the removal of negative credit data from their credit report due to the seven year limit for negative information. Thus the opportunities for this "group to qualify for mortgage loans" are growing. Read more here at HousingWire.com.

New York Foreclosure Alert - 9-29-2016

New York recently adopted sweeping legislation to reform the foreclosure process. New York's Governor, Andrew M. Cuomo, signed legislation into law that:

1. Enhances the effectiveness of settlement conferences for homeowners by prescribing the rights and duties of the parties and clarifying how the process should work to best protect homeowners contesting foreclosures and prevent them from losing their homes.

2. Establishes a Consumer Bill of Rights informing property owners of their rights in foreclosure proceeds to prevent people from losing their homes.

3. Creates the Community Restoration Fund (CRF), a new tool for the State of New York Mortgage Agency (SONYMA) to assist homeowners facing mortgage foreclosure. CRF will purchase defaulted mortgage notes from other lenders and offer favorable mortgage modifications to keep homeowners in their residences. CRF will have the ability to forgive a portion of a loan’s principal and make the loan affordable in areas where home values have declined or where a homeowner has experienced a decrease in income.

4. Imposes a pre-foreclosure duty on the banks and servicers to maintain vacant and abandoned properties. The bank has a duty to maintain and secure a residential real property where there is a reasonable basis to believe it is vacant and abandoned, and faces civil penalties up to $500 per violation, per property, per day for failing to do so.

5. Expedites foreclosures for vacant and abandoned properties.

6. Requires a lender to auction a property within 90 days of obtaining a foreclosure judgment. In addition, a foreclosing party would be required to take action to ensure that the property is reoccupied within 180 days of taking title.

7. Establishes an electronic registry of vacant and abandoned properties.

8. Provides a mechanism to “expeditiously complete a foreclosure” and work with land banks, Community Development Financial Institutions, and other local nonprofits to rehabilitate properties and resell them to new buyers.

Latest Foreclosure News 5-3-2016

Ocwen responds to National Mortgage Settlement foreclosure holds 4-28-2016
Early Thursday morning, Joseph Smith, the monitor of the National Mortgage Settlement, announced that Ocwen Financial was not in compliance with one of the performance metrics of the National Mortgage Settlement and prohibited the nonbank from taking foreclosure actions on more than 17,000 loans. According to Smith’s office, Ocwen “was delayed” in implementing its Corrective Action Plan for the failure of Metric 31, which relates to the mortgage servicer sending a loan denial motivation to a borrower, because of “difficulties in resolving the technical issues that led to the original fail.” Smith’s office said that because of those issues Ocwen must place 17,496 loans that "could have been affected" by this issue on foreclosure hold... Read More at the Housing Wire

Ocwen foreclosures frozen after National Mortgage Settlement compliance failure 4-28-2016
Less than one day after posting a massive loss for the first quarter of 2016, the nonbank has run afoul of the terms of the National Mortgage Settlement and is now forbidden from taking foreclosure actions on more than 17,000 loans. According to Joseph Smith, the monitor of the National Mortgage Settlement, Ocwen is not yet back in compliance with one of the performance metrics of the National Mortgage Settlement that it failed in the second half of 2014. Smith’s office announced in October that Ocwen failed metric 31, which tests whether the mortgage servicer, Ocwen in this case, sent a loan modification denial notification to a borrower that included the reason for the denial, the factual information considered by the servicer in making its decision and a timeframe by which the borrower can provide evidence that the decision was made in error... Read More at the Housing Wire

Greece Economic Crisis : Pros and Cons of Debt Forgiveness

A recent Bloomberg article provided, in my opinion, the most succinct analysis of the pros and cons of debt forgiveness.

Bloomberg reported on the economic plight of Greece. Greece basically "strategically defaulted" on its debt due to it's inability to pay its creditors. Greece fell victim to Europe's debt crisis when Wall Street imploded in 2008. All of the risky investments finally caught up to Greece like so many other countries, companies, and individuals. A group of European countries tried to help Greece (to keep it from destroying the European Union) by providing several bailouts to Greece totalling, at least, $264 billion. At the same time, the International Monetary Fund (as a condition to lending money) has been pushing for the forgiveness of Greece's debts by its creditors.

The article briefly outlined the benefits of debt forgiveness as follows:

Strategic Default Alert

2 factors driving the trend toward strategic defaults for student loans 1-13-2016
The term “strategic default” was added to the financial glossary during the housing crisis of 2007-08. It meant homeowners made deliberate decisions not to keep making mortgage payments because they believed foreclosure would ultimately cost less than continued ownership of underwater homes. Now, the trend is gaining ground among recent college graduates with student loans--but it is impacting certain types of students and schools far more than others. Nationally, about 14 percent of all federal student loans default within three years after students leave college. A default generally is declared when a student fails to make timely payments for 270 days, and the consequences are severe including wage garnishment, loss of Social Security benefits, and confiscation of federal tax refunds. Read More at BenefitsPro

Short sale tax break on verge of being extended until 2017 12-18-2015
Homeowners who had short sales in 2015 are about to get big break on their taxes, thanks for a massive federal spending bill that’s about to be signed into law by President Obama. The Mortgage Debt Forgiveness Act was set to expire at the end of 2015, and without an extension, any mortgage forgiveness achieved in a short sale would have been counted as income for homeowners whom banks allowed to sell their homes for less than the amount of their mortgage during 2015. But an extension to the Mortgage Debt Forgiveness Act was included in the fiscal 2016 federal appropriations and tax relief bill, which passed both the House of Representatives and the Senate on Friday. Read More at the Housing Wire