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Articles by Peter T. Roach

Located in Syosset, NY, Peter T. Roach & Associates, P.C. has the most experienced professionals in real estate, litigation, foreclosure, and bankruptcy law. Our vast knowledge and experience allow us to effectively take on any case. We do everything we can to better serve our clients and exceed their expectations! To learn more about our practice, please read some interesting articles about New York debt collection and real estate law.

Wednesday
Jan282015

New York Foreclosure Referrals: Get it right BEFORE you start

{Time to read: 7.5 minutes} Commencing a foreclosure in New York State is far different from commencing other types of litigation. In addition to the usual drafting, filing and serving of the summons and complaint, a foreclosure requires the Plaintiff to be licensed, to have satisfied various “conditions precedents”, and any of its agents, including Servicers and Law Firms, must comply with the Fair Debt Collection Practices Act (FDCPA). Once the file has been referred to your attorney, you may rely on him/her to ensure compliance with the numerous filing requirements and other consumer protection laws, however, there are important matters to comply with prior to referring a loan to an attorney for foreclosure, such as the following:

  • Ensure the Plaintiff or it’s Servicing Agent is Properly Licensed by New York’s Department of Financial Services (DFS). Any party that collects even a single payment from a “residential mortgage loan” must be licensed by the DFS unless they are exempt or have received a “waiver” from the DFS (see NYS DFS Regulation 418). Since commencing a foreclosure action is deemed to be an attempt to “collect payments,” the Plaintiff’s Servicer must be licensed by the Department of Financial Services unless the Plaintiff is exempt or has received the  “waiver” from the DFS.

  • Comply with RPAPL §1304: One of New York’s Consumer Protection statutes, RPAPL §1304, requires the Plaintiff or it’s Servicing Agent to serve a 90-day Notice before the Summons and Complaint can be filed. There are strict requirements as to the content and font size of the notice and while the statute requires a notice be sent to each “Borrower,” many Courts will dismiss the foreclosure, often “sua sponte” (meaning on its own initiative without any party requesting the foreclosure be dismissed!) unless each party who signed the Note AND each party who signed the Mortgage were properly served with the requisite 90-day Notice.  Should the Summons and Complaint not be filed within twelve (12) months of sending the 90-day Notice, the notice will expire, and a new one will be required.

  • Comply with RPAPL §1306: Another of New York’s Consumer Protection statutes, RPAPL §1306, requires the Plaintiff or its Servicing agent to electronically file a form containing information regarding the 90-day notice with the NYS Dept of Finance. In order to do so, you must obtain a username and password from the NYS Dept of Finance, which will only issue one to parties that are licensed, exempt or have obtained a waiver.

  • Comply with any Notice Requirements in the Mortgage: In addition to the “statutory notice requirements” imposed by RPAPL 1304, many mortgages contain clauses requiring notice of default and “an opportunity to cure” be provided prior to commencing a foreclosure. These “contractual notice requirements” typically, but not necessarily, require a thirty (30) day notice which can be given, and expire, during the ninety (90) day notice period.  

  • Comply with the Fair Debt Collection Practices Act: The Fair Debt Collection Practices Act (FDCPA) requires all consumers be provided with a notice giving them the right to “dispute the validity of the debt” within five (5) days of the initial communication between the consumer and the “Debt Collector”. Unless the Plaintiff is servicing its own mortgage, the Servicer, as well as the foreclosure attorney, is considered to be a “Debt Collector” and must comply with FDCPA. Failure to do so can result in statutory liability plus payment of the consumer’s legal fees, and, in some instances, a Class Action!

  • Comply with Dodd-Frank: The Dodd–Frank Wall Street Reform and Consumer Protection Act, prohibits initiating the foreclosure until the borrower is at least 120 days in arrears.  (Note that the 90 Day Notice required by RPAPL 1304 may be served, however, during the 120 days.)

  • Avoid Dual Tracking: HAMP prohibits initiating the foreclosure while any Loss mitigation applications are being reviewed.

  • Confirm possession of the Note, Mortgage and all Assignments of Mortgage: Not only is “Lack of Standing” the most common defense asserted today to a residential mortgage foreclosure action, based upon the failure to validly transfer ownership of the Note and Mortgage, New York CPLR 3012-b now requires a Certificate of Merit containing copies of the Note, Mortgage and any Assignments of Mortgage to be annexed to every Foreclosure Summons and Complaint at the time it is filed.  While affidavits attesting to the facts and circumstances of the “loss” of these documents may be submitted, one can expect delays at best and dismissals at worst.

  • Send “Pre-Foreclosure/Post-Foreclosure” Referral Letters: Certain loans (depending on the entity owning the loan) require pre-foreclosure referral letters and post-foreclosure referral letters containing specific required info & disclosures before/after referral of the loan to a foreclosure attorney.

Failure to comply with the foregoing requirements can result in fines, sanctions, loss of interest, the foreclosure being discontinued, etc. which is why it is so important to get it right BEFORE you start!

Peter Roach
Peter T. Roach & Associates, P.C.

 

Wednesday
Jan142015

Fair Debt Collection Practices Act

{Time to read: 4.5 minutes} The Fair Debt Collection Practices Act (FDCPA), codified in 15 USC, section 1692, is a federal statute which was enacted to protect consumers from abusive, unfair or deceptive practices by debt collectors.

Who is considered a debt collector?

Under Section 1592a(6) of the FDCPA, a debt collector is defined as “any person who uses any instrumentality of interstate commerce or the mails in any business, the principal purpose of which is the collection of any debt, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.” (emphasis added). This includes attorneys and Mortgage Servicers, but not creditors (or their employees) seeking to recover their own debts. Note, however, that it does apply to “any creditor, who in the process of collecting his own debt, uses any name other than his own, which would indicate that a third person is collecting or attempting to collect the debt.

 What does the Act mandate? The statute sets forth how a debt collector is and is not permitted to communicate with a consumer while attempting to collect a debt. Some of the provisions include:

  • A debt collector can only contact the consumer after 8 a.m. and before 9 p.m., unless they agree otherwise.  

  • If it is known that the consumer is represented by counsel, the communications must be conducted through the consumer's attorney.

  • If the debt collector knows or has reason to believe that the consumer’s employer doesn't permit them to be contacted during work hours, contact should not be attempted during these times at the consumer’s place of business.

  • If a consumer communicates to the debt collector in writing that he or she refuses to pay the debt or wants the debt collector to stop contacting them, no more contact can be made, except that the debt collector is permitted to tell the consumer that they may be taking some specific action, such as filing a lawsuit.

  • Debt collectors must send a written notice within five (5) days of their first communication with the consumer providing the amount that's owed and who the creditor is. The notice must also advise them that they have the right to dispute the validity of the debt, and that if they do, no further collection action will occur until the validation has been provided.

  • Debt collectors can’t make misleading representations or statements. They cannot threaten to garnish wages or attach or sell property unless they are permitted by law to take these actions, and actually intend to do so.

  • Debt collectors can't give false credit information to anyone, such as credit reporting companies. They cannot use a false company name, or send a document purporting to be an official court or governmental agency document if it is not one. They can't engage in unfair practices by trying to collect an unauthorized charge over and above what is owed, unless allowed by state law or by contract.

If a debt collector fails to comply with the Act, a consumer may sue for actual damages as well as statutory damages. If successful, the consumer may also be awarded attorney's fees, which can be very substantial.

Peter Roach
Peter T. Roach & Associates, P.C.

 

 

 

Monday
Dec222014

Proving the Note was Transferred

Prior to the “modern era” where mortgages were “securitized,” the original Note and Mortgage typically remained in the possession of the “local bank” that originated the loan, and the bank collected and retained the loan payments.

Today, most mortgages are sold and transferred numerous times, often without adequate procedures to document each transfer. Since the foreclosure crisis began, courts have begun to scrutinize Plaintiff’s “standing” to commence the foreclosure, whether or not the issue of Standing was raised by a defendant!

In 2011, the Appellate Division, Second Department, decided Bank of New York v. Silverberg, 86 A.D.3d 274 (App. Div. 2011), holding that irrespective of any Assignments of Mortgage, recorded or not, the ownership of a mortgage may not be transferred unless the Note is validly transferred as well. Id. at 283, reaffirming the requirement of UCC 3-201 that the Note must be validly transferred in order to transfer ownership of the Mortgage.

For example, if a mortgage was transferred from Company A to Company B then to Company C, and finally, to Company D, and Company D now seeks to foreclose, it first must prove that the Note has been validly transferred since its origination. Company D’s employee, however, can only testify as to how it obtained the Note from Company C; he/she cannot attest to anything that happened before because he/she does not have personal knowledge of the previous transfers, so affidavits must often be obtained from prior Mortgagees or their Servicers.  

Prior Mortgagees or their Servicers, however, are often unable or unwilling to sign such affidavits. Companies go out of business, files are lost or destroyed, and concern for potential liability makes getting these affidavits signed and returned  challenging, to say the least.

To resolve this problem as efficiently and expeditiously as possible, we recommend the following procedures:

1. Make the affidavits short and simple. One of the reasons company officials refuse to sign affidavits is the affidavit often contains extraneous information which can not be easily verified. There is no need to include statements regarding the default or any other facts besides those establishing the transfer of the Note.

2. Minimize the number of affidavits needed. In the example given, Company B can provide an affidavit stating that the Note was transferred to it from Company A and another stating that the Note was thereafter transferred from it to Company C.  Plaintiff (Company D) can then provide an affidavit stating that the Note was transferred to it from Company C. This establishes a complete chain of title for the three prior owners while avoiding the need to obtain affidavits from Company A and Company C.

If you would like to discuss any specific issues you are having, please feel free to contact me at peter.roach@roachlawfirm.com.

 

Peter Roach
Peter T. Roach & Associates, P.C.

 

 

 

Monday
Dec082014

Adverse Possession - Ya gotta believe!

Adverse possession is a long-standing doctrine which can be used to acquire title or other property rights to a parcel of land regardless of record title to the premises. By virtue of “adversely possessing” a parcel or portion thereof, a person who does not, in fact, have title to a particular property may acquire title to it which is superior to, and extinguishes the rights of, the record title holder.

In order to do so, he or she must “adversely possess” the property for a period of 10 years without interruption. Adverse possession requires the party claiming to possess the property in one of the following ways:

  • in an adverse manner

  • under a claim of right

  • openly and notoriously

  • exclusively and be in actual possession

As a practical matter, the doctrine of Adverse Possession is usually applied to resolve boundary disputes, rather than ownership of entire parcels. For example, if a property owner constructed a fence five (5) feet beyond his own property line and onto his neighbor's property, and the fence remains unchallenged for ten (10) continuous years, that property owner acquires title to the five feet of land, and the neighbor’s rights to it are extinguished!

In 2006, Walling v. Przybylo, 7 N.Y.3d 228 (2006) held that a possessor could adversely possess property even if he clearly knew from the outset the property being possessed rightfully belonged to someone else. New York’s legislature felt this result was unjust, so it modified the existing law, and amended the language of Real Property Actions and Proceedings Law of New York (RPAPL) Section 543 to change the standards for adverse possession within the state. The new wording changed the definition of the “claim of right” requirement so that now a person may no longer maintain a claim of title by virtue of adverse possession if he does not reasonably believe he owns the property claimed.

This reflects a significant change in New York law, which now only allows title to be transferred as a result of adverse possession in instances where someone believed at the time they took possession, that they owned the property they were adversely possessing, and not to someone seeking an opportunity to surreptitiously acquire a neighbor's idle property.  

If you have concerns regarding your property lines, or whether a neighbor is “adversely possessing” any portion of your property, you should contact a real estate attorney well versed in adverse possession law and the 2008 modification to the New York statute.  

 

Peter Roach
Peter T. Roach & Associates, P.C.

 

 

 

Wednesday
Nov192014

Surveys: What they are and why they are needed

When you finance the purchase of a house, Lenders will usually insist that you provide their attorney with a survey of the property to be purchased.  A survey is simply a drawing to scale of the property's boundaries and the structures built on the land, including the house, garages, swimming pools, fences, etc. and will ensure, amongst other things, that your structure or fences do not encroach on a neighbor’s property, and that theirs do not encroach on yours.

Compliance with Local laws: Every municipality has its own laws regulating the use, construction and location of real property situated within the municipality. Surveys will identify fences that are not constructed on the actual property line, structures that were built closer to the property lines than allowed, and other matters that may become serious problems if not resolved prior to closing.

Easements:  In addition to displaying the correct property boundaries which will help to avoid disputes with the neighbors, the survey will provide all necessary information regarding any easements (the right of use and/or entry onto the real property of another without possessing it) that affect the property.

Certification: One should always make sure the survey is certified to you by a licensed surveyor to ensure that you will have recourse should you suffer damages as a result of an erroneous survey.

Survey Inspection: If you are purchasing a residential property and wish to avoid the cost of a new survey, your Lender may waive the survey requirement and rely upon your title company issuing a “Survey endorsement” based upon an inspector physically inspecting the property to determine if anything has changed since the last survey was conducted.

Cost: While the cost of a survey will depend on a variety of factors, including the terrain and the shape and the size of your property, residential surveys typically range between $500.00 and $1,000.00. Considering you are most likely making one of the largest investments of your life, it is money well spent as this is not the time to be “penny-wise and dollar-foolish.”

When buying any property a survey is required and necessary, so make sure you give it a thorough review and solve any discrepancies.

Peter Roach
Peter T. Roach & Associates, P.C.