Tuesday, July 21, 2015

Slow-Moving Litigation, Risk Of Case Dismissal, Failure To Promptly Refile, Statute Of Limitations Considerations Turn Foreclosing A Mortgage Into A Real Crapshoot For Some Sloppy Banksters

In Sound Beach, Long Island, Newsday reports:
  • A small but closely watched number of Long Island homeowners are asking judges to dismiss foreclosure cases against them, saying lenders missed New York's six-year deadline to file such lawsuits.

    Already, a judge has thrown out a Sound Beach couple's foreclosure case because the lender took too long to file its second lawsuit, after the first one was dismissed. The case has drawn intense scrutiny from attorneys who represent homeowners and lenders. In interviews with Newsday, attorneys said more homeowners have filed court papers seeking the same result.

    As Long Island struggles to emerge from its yearslong foreclosure crisis, the deadline could mean a yet-to-be-determined number of Long Island homeowners win their foreclosure cases and stay in their homes.

    It also could give some homeowners leverage to negotiate more affordable loan terms.

    In a typical scenario, a lender first sues to take back a home in 2007. Years later, a judge throws the case out because of problems with the lawsuit. The lender eventually files a new case. But by then, six years have passed -- and the statute of limitations may have expired.

    The deadline was never much of an issue before the 2007-2009 recession, since foreclosure cases rarely encountered yearslong delays, state Supreme Court Justice Dana Winslow in Nassau County said in an interview.

    Three to four years ago, when judges began warning lenders about the statute of limitations, the lenders "looked at it as so far in the future that they didn't need to be reactive," Winslow said.

    ***

    With New York's foreclosure process now taking an average of four years, the looming deadline raises fundamental questions about what is fair -- to homeowners and to lenders -- and about the proper resolution of long-drawn-out foreclosure cases.

    "There's a perception, which is false, that people are looking for free houses, and that is not true," said Ivan Young of the Young Law Group in Bohemia, who represented Fred and Theresa Tovar, the Sound Beach couple who won their foreclosure case in December.

    Lender plans to appeal

    The Tovars' mortgage company, Beneficial Homeowner Service Corp., an affiliate of HSBC, has filed court papers indicating it plans to appeal. The lender still has a lien on the home. The Tovars and Beneficial both declined to comment.

    "The bank is forcing [homeowners] into a situation where they have no choice but to raise the statute of limitations defense, because the bank has consistently refused to offer a loan modification," Young said.
    ***

    The Tovars cannot sell the property without paying off the lender's lien on their home. They could ask a judge to throw out the lien, but it is unclear how the case would be decided. "We are venturing into uncharted waters here regarding the statute of limitations defense," Young said..
For the rest of the story, see LIers hope six-year deadline will block foreclosures.

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