"Pro Se" Homeowner Fails To Prove Violations Of NYS Anti-Predatory Lending Statute; Trial Court Gives Foreclosure Sale Go-Ahead

In Nassau County, Long Island, The New York Law Journal reports (reported at law.com):

• Declining to halt a foreclosure sale, a Long Island, N.Y., judge has been left with the "unhappy result" of a loan that should not have been taken for which the homeowner is nevertheless responsible. The case of Alliance v. Dobkin, 10625/06, is illustrative of the nationwide mortgage lending crisis: An increasing number of borrowers who agreed to onerous loan terms to finance homes they could not otherwise afford now are facing foreclosure. [... Nassau County Justice Daniel R. Palmieri] ruled that Dobkin could not rely on the state's prohibition against predatory lending to forestall foreclosure of her home.

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• In her court papers, Dobkin, who represented herself, relied exclusively on LaSalle Bank, N.A. v Shearon, 100255/07, a Staten Island case where a judge found the lender guilty of multiple violations of the state's anti-predatory lending laws. [...] The only difference between that case and hers, argued Dobkin in court documents, was that her situation was "more outrageous."

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• John Cilmi, whose Manhattan firm, Cilmi & Associates, represented the plaintiffs in the Shearon case, said in an interview that the decision was "concise and well-reasoned" under the applicable statutes. However, utilizing only the statutes can paint an incomplete picture, said Cilmi, who was not involved in the Dobkin matter. "When you review the statute, even if a home loan does not fall under it due to the dollar amount involved, that does not mean that there is not potential fraud involved in other aspects of the lending process."

For more, see N.Y. Judge Finds Homeowner Liable for Loan (Homeowner relied on 'LaSalle Bank v. Shearon,' thought to be the first reported decision enforcing provisions of the Banking Law).

Go here other posts referencing the LaSalle Bank v. Shearon NYS predatory lending case.

Editorial Note:

Not having the benefit of legal counsel, Ms. Dobkin represented herself in this case.

State AG Comments On Team Of Volunteer Lawyers Put Together To Represent Ohio Homeowners Facing Foreclosure

U.S. News & World Report recently ran a story on how the State of Ohio is addressing its foreclosure crisis. It reports that "the state has enlisted more than 1,300 lawyers—from state agencies and the private sector—to help struggling homeowners avoid foreclosure by reaching agreements with lenders or, if need be, through litigation." It interviewed Ohio Attorney General Marc Dann, who commented on what the function of these lawyers will be:

• The lawyers will work with the borrowers to see if there are defenses to the actual foreclosure, whether there was fraud or unsuitability in the creation of the mortgage to begin with, and then to assist in two other ways: either to help litigate the case or to help structure a settlement.

• With these complex mortgage products—the adjustable rates, the no-document loans that were out there—there are all types of things in the generation of loans that give rise to defenses. And with the fact that these loans then started to become sold seven, eight, nine, 10 times in the process, there are even legitimate legal issues as to whether or not the person filing the foreclosure has the legal right to file a foreclosure because they don't have ownership of the mortgage note. [...] We just convinced a court of appeals—the 10th District Court of Appeals in Franklin County, Ohio—to find that you can't bring a foreclosure action if you don't have paper that proves that you own the house.

When asked about the progress of Ohio's initiative so far, Dann commented:

• It's been actually kind of rewarding. My uncle is a retired transactional lawyer, and he said, "I've been negotiating with banks my whole life. I am so excited about getting to do this." So he signed up, went to the training. My aunt is happy because it gets him out of the house. Here is a guy that was representing big Fortune 500 companies negotiating with their banks. All of a sudden, that playing field is about to get leveled.

For more, see How Ohio Is Tackling the Foreclosure Crisis.

For other posts that reference the failure of some mortgage lenders and their attorneys of filing mandatory loan documents when starting foreclosures, Go Here , Go Here , and Go Here.

For other posts on homeowners using Federal & state consumer protection statutes to try and undo bad mortgage loans, Go Here and Go Here.

Mortgage Servicers' "Maze Of Fees, Firms & Flim-Flams" No Longer Fool Bankruptcy Judges

The New York Times reports:

• SLOWLY but surely, a handful of public-minded bankruptcy court judges are drawing back the curtain on the mortgage servicing business, exposing, among other questionable practices, the sundry and onerous fees that big banks and financial companies levy on troubled borrowers. It isn’t a pretty sight, if you are a borrower. But shining a light on this dark corner certainly qualifies as progress. The cases come out of bankruptcy courts in Delaware, Louisiana and New York, and each one shows how improper, undisclosed or questionable fees unfairly penalize borrowers already struggling with mortgage debt or bankruptcy.

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• “These cases clearly indicate that bankruptcy courts are no longer being fooled by the maze of fees, firms and flim-flams of the mortgage servicing industry,” said O. Max Gardner III, a lawyer who represents borrowers in Shelby, N.C. “The servicers and their lawyers should recognize the clear and present danger of these decisions while they still have time to turn their ships around and do the right thing.”

For more, including the details of the aforementioned Delaware, Louisiana and New York cases, see Piling On: Borrowers Buried by Fees.

Go here , Go here , and Go here for posts on questionable mortgage servicing practices.

Editorial Note:

The next question that arises is how long will it take for the state courts, where the vast majority of foreclosure actions are litigated and decided, to stop "rubber-stamping" foreclosure judgments against unrepresented homeowners and catch on to what the Federal bankruptcy judges are now discovering.