Blog

In DEUTSCHE BANK NATIONAL TRUST COMPANY, AS TRUSTEE FOR HOME EQUITY MORTGAGE LOAN ASSET-BACKED TRUST SERIES INABS 2007-A, HOME EQUITY MORTGAGE LOAN ASSET-BACKED CERTIFICATES SERIES INABS 2007-A v. Keith Etling, Superior Court of New Jersey, Appellate Division decided April 22, 2021, 2021 WL 1569376,  the Court answered the appeal question whether the trial court erred and abused its discretion by granting the plaintiff’s motion for summary judgment and denying defendant’s motion for reconsideration to vacate the summary judgment and dismiss because the record contained  no evidence of mailing of the NOI to defendant.

In this case, MERS assigned the mortgage to IndyMac Bank, FSB, which recorded the mortgage assignment on August 4, 2008 and thereafter there were five separate loan modification agreements between 2008 and 2016. The defendant default on the last loan modification and on April 3, 2017, a notice of intent (NOI) to foreclose was mailed, return receipt requested, in accordance with the Fair Foreclosure Act.  The record contained a copy of the NOI, which included the certified mail tracking number.

The mortgage was further assigned, and the plaintiff possessed the original note and mortgage at the time the complaint was filed.  Defendant filed answer deny all allegations and raising various defenses, including lack of standing. 

In the appeal, defendant did not dispute the plaintiff produced sufficient evidence to establish prima facie case of the right to foreclose.  He contended that plaintiff failed to produce sufficient evidence of property service of an NOI, specifically that there was failure to produce any envelope certified mail receipt or tracking history for the NOI. 

Under the FFA, a mortgagee must serve an NOI, “in writing, sent to the debtor by registered or certified mail, return receipt requested, at the debtor’s last known address, and, if different, to the address of the Property which is the subject of the residential mortgage” at least thirty days prior to commencing any foreclosure proceeding. N.J.S.A. 2A:50-56(a),(b). 

 On summary judgment, plaintiff provided (1) a photocopy of the NOI with the certified mail tracking number and (2) Hollis’ certification. Hollis certified that “[o]n April 3, 2017, [plaintiff’s loan servicer] mailed copies of the NOI to [defendant], at the mortgaged property … [in] JACKSON, NJ 08527-2427 via certified mail return receipt requested and regular mail.”  The Court deemed this evidence is sufficient, particularly given defendant’s failure to oppose plaintiff’s summary judgement motion and defendant failed to identify any genuine issue of material fact to preclude summary judgment.  Additionally, the denial for reconsideration was found to be within the sound discretion of the trial Court.  Thus, the Appellate Court affirmed the decision.

For any questions please contact Deborah Gallo, Esq, Director of Operations, at dgallo@friedmanvartolo.com.

A CEMA, Consolidation, Extension, & Modification Agreement is an agreement between your existing Lender and your New Lender to combine two or more loans into a new, consolidated loan to save money on Mortgage Tax in New York State. A CEMA can only be completed on a first loan covering one to three family houses, including individual condominium units but not on coops since they are not real property (and there is no mortgage tax on a coop loan).

If the borrower is refinancing their current first mortgage and has already paid the New York State mortgage tax, doing a CEMA will allow the borrower to pay the NYS mortgage tax only on the additional loan amount exceeding what was originally borrowed. Therefore, rather than paying the full mortgage tax on your entire loan amount again, instead you are only paying the tax on the difference between your new loan amount and your original loan amount which may amount to huge savings. Note there may be some additional fees and timing considerations when requesting a CEMA that you should discuss with your attorney and lender.

Example: If you have a $300,000.00 mortgage and refinance with a $450,000.00 mortgage in Brooklyn, you would normally have to pay a tax of $8,100.00, but with a CEMA you only pay mortgage tax on the new money of $150,000.00 in the amount of $2,700.00.

If you are selling your home, and your buyer is getting financing then your loan may be able to be assigned to your buyer for a significant mortgage tax savings that the seller and buyer can split after the fees are paid for a win-win for all!

If you are interested in buying, selling, or refinancing please reach out and I would be happy to answer any questions you may have and help you get started! Please contact, Katherine Kokkosis, Esq.  at kkokkosis@friedmanvartolo.com or call 212-471-5150.

Today Governor Cuomo signed into law a bill amending both the “COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020” and the “COVID-19 Emergency Protect Our Small Businesses Act of 2021.”  This amendment extends their applicability through August 31, 2021.  As a result the hardship declarations required under the acts will still be required to be sent and honored on any files between now and August 31, 2021.  This new date will now apply to foreclosures and evictions in both residential and commercial actions.

Specifically, the bill changes the “sunset date” of the statute, extending it through August 31, 2021.  Effectively any party which has filed a hardship declaration will enjoy the benefit of the extended stay.  Parties will also have additional time to submit the declaration, provided that the Court has not already been advised of their intent to proceed with the action at a conference held pursuant to the bill.  Finally, newly commenced actions will still require clients to attest to compliance with the statute.

Additionally, as you may recall from our prior updates, the Consumer Financial Protection Bureau (CFPB) currently has out for comment a series of rule changes which, if enacted, could result in a stay in commencement of some or all foreclosures nationwide to prevent a flood of new foreclosures upon the end of COVID forbearance programs.  The CFPB anticipates that such rule, if enacted, would go into effect in August or September of this year and would expire on January 1, 2022.  It is very likely that the pending New York legislation is intended to bridge the gap to the eventual CFPB relief.

Today Governor Cuomo signed into law a bill amending both the “COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020” and the “COVID-19 Emergency Protect Our Small Businesses Act of 2021.”  This amendment extends their applicability through August 31, 2021.  As a result the hardship declarations required under the acts will still be required to be sent and honored on any files between now and August 31, 2021.  This new date will now apply to foreclosures and evictions in both residential and commercial actions.

Specifically, the bill changes the “sunset date” of the statute, extending it through August 31, 2021.  Effectively any party which has filed a hardship declaration will enjoy the benefit of the extended stay.  Parties will also have additional time to submit the declaration, provided that the Court has not already been advised of their intent to proceed with the action at a conference held pursuant to the bill.  Finally, newly commenced actions will still require clients to attest to compliance with the statute.

Additionally, as you may recall from our prior updates, the Consumer Financial Protection Bureau (CFPB) currently has out for comment a series of rule changes which, if enacted, could result in a stay in commencement of some or all foreclosures nationwide to prevent a flood of new foreclosures upon the end of COVID forbearance programs.  The CFPB anticipates that such rule, if enacted, would go into effect in August or September of this year and would expire on January 1, 2022.  It is very likely that the pending New York legislation is intended to bridge the gap to the eventual CFPB relief.    For any questions regarding this legislation, please contact Richard O’Brien, Esq. at robrien@friedmanvartolo.com or Deborah Gallo, Esq, Director of Operations at dgallo@friedmanvartolo.com.

In a decision issued on April 21, 2021, a unanimous panel of the U.S. Court of Appeals for the Eleventh Circuit has ruled that a debt collector’s transmittal of the plaintiff’s personal information to the vendor it used to generate and send collection letters “constituted a communication ‘in connection with the collection of any debt’ within the meaning of [FDCPA Section 1692c(b)]”.  This section of the FDCPA prohibits a debt collector from communicating with anyone other than the debtor and certain specified third-parties “in connection with the collection of any debt” without the debtor’s consent, court permission, or to effectuate a post judgment judicial remedy.

In Hunstein v. Preferred Collection and Management Services, Inc., the debt collector electronically transmitted information about the plaintiff, including his status as a debtor, the amount of the debt, and the entity to whom the debt was owed, to a vendor that used the information to generate and send a collection letter to the plaintiff.  Hunstein filed a complaint, alleging violations of both the FDCPA, see 15 U.S.C. §§ 1692c(b) and 1692f, and the Florida Consumer Collection Practices Act, see Fla. Stat. § 559.72(5).

The district court dismissed the complaint for failing to state a claim, concluding that the plaintiff had not sufficiently alleged that the debt collector’s transmittal of information to the vendor violated Section 1692c(b) of the FDCPA because the transmittal did not qualify as a “communication in connection with the collection of any debt.”  (The district court did not accept supplemental jurisdiction of the state law claim.)

The Court first addressed whether there was standing to sue and found that because (1) § 1692c(b) bears a close relationship to a harm that American courts have long recognized as cognizable and (2) Congress’s judgment indicates that violations of § 1692c(b) constitute a concrete injury, the Court concluded that Hunstein had standing to sue.

The Court explained that § 1692e contains none of the specific exceptions that § 1692c(b) does; accordingly, there was no risk in Reese or Caceres that, by reading a “demand for payment” gloss into § 1692e, we would render other portions of that statute redundant or meaningless. And as an operational matter, § 1692e—which prohibits “false, deceptive, or misleading representation or means in connection with the collection of any debt”—covers the sorts of claims that are brought by recipients of debt collectors’ communications—i.e., debtors. 

The Eleventh Circuit rejected what it termed the debt collector’s “industry practice” argument that there is widespread use of mail vendors by debt collectors and a scarcity of FDCPA cases against them.  It commented that none of the cases cited by the debt collector involved Section 1692c(b) claims, the courts in those cases had no obligation to sua sponte determine whether there was a Section 1692c(b) violation, and the fact that this case “is (or may be) the first case in which a debtor has sued a debt collector for disclosing his personal information to a mail vendor hardly proves such disclosures are lawful.”

Having found that the plaintiff had stated a claim for a violation of Section 1692c(b), the Eleventh Circuit reversed the district court and remanded the case.  Anticipating the reaction its decision may create, the Court concluded its opinion:

It’s not lost on us that our interpretation of § 1692c(b) runs the risk of upsetting the status quo in the debt-collection industry.  We presume that, in the ordinary course of business, debt collectors share information about consumers not only with dunning vendors like [the defendant’s vendor], but also with other third-party entities.  Our reading of § 1692c(b) may well require debt collectors (at least in the short term) to in-source many of the services that they had previously outsourced, potentially at great cost.  We recognize, as well, that those costs may not purchase much in the way of “real” consumer privacy, as we doubt that the [letter vendors] of the world routinely read, care about, or abuse the information that debt collectors transmit to them. Even so, our obligation is to interpret the law as written, whether or not we think the resulting consequences are particularly sensible or desirable.  Needless to say, if Congress thinks that we’ve misread § 1692c(b)—or even that we’ve properly read it but that it should be amended—it can say so.

In review of this opinion, it is an initial reaction that there may be far reaching consequences.  What vendors are used by debt collectors to expedite the process – what are the risks of disclosure, and whether the process can be altered to remove the sharing of information.   No doubt, this case will result in more litigation.  For any questions regarding this case, please contact Deborah Gallo, Director Of Operations, at dgallo@friedmanvartolo.com.

On September 4, 2020, the Center for Disease Control (CDC) Director Michelle P. Walensky, M.D.  M.P.H. issued an order temporary halting evictions in the United States in an effort to mitigate the effect of COVID 19 and its spread.  The order was set to expired December 31, 2020 subject to extension, modification, or rescission. On January 29,2021. The CDC Director made decision to extend the order to March 31, 2021 and now further to June 30, 2021.  The CDC cites multiple data points reflecting that if evictions proceed, there will be increased homelessness and expansion of the severe risk of disease.  As all are aware, there has a strong direction to stay home to avoid the risk of COVID 19 and all variants. 

CDC Qualifications for Hardship include Income and Hardship as follows:

Income – In 2020 or 2021, I earned (or expect to earn) less than $99,000 as an individual or less than $198,000 as a joint tax return filer.  Or not required to report any income to the IRS in 2020.

Hardship – substantial household income reduction. Laid off from work. Hours or wages cut. Extraordinary out of pocket medical expenses (greater than 7.4% of adjusted gross income.

There are exceptions to the Order – if a tenant is engaging in criminal activity, endangering the lives of other tenants, damaging the property, violations of building or health code, or breaking other contractual agreements.  To be clear, those diagnosed with COVID  19, or exposed to COVID, and taking reasonable precautions to avoid the spread cannot be evicted. 

Those in violation of this Order, may be fined no more than $100,000 or jailed for a year, or both if the violation does not result in death, and more if it does.  The Department of Justice is given the authority to initiate criminal proceeding.

Federal judges in Texas and Ohio declared unenforceable a September 2020 order issued by the Centers for Disease Control that prohibits certain residential evictions because of COVID-19 through March 2021.  The U.S. District Court for the Eastern District of Texas found that while there may have been a public health benefit, the residential eviction moratorium was not economic in nature, was too attenuated from interstate commerce and was an unprecedented exercise of federal government authority in an area well within the scope of the states’ traditional police power.  The U.S. District Court for the Northern District of Ohio found that the CDC’s order exceeded the agency’s statutory authority to make and enforce regulations to stop the spread of communicable diseases between states because that authority was limited to actions to address infected animals, objects or properties.   Terkel v. Centers for Disease Control and Prevention, No. 6:20-cv-00564 (E.D. Tex. Feb. 25, 2021) and Skyworks, Ltd. v. Centers for Disease Control and Prevention, No. 5:20-cv-2407 (N.D. Ohio Mar. 10, 2021).

Likewise, five landlords filed suit in the U.S. District Court for the Eastern District of New York on February 24, 2021, requesting that the court bar enforcement of Part A of the New York COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020. The state law, in part, provides a stay based upon an application of hardship that could extend eviction cases until at least May 1, 2021.  Chrysafis, et al. v. James, Case No. 2:21-cv-00998.  However, on April 14, 2021, the Attorney General’s Motion to dismiss was granted, case dismissed for lack of subject matter jurisdiction, and plaintiff’s preliminary injunction denied.   The Attorney General was found not to be a proper party to the action (they were not the entity to enforce the NY Eviction moratorium.)

On March 4, 2021, an organization purporting to represent the interests of more than 4,200 building owners, managers and landlords in Pittsburg and other surrounding locales, filed suit in the Court of Common Pleas for Allegheny County, Pennsylvania, challenging the validity of a recently passed municipal moratorium on evictions during the pandemic. The plaintiff argues that the ordinance forces landlords to stay in or renew contracts in violation of the state constitution and the U.S. Constitution, and that the ordinance is an improper extension of the federal moratorium from the CDC. The plaintiff seeks a declaration that the ordinance is illegal and unconstitutional, and an injunction barring its enforcement or implementation.

State by State, we can expect continued litigation testing the authority of the CDC to issue a moratorium on eviction.  Moratorium after moratorium gets extended by the Government, so, there is not yet an end in sight at this time.  Even if a landlord organization is successful against the CDC, they must work through their State’s Eviction moratoriums.   We continue to monitor the litigation and trends.

For more information on this decision please contact Director of Operations, Deborah Gallo, Esq. at dgallo@friedmanvartolo.com.