Foreclosures

A New York judge recently dismissed a foreclosure case against a mother and daughter, ruling that the bank missed New York’s six-year deadline to file its lawsuit.  The decision could mean mortgage payments disappear and the two own their home free and clear, more than eight years after their lender foreclosed on them.

State Supreme Court Justice William Rebolini decided in favor of the family, writing that U.S. Bank National Association was “untimely” in suing last year to take back the home.  In May 2006, the family took out a $250,000 mortgage to fund home repairs, but shortly after one of the relatives left the home and the owner underwent two difficult surgeries.  As a result, payments were missed.

The owner and her daughter applied for loan modifications four times, but lenders who bought and sold the loan denied their requests.  A lender that previously held the mortgage sued to foreclose in March 2007, demanding the entire mortgage balance due.  By calling in the loan, the clock started ticking on New York’s six-year statute of limitations for such lawsuits.

The lender could have used a legal tactic to stop the six-year clock, but failed to do so.  In this case and others like it, the statue of limitations exists for a reason and there is an obligation on the part of the lender to bring the action on a timely basis.  This seems to be a growing trend, as a number of homeowners in New York are asking judges to dismiss foreclosure cases because the statute of limitations has expired.  Banks can avoid getting themselves in this situation by giving homeowners a loan modification, helping them cure their default.

In Florida, some courts have ruled lenders cannot bring foreclosures if certain criteria are met: the lender already filed for foreclosure, demanded payment of all the money borrowed, and lost its foreclosure case.  If it fails to file another action within five years of the first lawsuit, the lender can no longer foreclosure and evict the residents, some courts have ruled.

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Choosing the right attorney can make the difference between whether or not you can keep your home. A well-qualified Miami foreclosure defense attorney will not only help you keep your home, but they will be able to negotiate a loan that has payments you can afford. Miami foreclosure defense attorney Timothy Kingcade has helped many facing foreclosure alleviate their stress by letting them stay in their homes for at least another year, allowing them to re-organize their lives. If you have any questions on the topic of foreclosure please feel free to contact me at (305) 285-9100. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:
http://www.nbcmiami.com/news/local/Five-Years-After-Foreclosure-Some-Keep-Homes-303817841.html

The Ninth Circuit recently overturned precedent allowing for attorney’s fees in a debtor’s prosecution of a creditor, after the creditor violated an automatic stay.   The case transpired after a woman filed a lawsuit against Wells Fargo subsidiary America’s Servicing Company in 2009 after it sold her home at a trustee’s sale, despite the fact that a stay had been entered in a Nevada bankruptcy court.

After the bankruptcy court found the company willful in its intent, it granted the woman $80,000 in sanctions and damages – including $20,000 in attorney’s fees.  America’s Servicing argued on appeal that the bankruptcy court had improperly included the attorney’s fees with the “actual damages” awarded, and a federal judge reversed that portion of the award.

The woman then sought an additional $10,000 in attorney’s fees for her defense of the company’s appeal. The bankruptcy court denied this, finding that the fees did not constitute “actual damages” because the stay violation had ended before she had to challenge the appeal. But the Bankruptcy Appellate Panel reversed the decision and granted the fees, and the Ninth Circuit upheld the panel’s judgment.

In a 20-page opinion, Circuit Judge Paul Watford wrote that a crucial precedent case is Sternberg v. Johnston, in which the circuit held that the statute at issue allows a debtor to recover only those fees incurred to end the stay violation itself, not the fees incurred to prosecute a damages action.

But Watford pointed out that Sternberg “misconstrued the plain meaning” of the statute, and the circuit overruled the case to the extent that it was inconsistent with its opinion.”Rather than decide whether Sternberg‘s holding extends to the facts of this case, we think the better course is to jettison Sternberg‘s erroneous interpretation of [the statute] altogether,” he said.

Watford said that Congress’s inclusion of the automatic stay provision “strengthened the remedies previously available to debtors injured by willful stay violations,” and it “makes an award of actual damages and attorney’s fees mandatory, and grants bankruptcy courts the discretion to impose punitive damages in appropriate cases.”

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If you have any questions on this topic or are in a financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.