REVERSE “MORTGAGES” ARE SUBJECT TO SAME DEFENSES AS ANY OTHER HOMEOWNER TRANSACTION

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I am getting a lot more inquiries about reverse mortgages in which Foreclosure is threatened. That’s far, there appears to be no difference in the challenges and offenses available to homeowner homeowners between what is ordinarily falsely described as a “conventional Loan” and a “reverse mortgage loan.” The goal of the finance side of these transactions is the same: the sale of securities.

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So here is a common response that I am giving to people to make inquiries:

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The only players you have mentioned or companies that are claiming to be servicers. Based upon my research and analysis in other cases, I think it is highly unlikely that PHH, Ocwen, or Celink ever performed any services that are ordinarily associated with the use of the term “servicer.” I don’t think they are even authorized to perform those services. They are placeholders whose names are used to deflect attention from a real players, none of whom on or maintain a loan account receivable. In all probability, this transaction was subject to false claims of securitization, which means that securities were issued, but they did not represent any interest in any debt, note or mortgage.
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The procedures that are being offered to you or merely devices for you to waive rights to challenge their claim. I think there’s a high probability that the apparent debt has been extinguished through the process of securitization. At securitization, many layers of securities are issued and sold that re-pay the players and produce outsized profits that are not disclosed to the homeowners. On the finance side, nobody treats the transaction with the homeowner as though it was a loan except for purposes of “enforcement.”  In order to achieve their goal, it is necessary to fabricate false documentation and present them as valid and authentic memorialization of transactions. But the transactions never occurred.
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This is very confusing to anyone who is not fairly knowledgeable about investment banking, accounting and law. So that includes homeowners, lawyers and judges. Using the label of a “loan” the players are able to use the label of “lender” and “servicer.” None of these labels are true in the sense that they describe the actual function of the company is described as performing some role in connection with the loan.
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What all of that means is that if you are going to challenge them, you have an uphill battle to convince a skeptical judge that you were not simply trying to wiggle out of a legitimate debt. I’ve been litigating these specific cases for nearly 16 years. While I have been either instrumental or the actual lead attorney defending homeowners from these false claims, I can say that without any doubt, the process is a lot easier if the homeowner starts early and does not wait to assert challenges until they are actually in court. I have won cases in both categories, but it is a lot easier if the attorney can state and show that there were previous statutory attempts to obtain knowledge of the identity alleged creditor, and the existence and status of the alleged loan account.
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Don’t Hold your Breath: New York’s Cuomo will make Reverse Mortgage reform a priority — really?

http://nypost.com/2017/01/15/cuomo-will-make-foreclosure-reform-a-priority-finally/

Gov. Cuomo and state lawmakers are finally making reverse-mortgage foreclosure reform a priority this year — following continuing coverage of a crisis by The Post.

Last week, the governor announced plans to provide reverse-mortgage holders the right to a mandatory foreclosure settlement conference with their lender, overseen by the court, just as traditional mortgage borrowers have, and to update regulations to prevent reverse-mortgage foreclosures.

The governor announced these measures amid a raft of new proposals in his State of the State speeches. His reverse-mortgage proposals have similar intent as legislation introduced last year by Assemblywoman Helene Weinstein and state Sen. Jeff Klein in the wake of a July report by The Post about a dramatic spike in foreclosures on reverse mortgages — risky home-equity loans made to senior citizens.

“Attention has been focused, by The Post particularly, highlighting some tragic situations individuals found themselves in, and it has really bumped the problem of reverse-mortgages to one of the top agenda items as we go into the legislative session,” Weinstein said.

Reverse-mortgage loans were created to allow seniors to tap equity in their homes without selling, but have turned into a nightmare for legions of New Yorkers, including Howard Beach homeowner Frederick Feil. Last July, The Post covered Feil’s struggles with his lender, Finance of America Reverse, and servicer, Reverse Mortgage Solutions, to allow him to catch up on payments missed due to illness, and keep his home.

After the story, Finance of America Reverse worked out a deal with Feil and his attorney at JASA Legal Services for the Elderly. His loan has been reinstated and he is up-to-date on property tax payments, but Feil says he’s still in foreclosure hell because Reverse Mortgage Services has not officially discontinued the foreclosure.

“You get nervous wondering what’s going on, is it settled or not? Until I get complete paperwork in my hand … the mortgage company is still driving me nuts,” Feil said.

A spokeswoman for Finance of America Reverse said she expects the necessary paperwork to be completed “in the very near future.” Reverse Mortgage Solutions did not respond to a request for comment.

Klein is drafting other bills aimed at better regulating marketing and origination of reverse mortgages, and improving default procedures. Both he and Weinstein are working on legislation to provide seniors with clear, comprehensive information before they take out reverse mortgages.

With the governor’s support, stronger protections for reverse-mortgage holders — which failed to pass last year — are likely to finally become law. But it’s unclear who will underwrite free legal services like the ones JASA provides once money from the 2012 National Mortgage Settlement — a major source of nonprofit foreclosure-prevention and assistance funds — runs out this fall.

While legislative efforts heat up, the New York State Department of Finance continues its probe of Reverse Mortgage Solutions and Champion’s reverse-mortgage operations in New York state, launched after The Post’s story last July.

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