The tide has turned against homeowners!

A judge went too far when he practically halved the amount of principal a bank sought to recover in a foreclosure action to penalize the bank's purported lack of good faith during conferences, a Brooklyn appellate court has ruled.

After required settlement conferences in a residential foreclosure proved ineffective, Acting Suffolk County Justice Jeffrey Spinner forever restrained Bank of America from "demanding, collecting or attempting to collect, directly or indirectly" any sums linked to a $493,219 mortgage that were considered "interest, attorney's fees, legal fees, costs, disbursements." The bank could only collect principal, and any advances on property taxes or insurance, he said.

Spinner then enforced $200,000 in exemplary damages against the bank, cutting the principal to $293,219.

Then, the Appellate Division, Second Department, on Feb. 13 unanimously overturned Spinner in Bank of America v. Lucido, 2012-05450., saying he didn't have the ability to impose the penalties he did….

The full article can be found here: http://www.newyorklawjournal.com

Panel Censures Lawyer and His Debt Collection Firm

The Second Department said David A. Cohen and the Cohen & Slamowitz firm had a "voluminous history" of complaints for trying to collect debts from people who had already paid their bills or were not the ones who owed money to the firm's client-creditors.

Read more: http://www.newyorklawjournal.com

What to Do When Your House Is About to Be Sold Due to Foreclosure

Loan Complaints by Homeowners Rise Once More

An interesting article from the New York Times about the growing power of mortgage servicers in deciding which get a mortgage modification and which  must hand over their home in a foreclosure.  The servicers are also forming  relationships with companies that can benefit from foreclosures.

These specialty servicers are buying the rights to collect mortgage payments at discounts. The quicker the servicer can make the loan current again, the sooner investors pay back the servicers’ advance in full. This may incentivize servicers to offer modifications that cause borrowers to default again.

For the full article click here: www.nytimes.com