Mortgage Foreclosure Frauds in Fremont

Plaintiff filed this foreclosure action, alleging that it is the holder of a mortgage dated October 13, 2006, executed, acknowledged, and delivered by defendants Laroc and Nasta, the fee owners of the premises known as 57-29 160th Street, Fresh Meadows, to Fremont Investment & Loan, to secure repayment of a note evidencing a loan in the principal amount of $585,000.00, plus interest. Plaintiff claimed that defendants Laroc and Nasta breached the conditions of the mortgage and note by failing to make the monthly installment payment of interest due and owing on December 1, 2006. As a result, the entire mortgage amount was accelerated.

Plaintiff won a judgment of foreclosure and sale against defendants Laroc and Nasta on January 15, 2008, based on their failure to respond to the lawsuit. Defendants Laroc and Nasta ask for a stay of the foreclosure sale, a vacate of the foreclosure and sale decision, and permission to serve a late answer. They claim that their failure to respond to the complaint was unavoidable. They have compelling defenses based on fraud, coercion, lack of standing, and violations of Banking Law 6-l and General Obligations Law 349.

The plaintiff opposes this motion.
The affidavits of service filed by the plaintiff offer prima facie proof of appropriate service upon defendants Laroc and Nasta, to the extent defendants Laroc and Nasta seek to vacate the judgment of foreclosure and sale. In addition, defendants Laroc and Nasta were served and issued a notice of presence on their behalf by their former counsel, and the notice of appearance did not oppose jurisdiction. Defendants Laroc and Nasta allege they depended on their attorney to defend them in court and were unaware that the attorney failed to assert any defenses on their behalf. However, they do not dispute that plaintiff properly served them with the process.

Although a court has the authority to accept law office failure as an acceptable excuse, a conclusory, incomplete, and unsubstantiated claim of law office failure does not qualify. Defendants Laroc and Nasta’s uncorroborated and insufficiently articulated justification for neglecting to answer does not constitute a valid excuse in this case. Before hiring their old attorney, defendants Laroc and Nasta defaulted on their answers. Furthermore, they do not claim that their former attorney misled them about their potential defenses. They have presented no evidence that such an attorney failed to serve an answer as a result of an oversight or a misunderstanding that negotiations with the plaintiff’s alleged assignee extended the time to answer.

Plaintiff had no interest in the subject mortgage and underlying note when this case was filed, according to defendants Laroc and Nasta. Mortgage Electronic Registration Systems, Inc. (MERS) as the nominee for the lender and the lender’s successors and assigns, as well as the mortgagee of record, according to the subject mortgage. The note was signed in favor of Fremont Investment & Loan, the lender who provided defendants Laroc and Nasta with mortgage loan money.

The subject mortgage and note allow the lender to transfer the property without the borrower’s agreement. On May 24, 2007, Cynthia Can Patten, a vice-president for MERS acting as a nominee for Fremont Investment & Loan, signed an assignment of the mortgage to convey the subject mortgage, together with the underlying mortgage obligation, from MERS to the plaintiff. “Effective as of March 20, 2007,” according to the assignment.

To the extent that defendants Laroc and Nasta claim that the subject mortgage loan was a high-cost house loan, they have failed to prove that the mortgage loan was a “high-cost home loan” as defined in Banking Law 6-l at the time the loan was made.

Regarding defendants Laroc and Nasta’s assertions that the plaintiff was guilty of coercion and overreaching in fraudulently convincing them to join into the refinance transaction, they have produced no proof that they did not have a meaningful choice. Again, defendants Laroc and Nasta cannot be heard to complain about the repercussions of allowing the mortgage broker to misrepresent their income on their mortgage application to urge the loan to be granted. Furthermore, defendants Laroc and Nasta have failed to show that the appraisal was fraudulent at the time of its issuance or that it was meant for their benefit. They relied on the report’s statements when deciding to participate in the transaction.

The Real Estate Settlement Procedures Act (RESPA) requires mortgage lenders who offer “federally related mortgage loans” and mortgage brokers (to the extent they are not the lender’s exclusive agent) to disclose the costs associated with real estate transactions involving federally-related mortgage loans, to the extent defendants Laroc and Nasta claim they were not given a proper settlement statement in relation to the closing of the mortgage loan. Defendants Laroc and Nasta, on the other hand, have failed to show that the loan in question was a federally linked mortgage loan.

Defendants Laroc and Nasta have failed to show that the mortgage broker fee they paid in conjunction with the transaction was unlawful or fraudulent. They haven’t proven that the plaintiff owes them a responsibility to supervise and oversee the mortgage broker. As a result, defendants Laroc and Nasta have failed to demonstrate how the plaintiff helped the mortgage broker mislead them.

Finally, defendants Laroc and Nasta claim that the plaintiff no longer owns the property since it assigned its mortgage and note to GMAC. Even if there is no formal substitution, if a mortgagee starts a foreclosure action and then assigns its interest in the mortgage, the assignee has the right to continue the case in the name of the original mortgagee. The substantive legitimacy of the claimed assignment of the subject mortgage to GMAC is not contested by defendants Laroc and Nasta. As a result, defendants Laroc and Nasta have failed to prove that the foreclosure and sale decision is invalid.

Defendants Laroc and Nasta’s motion to halt the foreclosure auction is refused on that point. Defendants Laroc and Nasta have failed to show that plaintiff is contractually compelled to comply with any stay or forbearance agreement or to restart the mortgage or that they have offered sufficient monies to satisfy the mortgage debt.