New York Real Estate Lawyer Blog

As the fiscal crisis for government deepens, local leaders are increasingly pressed to re-tool. For years, consolidation of governmental services has been a complex labyrinth of regulation understood by few. New York State Attorney General, Andrew M. Cuomo believes that one way to improve the services and reduce the tax burden, is to remove and consolidate various layers of government-- to reduce the tax bills for everyday tax payers who often pay county and town taxes, village taxes, school taxes and taxes for special districts, including water, sewer, and utilities.

Given the current fiscal crisis New York State faces, with declining revenue (taxes) and increasing needs (costs of services), how is the local municipality going to effectively provide the services without increasing taxes or reorganizing governmental entities to efficiently provide the same services.

Just as private businesses re-organize in this global economy, the municipal market place might need re-structuring if we are to retain our middle class, our businesses, and our home rule. Think of the duplicity (redundancy and otherwise) in services provided by an estimated 10,521 overlapping governmental units, sub-divisions, etc. Would private industry permit the same wasteful bureaucracies that exist in local communities.

Under the current law, the consolidation and re-organization solution that can be executed by private industry is hampered by inconsistent, often nonsensical legal barriers, and complexities that make operational reform virtually impossible.

The New York State Attorney General proposed legislation that streamlines existing processes, eliminates inane inconsistencies, and strikes from the law offensive anachronisms such as requiring property ownership in order to vote in a special town election on a proposition to consolidate water districts.

The antiquated system (understood by almost no one) permits New York State real property owners the "privilege" of the highest local tax burden in the country, dwarfing other states, and far exceeding the national average. The theory, eliminate governments by consolidating services, saving millions of dollars.

The newly proposed legislation empowers governments across New York State to study, and then streamline, the complex rules and regulations surrounding the reorganization process.

The impact could be significant, but will local governments and their tax payers have the stamina to address the problem? Read more here.

It's not often that our New York City judiciary goes out of its way to investigate, report and do the right thing. But, that's what the Kings County, Supreme Court, (LAURA L. JACOBSON, J) just did in a mortgage foreclosure matter that crossed her desk.

After noting that the foreclosure papers were served on a "live in" nurse, the Judge took the unprecedented action of requiring the Plaintiff (Argent Mortgage) to provide proof that they were entitled to foreclosure. Even though the Debtor had not responded to the court action, she ordered the mortgage company to supply copies of the loan documents used to secure the mortgage; she required an actual loan officer to appear at a hearing and supply evidence and testimony as to why the Mortgage Company would underwrite a loan in the amount of $315,000, even though there was evidence that the borrower (a taxi driver) earned $69,900 per year, and showed total debts of $91,807, against assets of only $58,119.30. In other words, there was no chance that the Mortgage would be re-paid, and the borrower made no payments toward the Mortgage.

Incensed by the clear fraud, the Judge ordered that the Bank pay for a Special Referee and a Guardian Ad Litem to investigate the situation. It didn't get any better for the bank. In denying the referral to a Referee and foreclosure she said,

The Courts have a responsibility to society as a whole to not allow the perpetuation of a fraud. If this Court grants the application of the plaintiff, it will be giving the imprimatur of approval to a scenario as fraught with fraud as any of the worst Ponzi schemes. . . . .

Perhaps if more of the people charged with overseeing our financial institutions had focused on the improprieties being performed in the financial arenas, our economy might not have imploded as ferociously as it did.

In this matter, plaintiff as the mortgagee was initially in a position to ascertain the credit status of defendant Mentesana.FN3Plaintiff abrogated that responsibility. Defendant Mentesana acknowledged his part in the fraudulent transaction in which several people appear to have participated. Accordingly, I am not only denying the relief sought, I am referring this matter to the Office of the District Attorney; to the Attorney General's office, Fraud Division and to the Banking Department, Criminal Investigation Bureau.

Bottom Line-- Thank you Madam Justice Jacobson for taking a stand (however small) to assign the blame where it is due. . . . Make your own conclusions, but why should any bank making these "type" of loans be entitled to take taxpayer dollars to "bail them out."

May the Brooklyn District Attorneys' office secure the appropriate resolutions.

If you would like to read the entire decision, click Download file here.