New York’s Office of Court Administration recently announced relief for lenders and homeowners frustrated by high case volume delays affecting mandatory foreclosure settlement conferences in certain courts. Litigants will soon enjoy immediate and direct access to judges at these conferences in Kings, Queens, Nassau and Suffolk counties, the four counties with the highest foreclosure case volumes in the state.
Judges will be available to both parties as needed to quickly address and resolve foreclosure issues. Judicial assignments commenced in June in response to complaints from homeowners’ attorneys that lenders’ counsel sometimes appear at foreclosure conferences without sufficient settlement authority to resolve the disputes.
CPLR § 3408, the rule mandating settlement conferences in residential foreclosure actions, obliges parties to review settlement options at an early stage, and “negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible.” CPLR § 3408(f). Further, Rule 3408 expects lenders’ counsel to be “fully authorized to dispose of the case.” CPLR § 3408(c).
Over 100,000 Rule 3408 conferences were held last year in New York courts. JASA/Legal Services for the Elderly in Queens, Legal Services NYC, and MFY Legal Services recently reported that at 44% of observed conferences, lenders’ attorneys appeared without sufficient settlement authority. The report found that lack of authority could undermine the outcomes and delay the foreclosure. The Office of Court Administration (OCA) hopes that more judicial availability will encourage the parties to proceed diligently and in good faith, making the conferences more effective and valuable to both lenders and homeowners.
If you are a lender contemplating a New York residential mortgage foreclosure action, or are otherwise impacted by mandatory foreclosure settlement compliance, contact Michael Moskowitz or Richard Weltman at Weltman & Moskowitz, LLP, for tailored guidance and advice.
Melissa A. Guseynov, an associate of the firm, contributed to this article.
About Weltman & Moskowitz, LLP, A New York and New Jersey Bankruptcy, Business and Creditors’ Rights Law Firm:
Richard E. Weltman and Michael L. Moskowitz founded Weltman & Moskowitz in 1987 to resolve business, bankruptcy and creditors’ rights challenges, but with a better value proposition. Weltman & Moskowitz serves clients in New York, Long Island and New Jersey.
The firm concentrates on lender’s rights, corporate insolvency, resolution of commercial disputes, loan workouts and modifications, shareholder and partnership contests, business divorce, dissolution, and business and bankruptcy litigation, arbitration, and mediation of all types. The firm also assists with corporation, partnership, and limited liability company counseling and operation, and preparing and negotiating many kinds of secured lending, leasing, equity, buy-sell, consulting, technology, and joint venture agreements. Michael and Richard may be reached at 212.684.7800, 201.794.7500, or via email at mlm@weltmosk.com or rew@weltmosk.com.
