Relates to procedure and evidence at mandatory settlement conferences in residential foreclosure actions and requires good faith settlement discussions

BILL NUMBER:A8945A

Title of bill

An act to amend the civil practice law and rules, in relation to mandatory settlement conferences in residential foreclosure actions and requiring good faith settlement discussions in connection with such foreclosure actions

Purpose Or General Idea Of Bill: This bill would require both mortgagor and mortgagee to make good faith efforts to reach a mutually agreeable resolution that at a minimum, follow the guidelines of the United States Department of the Treasury Home Affordable Modification Program.

Summary Of Specific Provisions: This bill would add a good faith stand- ard to be applied to negotiations between parties in a foreclosure action settlement conference, which does not presently exist.

Effects Of Present Law Which This Bill Would Alter: Section 1 (a) of rule 3408 of the Civil Practice Law and Rules was added by Chapter 472 of the Laws of 2008.

Justification: In 2008, the Legislature enacted the New York Responsi- ble Lending Act, which became Chapter 472 of the Laws of 2008. This statute required mandatory settlement conferences for loan modifications in order to encourage resolution of foreclosure ations and keep mortga- gors in their homes. While the settlements have been successful, not- for-profit housing counselors and attorneys have indicated that a stron- ger and clearer standard would benefit the goal of settlement conferences.

Prior Legislative History: This is a new bill.

Fiscal Implications For State And Local Governments: This bill will not have an impact on state finances.

Effective Date: This act shall take effect immediately.