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History
- Committee discharged and committed to rules
- Notice of committee consideration - requested
- Referred to judiciary
- Referred to judiciary
Full text
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Sponsor's memo
BILL NUMBER:S442
Title of bill
An act to amend the judiciary law and the civil practice law and rules, in relation to dismissal of residential mortgage foreclosure actions for repeated failure by plaintiff to appear with authority to negotiate or to negotiate in good faith or meet other deadlines
Summary of specific provisions
Subdivision 2 of the Judiciary law section 212 is amended by adding a new paragraph (s) which provides for the adoption of court rules governing instances where the plaintiff in a residential foreclosure action twice fails to appear at a settlement conference without the authority to execute a settlement with the defendant or to negotiate in good faith or to meet any deadline for the production of documents or evidence. A new subdivision (i) is added to Rule 2408 of the civil Practice Law and Rules which states that upon a second failure by a plaintiff in a residential foreclosure action to appear with the authority to execute a settlement with the defendant or to negotiate in good faith or to meet any deadline for the production of documents or evidence, the defendant shall be deemed to make a motion for an order dismissing such action, unless the defendant waives the making of such motion in writing by advice of counsel. Upon the third such failure by a plaintiff, the court shall grant the defendant's motion except on good cause shown by the plaintiff. The subdivision sets forth three obligations of a plaintiff at a settlement conference: to appear with the authority to execute a settlement with the defendant, to negotiate in good faith, and to meet any deadline for the production of documents or evidence. Repeated failures of the plaintiff to fulfill the three obligations, in any combination, will give rise to the making and granting of the motion.
Read the full memo (726 words)
Justification
The New York State Foreclosure Prevention and Responsible Lending Act of 2008 created a court-based mandatory settlement conference process for all homeowners with sub-prime mortgages facing foreclosure. In November 2009, additional legislation was enacted which expands the mandatory settlement conference process to all homeowners facing foreclosure, requires the parties to bring key documents to the mandatory settlement conference, and obliges both parties to negotiate in good faith to reach a mutually agreeable resolution.
The mandatory settlement conference process was created and expanded with the express goal of reducing foreclosures and enabling more fami- lies to remain in their homes. Unfortunately, all too often the settlement conference process has not lived up to the legislature's intentions. While the settlement conference process was created to provide homeowners a chance to negotiate directly with their lenders and reach a workable solution, numerous reports from homeowners, court personnel, and foreclosure prevention organizations indicate that many lenders frequently fail to comply with the law. All too often, lenders repeatedly send subcontracted attorneys to settlement conferences and foreclosure proceedings who have neither the
preparation nor the authority to negotiate with homeowners. According to a study conducted by the Center for New York City Neighborhoods, of the nearly 800 settlement conferences they studied in 2009 in New York City courts, only 3% resulted in any kind of settlement. The study found that lawyers representing lenders only had a copy of an offer already made by the homeowner to the lender 3% of the time, knew the status of an offer with the lender 6% of the time, and only had a phone number to call someone with authority to settle in 13% of the conferences.
The failure of many lenders to send representatives to settlement conferences and foreclosure proceedings who have the authority to negotiate and execute settlements, as well as the ability to produce documents requested by the court, is an enormous waste of the court's and homeowners' time. Moreover, it undermines the ability of many residents facing foreclosure to negotiate an agreement that would enable them to stay in their homes.
This legislation directs the courts to adopt rules governing foreclosure proceedings that will provide a strong incentive for plaintiffs to appear at settlement conferences with the proper authority, required knowledge and documents, and willingness to negotiate in good faith as required by law.
Fiscal implications to state and local government
None.
Legislative history
2010: S.7798A
Effective date
Immediately; provided, that section two of this act shall take effect ninety days after it shall become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.