Relates to requiring certificates of merit in certain residential foreclosure actions

BILL NUMBER:S7571

Title of bill

An act to amend the civil practice law and rules, in relation to residential foreclosure actions

This is one in a series of measures being introduced at the request of the Chief Administrative Judge upon the recommendation of her Advisory Committee on Civil Practice.

This measure would add a new section 3012-b to the CPLR in relation to residential foreclosure actions. This new section would create a procedure whereby the plaintiff lender's attorney must take certain steps to ascertain that his or her client has standing to maintain the action. Specifically, before commencing such an action, he or she must be assured that the plaintiff he or she represents holds the instrument of indebtedness in the action. To evidence that the plaintiff s attorney has received such assurance, the complaint he or she files in the action must be accompanied by a certificate, executed by the plaintiff's attorney, declaring that the attorney has reviewed the merits of the action and that, based upon consultation with authorized representatives of the plaintiff or the attorney's review of pertinent documents, the attorney has concluded on the basis of that consultation or review that there is a reasonable basis for commencement of the action. Also, the plaintiff's attorney must attach to the complaint copies of the relevant instruments of indebtedness and any instruments of assignment. This measure would also amend rule 3408 of the CPLR to require a plaintiff to file proof of service within 20 days of service. This amendment will supply the necessary ingredient to ensure participation by the parties in the mandatory foreclose conference with the court.

We believe that, in addition to helping the bar by clarifying in statute the plaintiff attorney's obligation to the court in a residential foreclosure action, this measure is an appropriate public policy response to the crisis in foreclosure cases. Statutory reform is needed to ensure the integrity of the mortgage foreclosure process and eliminate the cases brought without standing or merit. This measure seeks to prevent completely the problem of "shadow dockets" in residential foreclosure actions, a problem unforeseen at the time the recent affirmations rule was promulgated by administrative order. Under this measure, the trial court would have reasonable assurance that all of the instruments of indebtedness underpinning these actions, including any UCC Article 9 document evidencing a security interest in the note, and all instruments of assignment, if any, are in place at the commencement of the action.

This measure, which would have no fiscal impact on the State, would take effect immediately.

Legislative history

None. New proposal.