This bill has been amended

Bill S1478-2013

Relates to presumption of dismissal of residential mortgage foreclosure actions for repeated plaintiff non-appearance or failure to meet readiness deadlines

Relates to presumption of dismissal of residential mortgage foreclosure actions for repeated plaintiff non-appearance or failure to meet readiness deadlines.

Details

Actions

  • Jan 8, 2014: REFERRED TO JUDICIARY
  • Jan 9, 2013: REFERRED TO JUDICIARY

Memo

BILL NUMBER:S1478

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.

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 families 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 2011-2012: S442

EFFECTIVE DATE: Immediately; provided, that section two of this act shall take effect ninety days after it shall become a law.


Text

STATE OF NEW YORK ________________________________________________________________________ 1478 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sens. KRUEGER, HOYLMAN, MONTGOMERY -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary 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 negoti- ate or to negotiate in good faith or meet other deadlines THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 2 of section 212 of the judiciary law is amended by adding a new paragraph (s) to read as follows: (S) ADOPT RULES PROVIDING FOR CONSIDERATION OF AND WAIVER OF MOTIONS TO DISMISS PURSUANT TO SUBDIVISION (I) OF RULE THREE THOUSAND FOUR HUNDRED EIGHT OF THE CIVIL PRACTICE LAW AND RULES, WHERE THE PLAINTIFF IN A RESIDENTIAL FORECLOSURE ACTION PURSUANT TO SECTION THIRTEEN HUNDRED FOUR OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW TWICE FAILS IN SUCH AN ACTION TO MAKE AN APPEARANCE WITH AUTHORITY TO NEGOTIATE AND EXECUTE A SETTLEMENT OR TO NEGOTIATE IN GOOD FAITH OR TO MEET ANY DEAD- LINE FOR THE PRODUCTION OF DOCUMENTS OR OTHER EVIDENCE REQUIRED BY LAW, BY COURT RULE, BY THE COURT OR BY STIPULATION. S 2. Rule 3408 of the civil practice law and rules is amended by adding a new subdivision (i) to read as follows: (I) WHERE A PLAINTIFF IN AN ACTION SUBJECT TO THIS SECTION TWICE FAILS IN A SETTLEMENT CONFERENCE TO MAKE AN APPEARANCE WITH AUTHORITY TO NEGO- TIATE AND EXECUTE A SETTLEMENT OR TO NEGOTIATE IN GOOD FAITH OR TO MEET ANY DEADLINE FOR THE PRODUCTION OF DOCUMENTS OR OTHER EVIDENCE REQUIRED BY LAW, BY COURT RULE, BY THE COURT OR BY STIPULATION, UPON THE SECOND SUCH FAILURE THE DEFENDANT SHALL BE DEEMED TO MAKE A MOTION FOR AN ORDER DISMISSING SUCH ACTION, WITHOUT PREJUDICE, UNLESS THE DEFENDANT SHALL WAIVE THE MAKING OF SUCH MOTION ON ADVICE OF COUNSEL BY SIGNED WRITING
FILED WITH THE COURT. THE COURT SHALL RESERVE DECISION ON SUCH MOTION AND UPON THE THIRD SUCH FAILURE BY THE PLAINTIFF IN SUCH ACTION, THE COURT SHALL GRANT SUCH MOTION, EXCEPT ON GOOD CAUSE SHOWN BY THE PLAIN- TIFF. S 3. This act shall take effect immediately; provided, however, that section two of this act shall take effect ninety days after this act shall have become a law.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Discuss!

blog comments powered by Disqus