In 2008, at the height of the financial crisis, foreclosure court conferences were mandated with regard to homeowners who had taken out sub-prime and/or expensive mortgages. When this new requirement for financial institutions went into effect, they were also required to give notice 90 days prior to bringing a foreclosure lawsuit in New York. In 2009, the foreclosure settlement conferences were mandated to all types of foreclosure proceedings brought against homeowners. The foreclosure settlement conference requirements were scheduled to expire in February of 2015. The New York State Legislature, New York State Assembly and New York State Senate, have approved a bill to extend the foreclosure settlement conference requirement until 2020.
Courts Inundated with Foreclosures
The legal system in New York State is having difficulty dealing with the huge number of foreclosure settlement conferences and foreclosure lawsuits. In 2013, there were 100,000 settlement conferences in the courts in New York State. It is expected there will be in excess of 100,000 settlement conferences in 2014.
100,000 Foreclosures Pending
There are approximately 100,000 foreclosure cases pending in New York State. In May of this year, the administrator for the legal system in New York State decided to place more judges at foreclosure settlement conferences. This was in response to complaints from foreclosure lawyers that financial institutions were sending attorneys to the conferences who did not have the authority to make settlements. If the attorneys for the financial institutions cannot make decisions concerning settling the foreclosure cases, the whole purpose of the settlement conferences is defeated. It is anticipated the new judges will be in place and there will be new procedures to follow by the end of July 2014.
