The State of New York has a law which states in all foreclosure cases regarding residential homes that have less than 5 families in them and serves as the principal place of residence of the borrower a “settlement conference” is required to be held. At the settlement conference there will be court attorney referee or a judge which presides over the conference. The specific purpose of the conference is to determine whether the homeowner is qualified to obtain a modification of the mortgage, or is there another way the homeowners can save their home from being sold in a foreclosure sale.

At the foreclosure settlement conference a schedule is set up whereby the homeowner has to comply with the mortgage modification application process. This includes submitting an application in a form provided by the lender, following up to provide documentation of financial circumstances and credit worthiness of the homeowner. In circumstances where the homeowner qualifies for the modification of the mortgage there will usually be a period of 3 or 6 months regarding trial payments. The borrower/homeowner must make these trial payments in a timely manner.

Failing to Qualify for a Mortgage Modification

In cases where the homeowner fails to qualify to obtain a mortgage modification, the court attorney referee or judge will issue an order releasing the case to a trial part for further litigation action regarding the foreclosure. Usually after the case is released to a trial part the attorneys for the financial institution will bring a motion for summary judgment against the homeowner. In many situations this amounts to a trial on paper whereby the financial institution’s attorneys provide documentation of the homeowner’s default in making payments on the mortgage. The financial institution’s attorneys will request that a special referee be appointed to compute damages as to how much the homeowner owes to the financial institution and to eventually sell the property at a foreclosure auction sale. If the homeowner is represented by an attorney, the attorney for the homeowner will submit opposition papers to this application by the financial institution for summary judgment foreclosure and sale. If the homeowner’s attorney has included counterclaims or affirmative defenses in the foreclosure answer, the attorney at this time can cross move to dismiss the case based on the counterclaims or affirmative defenses.

In cases where a homeowner and their attorney has been successful in opposing the summary judgment motion, the Judge handling the case will eventually schedule the case for a trial.

The law office of Schlissel DeCorpo have been defending homeowners regarding mortgage issues for more than three decades. They can be reached at 516-561-6645, 718-350-2802, 631-319-8262 and 914-998-0080 or emailed at Elliot@sdnylaw.com.