Out From The Shadow Docket

Out From The Shadow Docket

The Courts have proposed a rule that would enable them to force dormant foreclosure actions into settlement conferences.  The rule is an attempt to thwart the lenders from merely filing a foreclosure action and then doing nothing with the case.  The lenders are able to accomplish this file and wait tactic because additional documents, other than the Summons and Complaint, need to be filed in order to have a judge assigned to the case and a conference scheduled. 

A case filed in New York Supreme Court is subject to the Individual Assignment System wherein, a judge is assigned to a case only after a Request For Judicial Intervention is filed.  Only then will the case move forward in the litigation process and a judge will be assigned to the case.  The plaintiff’s attorney in a foreclosure action needs to also file proof of service and an attorney affirmation attesting to the accuracy of the documents filed.  The NYLJ classifies this as a “legal limbo” for homeowners who are served with the foreclosure documents and then never have their cases progress. 

The proposal by the Courts would allow the county clerk to place filed foreclosure actions on a special foreclosure calender, dubbed a “delinquency calender”.  At that point motions could be filed and conferences scheduled, including settlement conferences.  The current delays may be a welcomed reprieve for homeowners, but these continued delays are detrimentally effecting others.  Particularly cooperatives and condominiums who rely on the maintenance and common charges from the owners of the apartments to pay the buildings taxes and utilities.  The coop and condo owners who have their mortgages foreclosed upon, generally and simultaneously stop paying their maintenance and common charges.  Sometimes these charges enter the hundreds of thousands of dollars in unpaid balances. This is just one example of the collateral damage the lenders cause by delaying the prosecution of their foreclosure actions.

By | 2012-05-15T15:19:05+00:00 May 15th, 2012|