Tuesday, March 23, 2010


From the CLE seminar held at the Nassau County Bar Association, courtesy of Empire Justice Center:

"Mandatory Settlement Conferences

Conferences extended to all (amends CPLR 3408(a)): Effective February 13, 2010,13 the law extends the requirement for courts to hold a mandatory settlement conference to all borrowers with home loans 14 in which the defendant resides in the property (not just those with “high-cost,” “subprime” or “nontraditional” home loans as initially established in the 2008 Act). The conference must be held within 60 days from the date when proof of service is filed with the clerk, or on such adjourned date as agreed to by the parties.

Pending foreclosure actions: In pending foreclosure actions on home loans (that are not “high-cost,” or “subprime,” already subject to a mandatory settlement conference requirement) where the final order of judgment has not been rendered as of effective date of the conferences, the court shall notify the defendant that they have a right to request a settlement conference.

New requirements (adds CPLR 3408(d), (e), (f), (g), and (h)): Though the stated purpose of holding settlement discussions remains the same, 15 a requirement has been added that the parties “shall negotiate in good faith to reach a mutually agreeable resolution, including a loan modification, if possible.” 16 Another new provision prohibits either party from charging the other for any cost, including attorneys’ fees, for participation in the settlement conferences. 17 Plaintiffs are also newly required to file a notice of discontinuance and vacatur of lis pendens within 150 days after a settlement agreement or loan modification is executed. 18

Two additional requirements pertain to the courts. First, the court must “promptly” send a notice to both parties advising them of the time, place and purpose of the conference, and advising them of the documents they should bring. 19 The notice should be in a form prescribed by the Office of Court Administration (OCA), or by the administrative judge of the judicial district (at OCA’s discretion). Second, the court must send either a copy of the request for judicial intervention (RJI) or contact information for the defendant to housing counseling agencies designated by DHCR in the judicial district so that they may inform the homeowner of foreclosure prevention services and options available to them. 20

These provisions also are effective February 13, 2010.

OCA rulemaking and reporting: Within 90 days of the enactment of this legislation, OCA must promulgate rules to ensure the “just and expeditious processing of settlement conferences.” 21 Such rules shall provide those overseeing conferences the necessary authority to make sure the law is followed and the parties negotiate in good faith, including allowing OCA the ability to grant additional authority to courts to sanction egregious behavior. OCA is required to make annual reports (on November 1) to the governor and prescribed members of the legislature regarding the effectiveness of the settlement conferences.22

Other provisions remain the same: The ability of the court to appoint counsel in a case in which a defendant appears at the conference pro se, and the requirement that the plaintiff appear in person or by a representative with authority to settle the case either in person or by phone, remain the same. 23


13 The mandatory settlement conference provision sunsets five years from the effective date.
14 See footnote 5 for definition of “home loan” (RPAPL § 1304).
15 Settlement conference shall be held “for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agree to, and for whatever other purposes the court deems appropriate.” CPLR 3408(a).
16 CPLR 3408(f).
17 CPLR 3408(h).
18 CPLR 3408(g).
19 For plaintiff, such documents should include at least the payment history, an itemization of the cure and payoff amounts, the mortgage and the note; the defendant should be instructed to bring at least proof of income including most recent pay stubs, tax return, and property tax statements. The law also states that “If the plaintiff is not the owner of the mortgage and note, the plaintiff shall provide the name, address and telephone number of the legal owner of the mortgage and note.” CPLR 3408(e). This does not change any requirement already provided under law that the plaintiff be the legal owner and holder of the mortgage and note.
20 CPLR 3408(d).
21 Chapter 507 of the Laws of New York, 2009, sec.10-a(1).
22 Information to be collected by OCA and reported on includes “the number of adjournments, defaults, discontinuances, dismissals, conferences held, and defendants appearing with and without counsel.” Id. at sec.10-a(2).
23 See CPLR 3408"

No comments:

Post a Comment