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Westchester County and Putnam County just became more favorable places to have a Foreclosure Settlement Conference for non-performing note investors in lieu of a new unwritten rule of the Part.

Previously, if a borrower failed to appear at the first scheduled settlement conference, which is mandated by CPLR §3408, the appearing attorney for the noteholder would be unsuccessful at having the matter released from the foreclosure settlement conference part as the policy was not to default non-appearing borrowers the “first time on.” Instead, attorneys for individuals and large institutions that own non-performing notes were required to re-notice the borrower of the next available conference date, which traditionally was not scheduled for two-three months later due to heavy volume.

Now, the time in the conference stage, especially for non-appearing borrowers has been dramatically as there is no longer a re-notice requirement for first time “no shows”.  Because the conference lag time has been cut down and foreclosure actions are able to proceed much more quickly, Westchester and Putnam County have spurred even greater interest from NPN investors.

Should you have any questions on NPN’s in these Counties specifically or any foreclosure matter in NY/NJ please follow the link below to contact me directly.

Written by: Michael Derosa, Esq.

Albeit a generally unpredictable process with varying timelines depending on title, service, and collateral issues etc… When the process aligns well, a foreclosure action in New York can be completed from Summons and Complaint to Judgment in approximately 6 months. Most recently, I represented a Lender where we filed a Complaint and Notice of Pendency on February 5, 2013. The matter proceeded through the foreclosure conference part with only one conference before being released. Thereafter, an Order of Reference was granted and the Referee’s Oath and Report was sent to the Referee within that week. Finally, the JFS was granted shortly thereafter on August 6, 2013 (Only 182 days of an open file).

Generally speaking, the ability to complete a foreclosure with such a quick turnaround is not the norm; however, it is my position that this should be the norm in certain counties. All things considered, attorney delay should not cause a file to reach the shadow dockets of various counties because an attorney loses a file in the shuffle.

Furthermore, failure to do the necessary due diligence on a file before it is put into suit also facilitates timelines of multiple years before receiving the opportunity to have judgment granted or what is becoming more common a “restart.”  In the past and even so today, many firms are of the position that they should proceed without doing a strong initial review of the collateral file to ensure that the action is iron clad. Because of this “rush to judgment” attitude, where the firm expects the court to overlook infirmities in papers, many firms have caused significant prejudice to their clients and promoted a large amount of the backlog that we see today.

Timeline For Above Mentioned File:
Index No. 816/2013 (Dutchess County)
Summons and Complaint – February 5, 2013
RJI Filed –  February 22, 2013
1st Conference – April 26, 2013
Order of Reference Granted –  June 5, 2013
Oath and Report Provided – June 25, 2013
JFS Granted – August 6, 2013
Sale Date Scheduled – October 17, 2013

Written By: Michael Derosa

As was discussed in depth in a Client Memo sent earlier this year, the new Expedited Foreclosure Process took effect in New Jersey on April 1, 2013. This process, which permits Plaintiffs in foreclosure actions to proceed summarily, was expected to dramatically cut foreclosure timelines for vacant and abandoned properties. While the process has only been available for just over six months, we received our first set of signed expedited judgments and can now more accurately evaluate the process and its shorter time-frame. (For a more detailed discussion of the process, its prerequisites and benefits, please read our client memo.)

In general, it appears that an easy expedited action can be brought from complaint to judgment within a three to four month timeframe. The following would be a nearly ideal expedited timeline:

Day 1 – File Complaint
Day 3 – File Order to Show Cause
Day 24 – Receive signed Order to Show Cause with a Day 70 Return Date
Day 38 – Complete Service of Process as directed by the Order to Show Cause
Day 70 – Judge marks the Order to Show Cause fully submitted
Day 90 – Receive signed Order and Writ of Execution

In most situations, a four to five month time frame is far more likely. There are numerous aspects of a matter that can lead to a longer time frame. Most notably, we have experienced the following two recurring issues in the majority of our expedited cases:

(1)   Delays in completing Service of Process. Within the Order to Show Cause, the Judge enforces strict service of process requirements. Generally, Plaintiff is given approximately twenty (20) days to complete service upon all defendants. This is an incredibly short time frame considering that the mortgagors do not occupy the mortgaged premises and many times will need to be served via publication. In situations where the homeowner is deceased or missing altogether, use of the Expedited Process can actually slow the action down dramatically.

(2)   Communication Issues with the Court. Not only is this process new to the attorneys commencing expedited actions, it is new to the court and the Office of Foreclosure. The primary obstacle we have encountered is receiving the actual signed Order to Show Cause from the court. This is especially troublesome considering the short service of process deadline. A copy is not sent to Plaintiff’s counsel upon its submission to JEFIS and in many situations we have had to check JEFIS daily on all of our expedited matters.

Overall, it appears that the Expedited Process is an efficient foreclosure mechanism when used properly in the right situation. That being said, despite its speed, it is not universally an ideal option where the property is vacant and abandoned.

Written By: Adam J. Friedman, Esq.

Newly enacted Consumer Financial Protection Bureau (CFPB) rules designed to protect defaulted homeowners will become effective today, January 10, 2014. Click here to download a client memorandumexplaining these changes in further detail.

These regulations only apply to servicers, which are defined as people responsible for the servicing of a federally related mortgage loan (including a person who makes or holds such loans if such person also services the loan). These regulations do not include “small servicers” who are defined as lenders that service 5,000 or fewer mortgage loans and service only mortgage loans that they or an affiliate originated or own. This differentiation aims to reward the small servicers who typically have strong consumer service safeguards already built in their lending practices.

The above referenced memorandum will answer the following questions:
• How will the newly imposed loss mitigation rules impact my ability to commence any action?
• How quickly must I respond to a homeowner following receipt of a complete/incomplete loss mitigation application?
• How long does a homeowner have to appeal a loss mitigation denial? Does this place a stay upon my foreclosure action?
• How long does the homeowner have to accept a loss mitigation offer?
• How will the newly imposed “Early Intervention” Requirements impact my business?
• How will the newly imposed “Continuity of Contact” Requirements impact my business?

Please feel free to contact us directly with any further questions.

–Adam J. Friedman, Esq.