The NYS Court Administration has issued an Administrative Order (AO 157/20) which lifts the general stay on residential foreclosures as of today, 7/27/20. It sets forth new protocols for pending cases while expanding on previously issued protocols for commencing cases. While AO 157/20 provides more details than previously issued Administrative Orders, we will be seeking additional clarity on a few issues.
In short, in accordance with the Executive Orders easing restrictions in NYS, the court is permitting residential foreclosures to proceed (with additional provisions to follow for auctions), the timeframe for advancement of each action to be controlled by the Court with the requirement that all cases be conferenced before any other activity is undertaken:
- “prior to conducting any further proceedings”, the court must initiate a status or settlement conference (including a CPLR 3408 conference where applicable)
- a failure to appear at a conference will result in a rescheduling of the conference before permitting the furtherance of the action;
- following the conference, the court may direct further briefing of motions as needed and issue decisions on motions (
- no auction shall be rescheduled to occur prior to October 15, 2020;
- the court may entertain “other” foreclosure applications, and, where necessary, conduct hearings, inclusive of CPLR 3408(f) good-faith hearings
- All foreclosure proceedings, shall be conducted remotely to the fullest extent possible
- In accordance with the relevant Executive Orders, all commercial foreclosure for non-payment remain stayed through 8/19/20 where the borrowers are eligible for unemployment insurance or federal/state benefits or are otherwise facing financial hardship due to COVID-19
The specific reference to potential CPLR 3408(f) good faith hearings is of import as it at least implies the court’s focus on the parties pursuing loss mitigation resolutions. It is likely intended to ensure that lenders and servicers have provided any and all relief required by law/regulation to borrowers, as well as to “encourage” plaintiffs to make every effort to pursue a loss mitigation resolution in light of the economic toll COVID-19 has exacted on borrowers and the state’s overall fear that a tidal wave of foreclosures will soon be filed. These are the same concerns previously raised when assessing the application of Banking Law 9-x and explaining the need for affidavits to demonstrate compliance with same.
Additional information will be provided as same becomes available. For any questions, please contact Deborah Gallo, Director of Operations, at [email protected]