New York s Residential Mortgage Foreclosure Process

New York’s Residential Mortgage Foreclosure Process Wednesday, November 16, 2016 Speaker: Tanisha T. Bramwell, Esq. Western New York Law Center ERIE...
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New York’s Residential Mortgage Foreclosure Process Wednesday, November 16, 2016 Speaker: Tanisha T. Bramwell, Esq.

Western New York Law Center

ERIE INSTITUTE OF LAW

Tanisha T. Bramwell

Tanisha focuses her practice on foreclosure prevention and defense at the Western New York Law Center, a non-profit law firm providing legal assistance and representation to low income New Yorkers. Previously, Tanisha represented plaintiffs in mortgage foreclose actions. She earned her Juris Doctor, Magna Cum Laude, from SUNY Buffalo Law School.

New York’s Residential Mortgage Foreclosure Process

1. Pre-foreclosure Conditions Precedent to Commencing a Foreclosure Action 90-Day Notice (NYS Real Property Actions and Proceedings Law (RPAPL) § 1304) • Requires a lender, an assignee, or a mortgage loan servicer to provide a borrower notice at least 90 days before commencing a legal action against property improved by a 1-4 family dwelling. • The notice must have specific language. • The notice must have a list of at least 5 nonprofit housing counseling agencies located near the borrower. Changes to RPAPL § 1304 Effective December 20, 2016 (Amended by Chapter 73 of the Laws of New York 2016) 1. Notice must be sent to “the property address and any other address of record” ( not just the property address) 2. Notice must be in “borrower's native language (or a language in which the borrower is proficient), provided that the language is one of the six most common non-English languages spoken by individuals with limited English proficiency in the state of New York.” Notice to include languge informing borrowers: • • •

They have the right to remain in the home until a court orders them to leave. They remain the legal owner of the property and are responsible for the property until the property is sold. They may call the NY Attorney General’s Homeowner Protection Program (HOPP) consumer hotline.

30-Day Notice (Mortgage Provision) Requires lender to send borrower notice 30 days before commencing legal action against the property.

2. Commencement of Foreclosure Action Lender files: 1

• • • •



Notice of Pendency Summons & Complaint Certificate of Merit ( Residential foreclosure actions filed on or after August 30, 2013) Pursuant to CPLR § 3012-b. “Help for Homeowners” Notice required at the time foreclosure is filed (RPAPL § 1303) Typically warns homeowners about scams. Changes to RPAPL § 1303 Effective December 20, 2016 (Amended by Chapter 73 of the Laws of New York 2016) Informs homeowners of their right to remain in their home until the foreclosure is complete

3. Service, Request for Judicial Intervention, (Attorney Affirmation) Lender files: • Affidavits of Service The lender files an Affidavit of Service (indicates how/ when each defendant was served) • Request for Judicial Intervention (“RJI”) • Attorney Affirmation (Pursuant to Administrative Order of the Chief Administrative Judge of the Courts AO/431/11 that went into effect on November 18, 2010) (This for older files; now replaced by Certificate of Merit)

4. Answers/ Notices of Appearance •



Defendant(s) file answer to the summons and complaint with the court (done within 20 days of the date of receipt, if the summons and complaint were served in person, or within 30 days if they were sent by mail or delivered in another way.) Defendants may, instead of filing an answer, file a Notice of Appearance to be notified of future court actions/ appearances

Note: Pursuant to Chapter 73 of the Laws of New York 2016, borrowers who fail to file an answer within the 20 or 30 day time period, are permitted to file an answer to the complaint within 30 days after they appear at the first scheduled settlement conference.

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5. Settlement Conference RPAPL§ 3408 • •

Applicable to owner-occupied homes Settlement conference required within sixty days after the date proof of service of the foreclosure is filed with the county clerk

Changes to CPLR § 3408 Effective December 20, 2016 (Amended by Chapter 73 of the Laws of New York 2016) • Amends 3408(a) Coverage; 3408(c) Appearance; 3408(e) Documents; 3408(f) Good faith;3408(g) Discontinuance. 3408(a) Coverage: Settlement conferences to include non-retention options such as short sales and deeds-in-lieu of foreclosure. 3408(c) Appearance: the court may allow a representative of the plaintiff or the defendant to attend the settlement conference by phone or by video-conference. 3408(e)Documents: Lenders must bring the following documents to conferences: 1. 2. 3. 4.

Payment history Payoff and reinstatement amounts Copies of the mortgage and note Name, address and phone number of the owner of the mortgage and note, if Plaintiff is not the owner 5. Loan modification application packet and description of loss mitigation options available to the borrower 6. Any other documentation required If lender is evaluating borrower for loan modification programs, in addition to the above documents, the following should be provided 1. The status of the evaluation 2. List of any missing documents 3. Date when evaluation should be complete If lender has denied the application, the following is required: 1. Denial letter giving the data input fields and values used in the evaluation 2. If the denial was based on investor restrictions, evidence such as a pooling and servicing agreement. 3408(e)Documents: Borrowers must bring the following documents to conferences: 1. Information on current tax returns; expenses; property taxes 2. Previously submitted loss mitigation applications 3

3. Benefits information 4. Rental agreements or proof of rental income 3408(f) Good Faith: Good faith standard is measured by the “totality of the circumstances.” Good faith includes but is not limited to the following factors: 1. Compliance with the requirements of this rule and applicable court rules, court orders, and directives by the court or its designee pertaining to the settlement conference process; 2. Compliance with applicable mortgage servicing laws, rules, regulations, investor directives, and loss mitigation standards or options concerning loan modifications, short sales, and deeds in lieu of fore- closure; and 3. Conduct consistent with efforts to reach a mutually agreeable resolution,including but not limited to avoiding unreasonable delay, appearing at the settlement conference with authority to fully dispose of the case, avoiding prosecution of foreclosure proceedings while loss mitigation applications are pending, and providing accurate information to the court and parties. 3408(g) Discontinuance: Plaintiff must file a notice of discontinuance and vacatur of the lis pendens within 90 days after any settlement agreement or loan modification is fully executed. (use to be 150 days)

Changes to CPLR § 3408 Effective December 20, 2016 (Amended by Chapter 73 of the Laws of New York 2016) • Adds 3408(i) Good faith determination; 3408(j) Plaintiff’s failure to negotiate in good faith; 3408(k) Defendant’s failure to negotiate in good faith; 3408(l) Notice to borrowers; 3408(m) late answers; 3408(n) Motions. 3408(i) Good faith determination: •

• •

A referee, judicial hearing officer, or other staff designated by the court to oversee the settlement conference process, may hear and report findings of fact and conclusions, and may make reports and recommendations for relief to the court Either party may file a motion to request a good faith evaluation The mediator may evaluate sua sponte, but with proper notice to all parties

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3408(j) Failure to negotiate in good faith-Plaintiff If Plaintiff fails to negotiate in good faith, the court can: 1. 2. -

toll the accumulation and collection of interest, costs, and fees Where appropriate, the court may also impose one or more of the following: Compel production of any documents Impose a civil penalty payable to the state in an amount not to exceed twentyfive thousand dollars; award actual damages, fees, including attorney fees and expenses to the defendant ; or Award any other relief that the court deems just and proper.

3408(k) Failure to negotiate in good faith-Defendant If borrower/homeowner fails to negotiate in good faith, the case will be removed from the settlement conference calendar 3408(l) Notice to Borrowers (l) At the first settlement conference, if an answer or pre-answer motion to dismiss is not filed, the court shall: 1. advise the defendant of the requirement to answer the complaint; 2. explain what is required to answer a complaint in court; 3. advise that if an answer is not interposed the ability to contest the foreclosure action and assert defenses may be lost; and provide information about available resources for foreclosure prevention assistance. 4. court shall also provide a copy of the Consumer Bill of Rights* *Pursaunt to RPAPL § 1303 Effective December 20, 2016 (Amended by Chapter 73 of the Laws of New York 2016), “the department of financial services shall publish a Consumer Bill Of Rights, in consultation with all stakeholders, which shall detail the rights and responsibilities of the plaintiff and defendant in a foreclosure proceeding. Such Bill of Rights shall be updated on an annual basis and as appropriate.” 3408(m) late answer: borrowers who fail to file an answer within the 20 or 30 day time period, are permitted to file an answer to the complaint within 30 days after they appear at the first scheduled settlement conference.

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3408(n) Motions: Motions submitted by the plaintiff or defendant shall be held in abeyance while the settlement conference process is ongoing, except for motions concerning compliance with this rule and its implementing rules.

6. Motion for Order of Reference/ Motion for Summary Judgment If an answer was not filed, lender files a motion for Order of Reference, asking the judge to appoint a referee to add up the total amount owed to the lender according to the terms of the mortgage, including principal, interest, late charges, and foreclosure fees and costs If an answer was filed, lender files a motion for Summary Judgment requesting that the judge strikes the answer, and appoints a referee. The defendant may file opposition to the lender’s motion for summary judgment

7. Motion for Judgment of Foreclosure & Sale (JFS). After the appointed referee submits his/her report with the total amount owed, the lender files a motion for Judgment of Foreclosure and Sale Chapter 73 amends RPAPL § 1351 requiring that the judgment shall direct that the subject property be sold within 90 days of the date of the judgment.

8. Sale After the judge signs the JFS, lender publishes notice of the auction in a newspaper before the auction date, and then schedules an auction Chapter 73 amends RPAPL § 1353 to require that the purchaser place the property on the market for sale within 180 days, or if repairs are being made, within 90 days from the date the repairs are completed, whichever comes first. (If the purchaser is the plaintiff from the foreclosure action)

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90-DAY NOTICE "YOU [COULD LOSE YOUR HOME] MAY BE AT RISK OF FORECLOSURE. PLEASE READ THE FOLLOWING NOTICE CAREFULLY" "As of ___, your home loan is ___ days and dollars in default. Under New York State Law, we are required to send you this notice to inform you that you are at risk of losing your home. [You can cure this default by making the payment of _____ dollars by ____.] [If you are experiencing financial difficulty, you should know that there are several options available to you that may help you keep your home.] Attached to this notice is a list of government approved housing counseling agencies in your area which provide free [or very low-cost] counseling. [You should consider contacting one of these agencies immediately. These agencies specialize in helping homeowners who are facing financial difficulty. Housing counselors can help you assess your financial condition and work with us to explore the possibility of modifying your loan, establishing an easier payment plan for you, or even working out a period of loan forbearance.] You can also call the NYS Office of the Attorney General's Homeowner Protection Program (HOPP) toll-free consumer hotline to be connected to free housing counseling services in your area at 1-855-HOME-456 (1-855-466-3456), or visit their website at http://www.aghomehelp.com/. A statewide listing by county is also available at http://www.dfs.ny.gov/consumer/mortg nys np counseling agencies.htm. Qualified free help is available; watch out for companies or people who charge a fee for these services. Housing counselors from New York-based agencies listed on the website above are trained to help homeowners who are having problems making their mortgage payments and can help you find the best option for your situation. If you wish, you may also contact us directly at __________ and ask to discuss possible options. While we cannot assure that a mutually agreeable resolution is possible, we encourage you to take immediate steps to try to achieve a resolution. The longer you wait, the fewer options you may have. If [this matter is not resolved] you have not taken any actions to resolve this matter within 90 days from the date this notice was mailed, we may commence legal action against you (or sooner if you cease to live in the dwelling as your primary residence.) If you need further information, please call the New York State Department of Financial Services' toll-free helpline at (show number) or visit the Department's website at (show web address)["]. IMPORTANT: You have the right to remain in your home until you receive a court order telling you to leave the property. If a foreclosure action is filed against you in court, you still have the right to remain in the home until a court orders you to leave. You legally remain the owner of and are responsible for the property until the property is sold by you or by order of the court at the conclusion of any foreclosure proceedings. This notice is not an eviction notice, and a foreclosure action has not yet been commenced against you.

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HELP FOR HOMEOWNERS/ COLORED PAPER NOTICE Help for Homeowners in Foreclosure New York State Law requires that we send you this notice about the foreclosure process. Please read it carefully. Summons and Complaint You are in danger of losing your home. If you fail to respond to the summons and complaint in this foreclosure action, you may lose your home. Please read the summons and complaint carefully. You should immediately contact an attorney or your local legal aid office to obtain advice on how to protect yourself. Sources of Information and Assistance The State encourages you to become informed about your options in foreclosure. In addition to seeking assistance from an attorney or legal aid office, there are government agencies and non-profit organizations that you may contact for information about possible options, including trying to work with your lender during this process. To locate an entity near you, you may call the toll-free helpline maintained by the New York State Department of Financial Services at (enter number) or visit the Department's website at (enter web address). Rights and Obligations YOU ARE NOT REQUIRED TO LEAVE YOUR HOME AT THIS TIME. You have the right to stay in your home during the foreclosure process. You are not required to leave your home unless and until your property is sold at auction pursuant to a judgment of foreclosure and sale. Regardless of whether you choose to remain in your home, YOU ARE REQUIRED TO TAKE CARE OF YOUR PROPERTY and pay property taxes in accordance with state and local law. Foreclosure rescue scams Be careful of people who approach you with offers to "save" your home. There are individuals who watch for notices of foreclosure actions in order to unfairly profit from a homeowner's distress. You should be extremely careful about any such promises and any suggestions that you pay them a fee or sign over your deed. State law requires anyone offering such services for profit to enter into a contract which fully describes the services they will perform and fees they will charge, and which prohibits them from taking any money from you until they have completed all such promised services.

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CERTIFICATE OF MERIT SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ___________________________ Index No.: Plaintiff( s),

CERTIFICATE OF MERIT PURSUANT TO CPLR 3012-b

v. Mortgaged Premise Address: Defendant( s).

1.

I am an attorney at law duly licensed to practice in the State ofNew York, and am affiliated with the law firm of attorney for plaintiff in this action. --------------------------------------------------

2.

This residential foreclosure action involves a home loan, as such term is defined in Real Property Actions and Proceedings Law §1304. Upon information and belief, defendant ------------------------------- is a resident of the property subject to foreclosure.

3.

I have reviewed the facts of this case and reviewed pertinent documents, including the mortgage, security agreement and note or bond underlying the mortgage executed by defendant, all instruments of assignment (if any), and all other instruments of indebtedness including any modification, extension, and consolidation.

4.

I have consulted about the facts of this case with the following representatives of plaintiff: Name

Title _______________________________ ________________________________

5.

Upon this review and consultation, to the best of my knowledge, information, and belief, I certify that there is a reasonable basis for the commencement of this action, and that plaintiff is the creditor entitled to enforce rights under these documents.

6.

Listed in Exhibit A and attached hereto are copies of the following documents not otherwise included as attachments to the summons and complaint: the mortgage, security agreement and note or bond underlying the mortgage executed by the defendant; all instruments of assignment (if any); and any other instrument of indebtedness, including any modification, extension, and consolidation. (Check box if no documents are attached in Exhibit A: D.) (8/29/20 13)

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ATTORNEY AFFIRMATION SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF Plaintiff, AFFIRMATION v. Index No.: Defendant(s) Mortgaged Premises: N.B.: During and after August 2010, num erous and widespread insufficiencies in foreclosure filings in various courts around the nation were reported by m ajor m ortgage lenders and other authorities, including failure to review docum ents and files to establish standing and other foreclosure requisites; filing of notarized affidavits which falsely attest to such review and to other critical facts in the foreclosure process; and “robosignature” of docum ents. *** [

], Esq., pursuant to CPLR §2106 and under the penalties of perjury, affirms as

follows:

7.

I am an attorney at law duly licensed to practice in the state of New York and am affiliated with the Law Firm of , the attorneys of record for Plaintiff in the above-captioned mortgage foreclosure action. As such, I am fully aware of the underlying action, as well as the proceedings had herein.

8.

On [date], I communicated with the following representative or representatives of of Plaintiff, who informed me that he/she/they (a) personally reviewed plaintiff’s documents and records relating to this case for factual accuracy; and (b) confirmed the factual accuracy of the allegations set forth in the Complaint and any supporting affidavits or affirmations filed with the Court, as well as the accuracy of the notarizations contained in the supporting documents filed therewith. Name

Title

9.

Based upon my communication with [person/s specified in ¶2], as well as upon my own inspection and other reasonable inquiry under the circumstances, I affirm that, to the best of my knowledge, information, and belief, the Summons, Complaint, and other papers filed or submitted to the Court in this matter contain no false statements of fact or law. I understand my continuing obligation to amend this Affirmation in light of newly discovered material facts following its filing.

10.

I am aware of my obligations under New York Rules of Professional Conduct (22 NYCRR Part 1200) and 22 NYCRR Part 130.

DATED: N.B.: Counsel m ay augm ent this affirm ation to provide explanatory details, and m ay file supplem ental affirm ations or affidavits for the sam e purpose. [Revised 11/18/10

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