Free Breaking News: Chief Judge Unveils Program to Deal With Dramatic Rise in Foreclosures By Mark Fass June 19, 2008
Chief Judge Judith S. Kaye responded today to the dramatic rise in residential foreclosure filings throughout New York by announcing a new statewide program intended to educate homeowners and facilitate early negotiations and settlements.
The Residential Foreclosure Program will start with a trial run this summer in Queens, the epicenter of the state’s foreclosure crisis, and spread to the rest of the state’s courts this fall. The key components of the plot will be notifying parties as soon as practicable of community resources, holding early conferences before a hearing officer to develop a settlement or case management plot and hiring dedicated, specialized court personnel.
“Like so many other problems that affect society, the courts end up dealing with the fallout” from foreclosures, the chief judge said today at a news conference at the offices of Chief Administrative Judge Ann Pfau. “We are here this morning because we believe the court system can be part of the solution.” Chief Judge Kaye was joined by leaders of associations on all sides of the foreclosure process, including Michael P. Smith of the New York Bankers Association; Lynn Armentrout of the Lawyers Foreclosure Intervention Network; and Michael Hickey of the Center for New York City Neighborhoods.
Although Manhattan has had relatively few foreclosures, the rest of the state has mirrored the national epidemic. Over the last 31/2 years, foreclosures have risen by 150 percent throughout the state , with another 40 percent jump expected by the end of this year. The state’s toughest hit regions include southeast Queens, in particular the area surrounding John F.Kennedy International Airport, and Suffolk County.
For example, Queens saw a 70 percent jump in foreclosures to 1,243 in 2007 from 731 in 2006.
The state courts have experienced numerous problems in processing the onslaught of foreclosure filings, chief among them long delays and high default rates. As Judge Pfau repeatedly noted at today’s news conference, the state’s 90 percent default rate in foreclosure cases calls into question the number of homeowners who may not know they are losing their houses.
The Residential Foreclosure Program will be a multi-pronged approach at attempting to better educate homeowners while also facilitating discussions and negotiations that can speed and ease the complex foreclosure process. Homeowners facing foreclosure will first come into contact with the new changes when they receive two notices?one from the plaintiff, a second from the court?describing the early conference program and available community resources.
The nonprofit Center for New York City Neighborhoods will play a lead role in selecting the resources, or service providers, Judge Pfau said. The center’s director, Mr. Hickey, said providers will be selected either at the center’s discretion or via a request-for-proposal process. The center already has working relationships with many community providers, he added. “It’s not like we’re making this system from scratch,” Mr. Hickey said. The court’s notice also will include a “request for early conference” form, which represents a partial accommodation of Governor David Patterson’s proposal that early settlement conferences be held before judges in all residential foreclosure proceedings.
Judge Pfau had testified at legislative hearings last month that it was unrealistic to expect that property owners who have fallen behind on their house payments could afford legal counsel (NYLJ, May 13).Under the new program, only those who have sought counseling, on their own or from the court-provided resources, may schedule the early conferences. “It’s not the best use court resources to be scheduling and calendaring conferences that will never take place,” Judge Pfau said, noting the 90 percent default rate. “We reckon more meaningful conferences will take place when you have a defendant who is really present and has had access to legal and financial counseling.” After the form is returned to the courts, a case manager assigned to the conference part will contact the parties and schedule the conference.Overseen by either a judicial hearing officer or a referee, the conferences will allow the parties to settle the case or, in the alternative, develop a case management plot intended to streamline the proceedings, which at present can stretch out as long as a year and a half.”Early resolution,” Judge Pfau said, “is in everyone’s interest.”
Tags: Foreclosure, counseling, New York, Settlement, program, mortgage, subprime, real estate
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Well, maybe this campaign will be ground-breaking and will help to limit the number of foreclosures. It must be difficult for both sides to come to a mutual agreement, but as a Toronto real estate agent I think that it would be only profitable for loan institutions when they could cut the number of foreclosures by dialogue in the early stages of upcoming difficulties.
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