Monday, August 26, 2013

Foreclosure Requirements After 7/31/13

At the end of last month, the Governor signed into law Bill A5582-2013. This Bill added CPLR 3012-B and amended CPLR 3408. Effectively, this Bill eliminates prior rules with respect to attorneys filing the Attorney Affirmation pursuant to AO/413/11. Specifically, this Bill changes the time period for the requirement from accompanying the Request for Judicial Intervention (RJI) to accompanying the Complaint. As a result, a shadow docket can be eliminated of cases that were commenced, but cannot move to be assigned to a Judge. So, this is a great change in operations for foreclosures in this state. Additionally, it adds precise sanctions for failure at CPLR 3012-B(D) thereby taking out the guesswork for Judges that has plagued the State for the last years.

CPLR 3012-B now reads as follows:CERTIFICATE OF  MERIT  IN  CERTAIN  RESIDENTIAL  FORECLOSURE ACTIONS.  (A)  IN  ANY  RESIDENTIAL  FORECLOSURE ACTION INVOLVING A HOME LOAN, AS SUCH TERM IS DEFINED IN SECTION THIRTEEN HUNDRED  FOUR  OF  THE REAL PROPERTY  ACTIONS AND PROCEEDINGS LAW, IN WHICH THE DEFENDANT IS A RESIDENT OF THE PROPERTY SUBJECT TO FORECLOSURE, THE COMPLAINT SHALL  BEACCOMPANIED  BY  A  CERTIFICATE, EXECUTED BY THE ATTORNEY FOR THE PLAIN-TIFF, CERTIFYING THAT THE ATTORNEY HAS REVIEWED THE FACTS  OF  THE  CASEAND  THAT,  BASED ON CONSULTATION WITH AUTHORIZED REPRESENTATIVES OF THEPLAINTIFF AND THE ATTORNEY'S REVIEW OF  PERTINENT  DOCUMENTS,  INCLUDINGTHE  MORTGAGE,  SECURITY AGREEMENT AND NOTE OR BOND UNDERLYING THE MORT-GAGE EXECUTED BY  THE  RESIDENTIAL  DEFENDANT  AND  ALL  INSTRUMENTS OF ASSIGNMENT,  IF ANY, OR ANY OTHER INSTRUMENT OF INDEBTEDNESS, THERE IS AREASONABLE BASIS FOR THE COMMENCEMENT OF SUCH ACTION AND THAT THE PLAIN-TIFF IS CURRENTLY THE CREDITOR ENTITLED TO  ENFORCE  RIGHTS  UNDER SUCH DOCUMENTS. SUCH CERTIFICATE SHALL ATTACH A COPY OF THE MORTGAGE, SECURI-TY  AGREEMENT  AND  NOTE OR BOND UNDERLYING THE MORTGAGE EXECUTED BY THE RESIDENTIAL DEFENDANT AND ALL INSTRUMENTS OF ASSIGNMENT.(B) WHERE A CERTIFICATE IS REQUIRED PURSUANT TO THIS SECTION, A SINGLECERTIFICATE SHALL BE FILED FOR EACH ACTION EVEN IF MORE THAN ONE DEFEND-ANT HAS BEEN NAMED IN THE COMPLAINT OR IS SUBSEQUENTLY NAMED.(C) THE PROVISIONS OF SUBDIVISION (D) OF RULE  3015  OF  THIS  ARTICLE SHALL  NOT BE APPLICABLE TO A DEFENDANT RESIDENT OF THE PROPERTY SUBJECT TO FORECLOSURE WHO IS NOT REPRESENTED BY AN ATTORNEY.(D) IF A PLAINTIFF WILLFULLY FAILS TO PROVIDE COPIES OF THE PAPERS ANDDOCUMENTS  AS  REQUIRED BY SUBDIVISION (A) OF THIS SECTION AND THE COURTFINDS, UPON THE MOTION OF ANY PARTY OR ON ITS OWN MOTION  ON  NOTICE  TOTHE PARTIES, THAT SUCH PAPERS AND DOCUMENTS OUGHT TO HAVE BEEN PROVIDED,THE  COURT  MAY  DISMISS THE COMPLAINT OR MAKE SUCH FINAL OR CONDITIONALORDER WITH REGARD TO SUCH FAILURE AS IS JUST INCLUDING BUT  NOT  LIMITEDTO  DENIAL  OF  THE  ACCRUAL OF ANY INTEREST, COSTS, ATTORNEYS' FEES ANDOTHER FEES, RELATING TO THE UNDERLYING MORTGAGE DEBT. ANY SUCH DISMISSALSHALL NOT BE ON THE MERITS. 


Amended CPLR 3048 now reads as follows: (a) In any residential foreclosure action involving a home loan assuch term is defined in section thirteen hundred four of the real prop-erty actions and proceedings law, in which the defendant is a residentof the property subject to foreclosure, PLAINTIFF SHALL FILE PROOF OFSERVICE WITHIN TWENTY DAYS OF SUCH SERVICE, HOWEVER SERVICE IS MADE, ANDthe court shall hold a mandatory conference within sixty days after thedate when proof of service UPON SUCH DEFENDANT RESIDENT is filed withthe county clerk, or on such adjourned date as has been agreed to by theparties, for the purpose of holding settlement discussions pertaining tothe relative rights and obligations of the parties under the mortgageloan documents, including, but not limited to determining whether theparties can reach a mutually agreeable resolution to help the defendantavoid losing his or her home, and evaluating the potential for a resol-ution in which payment schedules or amounts may be modified or otherworkout options may be agreed to, and for whatever other purposes thecourt deems appropriate.