If You Are a New York Homeowner Facing Foreclosure, You May Have Rights to a Court-Mandated Settlement Conference … Even if Your Lender Doesn’t Think So
If you are one of New York’s many homeowners behind in mortgage payments and have been served with a foreclosure complaint, New York law may offer you an important right — to meet with your lender to try to work out a settlement enabling you to keep your home. Unfortunately, some lenders’ foreclosure practices have thwarted the relief the NY law is intended to provide.
To qualify for a foreclosure settlement conference, the property must be:
- For residential use
- Occupied by the owner
- A one-to-four family dwelling or condominium
You are entitled to the settlement conference within 60 days of the date you were served if the foreclosure complaint was filed on or after February 13, 2010. If the foreclosure has been pending longer than that, you may request that the court order a settlement conference even though it is not mandatory.
The settlement conference is administered by the court to help the parties reach a settlement. Possible settlements include the following:
- Working out an extended payment plan
- Modifying the loan to reduce the principal balance owed
- Modifying the loan to reduce the interest rate
- Any combination of the above
However, our civil litigation attorneys know that some lenders try to circumvent the law. In a recent case filed against HSBC, New York’s attorney general alleged that HSBC failed to file required documents in hundreds of cases, thus delaying the mandated settlement conferences. During the delays, interest and fees accrued against the homeowners, making them less likely to qualify for loan modifications by the time the settlement conferences were scheduled. The attorney general is suing to make HSBC responsible for damages and restitution to affected homeowners and is also investigating the foreclosure practices of other large lenders.