October 18, 2017

New York foreclosure cases have, as part of the litigation process, a procedure known as “Resolution Part” pursuant to CPLR sec. 3408(f) which requires all parties to attend meetings to attempt to resolve the case without further litigation. Although these meetings are often held very early on (with no discovery having been done in many cases), they are necessary, and there are often multiple sessions as additional information or documentation may be required, and/or not all issues are resolved at the first or at any one meeting. In fact, at one of these meetings, the Referee told us that in some cases there had been 12, 16, and up to 21 of these meetings in a single case.

In a recent case which we settled, it took three (3) meetings to finally force the servicer to honor a prior agreement to modify a loan. The prior foreclosure Firm (a known foreclosure mill) withdrew from the case, but never submitted the paperwork as to the approved loan mod to the homeowner before they withdrew. The servicer, through its new Firm which was retained some time after the prior Firm withdrew, attempted to welsh on the prior agreement claiming that the homeowner had not timely submitted the signed paperwork back to the servicer. As a result of our filings and the documented fault of the prior law Firm, the Resolution Part Referee forced the servicer to accept the previously approved loan mod.

In prior years, it was not necessary to have an Answer filed to a foreclosure lawsuit while efforts were made in Resolution Part to settle the case. As such, certain cases went on for years without an Answer being filed and without a default being sought, thus delaying the case from being set for trial. There have been rule changes to CPLR 3408(f) which now require the Referee to advise the homeowner(s), at the first Resolution Part meeting, that they must file an Answer to the foreclosure lawsuit within thirty (30) days, and if this is not done, a default may be entered against the homeowner. This change was in obvious response to the court situation where cases dragged on for years without even an Answer being filed, thus preventing the case from being set for trial and thus not advanced.

SO, for those in New York who are in foreclosure, be aware of this rule change, and make sure that an attorney files the proper Answer to the foreclosure lawsuit timely.

Jeff Barnes, Esq.,