New York is well known for its lengthy foreclosure process. One aspect of the foreclosure process that can take an inordinate amount of time is the Foreclosure Settlement Conferences. These conferences are meant to be an opportunity for homeowners and lenders to attempt to reach some type of settlement, but often they are used by the homeowners as an opportunity to delay the proceeding while remaining in the property for “free.”
During the first Foreclosure Settlement Conference held in an action, a referee sets a schedule for the homeowners to submit a loan modification application, for the lender to review it and advise on missing documents, and for the homeowner to submit the missing documents to the lender. The referee will set the next conference date sometimes as far out as three to four months in the future, with the goal of the lender offering a modification before then. However, what often ensues is the homeowners fail to submit a complete application, and the court again adjourns the conference, giving the borrowers more time to “save their home.” What was once just an oversight for homeowners in submitting documentation has now become a strategy employed by many defendants to use the Foreclosure Settlement Conferences as a means to stall an action.
In CitiMortgage, Inc. v. Aygoren, et al., a foreclosure proceeding in Suffolk County Supreme Court, Adam Leitman Bailey, P.C. successfully avoided this lengthy process by getting the proceeding released from the Foreclosure Settlement Conference during the very first appearance. Despite the fact that the homeowners appeared with counsel, Adam Leitman Bailey, P.C. came in armed with the borrowers’ financials and effectively demonstrated to the referee that, even though the borrowers wanted to modify the loan, their income was insufficient to support any modification on the current outstanding balance due. Over the objections of defense counsel, Adam Leitman Bailey, P.C. argued that, not only was the income unfeasible to support a modification but that it would be a waste of judicial resources to keep the proceeding stalled in conferencing. The court agreed and released the action from conferencing, saving the lender from months of delay and expensive, unrecoverable legal fees that are often incurred during the frequently drawn-out foreclosure conferencing process.
Jackie Halpern Weinstein and Danny Ramrattan of the Foreclosure Group at Adam Leitman Bailey, P.C. won this battle for the lender.
