| Communications Office:
David Bookstaver, Director
Kali Holloway, Deputy Director
Date: June 18, 2008
Hon. Ann Pfau
Chief Judge Kaye Announces Residential Foreclosure Program
NEW YORK – Chief Judge Judith S. Kaye, in response to record level foreclosure filings in the New York State courts, today announced a new court program to reduce the time, expense and potential losses involved in home foreclosures. The Residential Foreclosure Program will establish an early, active court presence in foreclosure cases involving owner-occupied residences to promote greater efficiency in case resolution and better outcomes for both homeowners and lenders.
The new program was created to address dramatic increases in mortgage foreclosure filings throughout New York State. Since January 2005, foreclosure filings have increased 150 percent statewide, and filings are expected to rise at least an additional 40 percent in 2008. The increase in foreclosure filings has disproportionately affected specific counties. Suffolk and Queens, for example, have experienced filing increases of 269 percent and 223 percent, respectively, since January 2005, attributable largely to foreclosures on owner-occupied, one- to four-family residential properties. New York’s complex foreclosure process can be time-consuming and costly for both borrowers and lenders, and approximately 90 percent of foreclosure judgments are obtained on default.
The court system’s new program will help ensure that homeowners are aware of available legal service providers and mortgage counselors who can help them avoid unnecessary foreclosures and reach out-of-court resolutions. The homeowner will receive a special court notice containing information about these service providers whenever a foreclosure action is commenced. The parties will also be given the opportunity to attend an early court conference to explore settlement possibilities. Even if a settlement cannot be reached, the conference will assist the lender and borrower in arriving at a case management plan to streamline subsequent proceedings, promote active case management and avoid unnecessary delays. The court system will assign specially trained court personnel to preside over Foreclosure Conference Parts, with the aid of case managers who will schedule conferences and provide other support.
The Residential Foreclosure Program includes:
“The recent exponential increase in foreclosure filings has far-reaching consequences –displaced families, devastated neighborhoods and losses to the state economy,” said Chief Judge Kaye. “The Residential Foreclosure Program was created to facilitate communication, expedite resolutions and promote positive outcomes for those affected by the residential mortgage foreclosure crisis. The result is a program that may shorten the lives of these cases by up to 15 months – ultimately benefiting not only the parties directly involved, but also the neighborhoods that would otherwise be left destabilized by these vacant properties. The program serves the best interests of all New Yorkers by reducing hardship, cost and neighborhood blight in our hardest hit communities.”
Chief Administrative Judge Ann Pfau noted, “For many of those who must turn to New York’s courts in cases involving mortgage foreclosure, there’s little to no knowledge of available options and resources. The Residential Foreclosure Program allows the courts to proactively bring together both struggling homeowners and mortgage lenders to inform them about alternatives to costly, time-consuming litigation. In the midst of this nationwide foreclosure crisis, New York is taking a critical and decisive step to help foreclosure litigants efficiently resolve their cases and get back on track.”
“This new program and the opportunity for conferences between homeowners and lenders will help avoid unnecessary foreclosures and keep families in their homes and neighborhoods strong,” said New York City Housing Commissioner Shaun Donovan. “I want to commend Chief Judge Judith S. Kaye for her innovation and leadership on this pressing issue. The Mayor, City Council and nonprofit partners have launched the Center for New York City Neighborhoods to provide outreach, education, counseling and legal services around mortgage foreclosure. This new program will add another important resource to help prevent avoidable foreclosures."
The Foreclosure Conference Part will operate initially as a pilot project in Queens before being expanded to other areas of the state. Other features of the Residential Foreclosure Program include:
To view the full report on the new Statewide Residential Mortgage Program online, go to www.nycourts.gov/whatsnew on the Unified Court System website.