In response to the ongoing foreclosure crisis in this country, many states have implemented mediation programs to assist borrowers in finding ways to avoid foreclosure. New York has implemented a program where borrowers attend a face-to-face meeting with their lender at a foreclosure settlement conference. Read on to learn more about how New York’s settlement conference program works and how you can benefit from the process.
(For more articles on New York foreclosure law and assistance for New York homeowners facing foreclosure, visit our New York Foreclosure Law Center.)
A foreclosure prevention settlement conference is a meeting with your lender’s representative. The settlement conference provides an opportunity to work out a deal with your lender before the foreclosure is completed.
At the settlement conference, the parties discuss your financial situation and try to negotiate a way for you to keep the home or give up the property without going through a foreclosure. By working together, the parties are often able to reach an agreement.
Potential outcomes of a settlement conference include:
(To get information about each of these options, see our Alternatives to Foreclosure area.)
In New York, foreclosures are judicial, which means the lender must foreclose through the state court system. The lender initiates the foreclosure by filing a complaint and having it served on the borrower, along with a summons to appear in court. (To learn more about the difference between judicial and nonjudicial foreclosure, and the procedures for each, see Will Your Foreclosure Take Place In or Out of Court?)
To learn about the specific foreclosure laws and procedures in New York, see New York Forclosure Laws and Procedures.
New York law requires the court to hold a mandatory settlement conference within 60 days of the filing of the proof of service with the court clerk.
Homeowners in danger of foreclosure are entitled to participate in a court settlement conference with their lender if the property is:
The court will send a notice to the parties advising them of:
The lender and the borrowers must provide certain documents at the settlement conference.
Documents the Borrowers Must Provide
The documents that the borrowers must provide include, but are not limited to:
Documents the Lender Must Provide
The documents that the lender must provide include, but are not limited to:
At the settlement conference, the court will:
Both the lender and borrower are required to negotiate in good faith to reach a mutually agreeable way to avoid foreclosure. If the borrower attends the conference without an attorney, the court may appoint one to represent the borrower.
The settlement conference requirement will sunset (expire) on February 13, 2020, unless extended by another statute.
Even though participating in a New York foreclosure settlement conference does not guarantee that you can avoid foreclosure, it doesn't hurt to participate. The lender may be more likely to agree to a nonforeclosure solution at a settlement conference than if you approach it outside of the program. Or you might qualify for a loss mitigation option that you hadn’t previously considered.
To read the law governing settlement conferences, go to http://public.leginfo.state.ny.us and click on “Laws of New York.” Then click on “Civil Practice Law & Rules,” “Article 34,” and “Rule 3408.”
For more information on settlement conferences in New York, go to www.nycourts.gov, click on “Topics A to Z” and then “Foreclosure, Program (Residential).”
(To learn about other options for dealing with foreclosure, visit Nolo's Foreclosure section.)