Senate Bill S3324

                                 BILL NUMBER:  S3324

 TITLE OF BILL :  An act to amend the judiciary law and the civil
practice law and rules, in relation to dismissal of residential
mortgage foreclosure actions for repeated failure by plaintiff to
appear with authority to negotiate or to negotiate in good faith or
meet other deadlines

 SUMMARY OF SPECIFIC PROVISIONS :

Subdivision 2 of the Judiciary law section 212 is amended by adding a
new paragraph (t) which provides for the adoption of court rules
governing instances whore the plaintiff in a residential foreclosure
action twice fails to appear at a settlement conference without the
authority to execute a settlement with the defendant or to negotiate
in good faith or to meet any deadline for the production of documents
or evidence. A new subdivision (o) is added to Rule 3408 of the civil
Practice Law and Rules which states that upon a second failure by a
plaintiff in a residential foreclosure action to appear with the
authority to execute a settlement with the defendant or to negotiate
in good faith or to meet any deadline for the production of documents
or evidence, the defendant shall be deemed to make a motion for an
order dismissing such action, unless the defendant waives the making
of such motion in writing by advice of counsel. Upon the third such
failure by a plaintiff, the court shall grant the defendant's motion
except on good cause shown by the plaintiff. The subdivision sets
              

forth three obligations of a plaintiff at a settlement conference: to
appear with the authority to execute a settlement with the defendant,
to negotiate in go od faith, and to meet any deadline for the
production of documents or evidence. Repeated failures of the
plaintiff to fulfill the three obligations, in any combination, will
give rise to the making and granting of the motion.

 JUSTIFICATION :

The New York State Foreclosure Prevention and Responsible Lending Act
of 2002 created a court-based mandatory settlement conference process
for all homeowners with sub-prime mortgages facing foreclosure. In
November 2009, additional legislation was enacted which expands the
mandatory settlement conference process to all homeowners facing
foreclosure, requires the parties to bring key documents to the
mandatory settlement conference, and obliges both parties to negotiate
in good faith to reach a mutually agreeable resolution.

The mandatory settlement conference process was created and expanded
with the express goal of reducing foreclosures and enabling more
families to remain in their homes. Unfortunately, all too often the
settlement conference process has not lived up to the legislature's
intentions. While the settlement conference process was created to
provide homeowners a chance to negotiate directly with their lenders
and reach a workable solution, numerous reports from homeowners, court
personnel, and foreclosure prevention organizations indicate that many
lenders frequently fail to comply with the law. All too often, lenders
repeatedly send subcontracted attorneys to settlement conferences and
foreclosure proceedings who have neither the preparation nor the
authority to negotiate with homeowners. According to a study conducted
by the Center for New York City Neighborhoods, of the nearly 800
settlement conferences they studied in 2009 in New York City courts,
only 3% resulted in any kind of settlement. The study found that
lawyers representing lenders only had a copy of an offer already made
by the homeowner to the lender of the time, knew the status of an
offer with the lender 6% of the time, and only had a phone number to
call someone with authority to settle in 13% of the conferences.

The failure of many lenders to send representatives to settlement
conferences and foreclosure proceedings who have the authority to
negotiate and execute settlements, as well as the ability to produce
documents requested by the court, is an enormous waste of the court's
and homeowners' time. Moreover, it undermines the ability of many
residents facing foreclosure to negotiate an agreement that would
enable them to stay in their homes.

This legislation directs the courts to adopt rules governing
foreclosure proceedings that will provide a strong incentive for
plaintiffs to appear at settlement conferences with the proper
authority, required knowledge and documents, and willingness to
negotiate in good faith as required by law.

 FISCAL IMPLICATIONS TO STATE AND LOCAL GOVERNMENT :

None.

 LEGISLATIVE HISTORY :

2010: S.7798A
2011-2012: S.442
2013-2014: S.1478-A
2015-2016: 4636-A

 EFFECTIVE DATE :
Immediately; provided, that section two of this act shall take effect
ninety days after it shall become a law.