Governor Signs Law to end robo-signing abuse, curtail shadow docket
August 1, 2013, Albany, NY—New Yorkers for Responsible Lending (NYRL) applauds Governor Andrew M. Cuomo for signing into law landmark legislation that will ensure greater fairness in New York’s foreclosure process and curtail New York’s “shadow docket,” which leaves New Yorkers facing foreclosure in legal limbo for months and even years.
The new law, S.4530-A/A.5582-A, closes an administrative loophole in the state court system that has allowed lenders’ lawyers to delay submitting paperwork that certifies the legitimacy of the foreclosure lawsuits they file. This delay has put thousands of New Yorkers into a “shadow docket,” made up of cases that sit inactive when lawyers fail to file the required affirmations needed to move cases forward. As a result, the cases never reach mandatory court-supervised mediation. The long delays make it much more difficult for homeowners to obtain an affordable modification to avert foreclosure, as interest and fees continue to accrue while the cases sit in legal limbo.
With an estimated 92 foreclosure cases entering New York’s shadow docket each day, the NYRL coalition had prioritized the legislation as critical to ensuring that New Yorkers do not lose their homes to foreclosure.
The new law requires lawyers for mortgage lenders to file a Certificate of Merit when they file a foreclosure action, verifying “there is a reasonable basis for the commencement of such action.” Lawyers must also attach copies of key loan documents verifying that the lenders have legal standing to file the foreclosure actions.
The coalition also thanks the bill’s main sponsors, Senate Co-Leader Jeff Klein and Assembly Judiciary Chair Helene Weinstein, as well as New York State Attorney General Eric T. Schneiderman and Chief Judge Jonathan Lippman and Chief Administrative Judge A. Gail Prudenti of the Office of Court Administration, which initially brought the bill to the Legislature. The new law goes into effect in 30 days and applies to all foreclosure actions involving a home loan.
NYRL is a state-wide coalition of 161 groups, which promotes access to fair and affordable financial services and the preservation of assets for all New Yorkers and their communities. NYRL members represent community financial institutions, community-based organizations, affordable housing and foreclosure prevention groups, advocates for seniors, legal services and labor organizations, and community reinvestment, fair lending, and consumer advocacy groups.
For more information, contact:
Jacob Inwald, (646) 442-3634
Elise Brown, (212) 417-3753
Kirsten Keefe, (518) 935->2846
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