New York Foreclosures Likely to “Choke” in the New Year

New York Foreclosures Likely to “Choke” in the New Year
Posted by BEREL News Team on Tuesday, December 21st 2010

Thanks to requisite “special affirmations” from New York bank attorneys indicating that they know that all bank documents are valid because they have personally checked the paperwork, New York state’s foreclosure process will likely grind to a halt in the New Year as lenders and their lawyers work to develop a process that will allow attorneys to make this type of affirmation[1]. During the development process, foreclosure filings will likely drop to nearly zero since under current standards, there is no time or place in the present foreclosure process for the attorneys to check every document coming out of the lender. In fact, just since October 20, 2010, the date that the order was signed, foreclosures have dropped from 800 to 100 per week.

“Hundreds of foreclosure filings have been withdrawn,” confirmed secretary to Suffolk County Supreme Court Judge Erin Michael Kay, who mentioned that the judge’s caseload was actually down to 250 from a “much higher” load just a week earlier. Other judges opted to dismiss all pending foreclosures coming before them because banks and lenders did not have the newly-required affirmations in order, and some judges have gone so far as to require far more detailed affirmations than those specified by the new law. All of this “custom work” will further slow the foreclosure process and make implementing the changes more complicated for lenders and their attorneys.

The judges agree, however, that they are not trying to stop banks from foreclosing – just that they want to make sure that things are done right in light of the robo-signer fiasco. Wrote one judge’s chief law assistant: “If people can’t afford their home, if they can’t pay their bills, the foreclosure will happen. Homeowners have to have a plan and the ability to pay. The banks are entitled to be paid.”

Do you believe that these delays are simply procedural, and not a delaying tactic to keep homeowners in their delinquent homes?