NEW YORK – Last night, Governor Andrew M. Cuomo signed S.4530A/A.5582, known as the “Certificate of Merit” bill, into law. The Certificate of Merit law brings greater integrity to the foreclosure process and expedites homeowners’ participation in court-supervised mediation sessions where they can negotiate workable alternatives to foreclosure with their lender. This joint program bill was proposed by the Office of the Attorney General and the Office of Court Administration. It was sponsored in the Assembly by Judiciary Committee Chair Helene Weinstein and in the Senate by Co-Leader and Independent Democratic Conference Leader Jeff Klein.
Homeowners’ foreclosure cases regularly languish for months, or even years, when financial institutions delay in filing critical paperwork that affirms the basis for the foreclosing bank’s right to foreclose on the property and ultimately triggers a settlement conference – the mandatory process under New York law that provides borrowers an opportunity to negotiate alternatives to foreclosure, such as loan modifications or short sales. The delays and subsequent backlogs, often referred to as the “shadow docket,” have become a major burden on both homeowners and the judicial system. This legislative fix will require banks to file the necessary paperwork, which ultimately triggers the settlement conference, simultaneously with the filing of any foreclosure action, thus avoiding future delays. It has been reported that the Office of Court Administration estimates 25,000 families are trapped in this legal foreclosure limbo.
The following statement may be attributed to Attorney General Schneiderman in response to the bill signing:
“On behalf of thousands of New Yorkers, I want to thank Governor Cuomo for signing our bill to prevent banks from leaving homeowners in limbo for months – often years – during the foreclosure process. Instead of being trapped in the shadow docket, New Yorkers will now have a fighting chance to save their homes and challenge banks and mortgage lenders in a settlement conference. I want to thank the Office of Court Administration, the bill sponsors, Senator Klein and Assembly Member Weinstein, and the advocates for homeowners across the state, including New Yorkers for Responsible Lending, for working so hard to make this bill law. The housing crisis in New York is far from over, but this law represents one more step – and a key priority – in my fight to hold the banks accountable and protect homeowners still suffering from the effects of the financial collapse.”
source: ag.ny.gov
