New York State has passed several laws that protect homeowners who may be subject to a foreclosure action. One of these laws requires that a settlement conference be held for a homeowner when his primary residence is in foreclosure, due to his failure to pay their mortgage, taxes, or other amounts due to the lender.
Prior blog posts have discussed what may occur at a foreclosure settlement conference. We recommend engaging experienced counsel to appear at the foreclosure settlement conference. At this conference, attempts will be made, with the Court’s assistance, to resolve this matter, often through a modification of the existing mortgage.
However, there may be cases in which the parties are unable to reach a resolution in the settlement part. There may be several conferences held, but, for various reasons, the parties are unable to reach a resolution. What happens at that point? The first step is that the Court will generally release the case from the settlement part. Under the law, when the case is in the settlement part, all litigation, including motions, are “stayed” by the Court, which means that no litigation can occur in the action until the case is released by the settlement part. Depending on the overall circumstances of the case, the settlement part may order that the stay on litigation be extended for a period of time after the case is released, generally 30, 45, or 60 days. This may give the party being foreclosed additional time to negotiate a resolution, or, if there is sufficient equity, to sell the property and use the proceeds to pay off any amounts due, thus ending the foreclosure suit.