A01597 Summary:

BILL NO    A01597 

SAME AS    No same as 

SPONSOR    Jeffries (MS)

COSPNSR    Jaffee, Colton, Camara, Rosenthal, Reilly, O'Donnell, Cook, Lancman,
           Barron, Perry, Pretlow, Boyland, Ramos, Rivera N, Schimel, Hooper

MLTSPNSR   Abbate, Farrell, Glick, Heastie, Meng, Millman, Peoples-Stokes,
           Pheffer, Thiele, Weisenberg, Wright

Amd S1303, add SS1309 & 1316, RPAP L; add S6-n, Bank L; add S2-c, Judy L; rpld
& add R3408, CPLR

Enacts the "foreclosure diversion act of 2011"; provides for a one-year
moratorium on foreclosures; requires a homeowner to attend a counseling
session; requires courts to meet with parties at a mandatory settlement
conference.
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A01597 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1597
 
SPONSOR: Jeffries (MS)
  TITLE OF BILL: An act enacting the "foreclosure diversion act of 2011"; to amend the real property actions and proceedings law, in relation to giving notice to mortgagors of the availability of foreclo- sure prevention counseling; to amend the banking law and the civil prac- tice law and rules, in relation to settlement conferences; to amend the real property actions and proceedings law, in relation to availability of a settlement conference in pending foreclosure actions; to amend the real property actions and proceedings law, in relation to providing a one-year postponement on foreclosures; to amend the judiciary law, in relation to the assignment of foreclosure actions; to repeal certain provisions of the civil practice law and rules relating thereto; and providing for the repeal of such provisions upon expiration thereof   SUMMARY OF PROVISIONS: Section 1 - Titles the "foreclosure diversion act of 2011" Section 2 - Statement of purpose & findings Section 3 - Definitions Section 4 details the Education and Outreach efforts the New York State Banking Department will undertake as an effort to reach homeowners whose homes are subject to foreclosure. Such efforts will include, but are not limited to, public service announcements and internet web sites main- tained by the department. Section 5 Subdivision 1 and 3 amends subdivisions 1 and 3 of section 1303 of RPAPL, as amended by 472 of the laws of 2008, to include in the notice requirement upon the commencement of a foreclosure action mandated counseling before any settlement conference, the hotline home- owners must call to receive information about not-for-profits which administer such counseling and the eligibility for a foreclosure post- ponement after participating in such counseling. Section 6 amends the banking law by adding an new section 6-n which assigns responsibility to the New York State Banking Department in establishing the procedure by which homeowners are counseled. If a resolution is reached between homeowner and the foreclosing party before the mandatory settlement conference, a certificate of resolution is to be filed with the court. If no resolution is made prior to the settle- ment conference a certificate of participation is to be filed with the courts. Section 7 amends Rule 3408 of the CPLR concerning mandatory settlement conferences to (1) establish the purpose of the mandatory settlement conference; (2) include in the notice of such conference the requirement that the homeowner participate in both the mandatory settlement confer- ence and complete a counseling session with an approved counselor prior to such conference; (3) require such counselor to send a modification proposal reached in the counseling session to the foreclosing party at least 10 days prior to the settlement conference and the foreclosing party to make a good faith effort to reach a settlement with the home- owner prior to the settlement conference; (4) allow the court to appoint counsel and adjourn the settlement conference if a homeowner appears pro se; (5) allow the homeowner to be represented by counselor a represen- tative with the authority to dispose of the case at the settlement conference; (6) require a homeowner at the settlement conference to present proof of participation in a counseling session with an approved counselor to take advantage of the nine month postponement option; (7) allow the court to preside over the mandatory settlement conference to facilitate a repayment plan that allows the homeowner to stay in their home: (8) require the court to provide all approved loan counseling agencies with a list of all home-owners served with a mandatory settle- ment conference notice; (9) require the court to detail any agreements made in a mandatory settlement conference into record for the action; and (10) provide penalties for plaintiffs who fail to appear without good cause or who are not represented by an individual authorized to negotiate and settle the claim. Section 8 amends RPAPL by adding a new section 1316 which allows any homeowner who has had an action for foreclosure on a residential mort- gage initiated prior to this act but where no final judgment has been entered the opportunity to request a settlement conference. Section 9 amends RPAPL by adding a new section 1305 to (1) allow the foreclosing party in a residential action relief in state court; (2) postpone a judgment of foreclosure for 90 days under this act and allow a nine month abeyance of any foreclosure action if the homeowner receives counseling and participates in a mandatory settlement confer- ence pursuant to this act. This abeyance is solely for the purpose to come to a settlement with the foreclosing party to keep the homeowner in their home; (3) waive all fees associated with the filing of a foreclo- sure action pursuant to this act; (4) establish the minimum requirements to be met in filing a foreclosure action; (5) and (6) allow the court officer presiding over the settlement conference to facilitate negoti- ation of a payment schedule by which a homeowner can continue to pay the mortgage actionable in the foreclosure so as to preserve the financial interest of the homeowner in the property until a settlement can be reached. This payment schedule shall last for no more than one year without a re-examination of the circumstances, and failure to adhere to such a payment schedule may result in foreclosure or a termination of the abeyance; (7) allow for any party to apply to the court officer or mediator for a revision of such payment schedule based on the fact that the terms of the payment plan are no longer just and equitable. Section 10 amends the judiciary law by adding a new section 2-c to ensure, as practicable under the individual assignment system of each court, that all foreclosure actions be assigned to the same judge or pool of judges.   JUSTIFICATION: Throughout the state, foreclosures continue to dramat- ically increase. In New York City, more than 1,700 homes were in some state of foreclosure in February of 2009, an increase of more than 44% from January. Statewide, Foreclosures are up more than 23% since Decem- ber of 2008. Many of the homeowners facing these foreclosures are the victims of predatory lending practices. Although certain lenders have voluntarily suspended foreclosures, these statistics indicate a need for more direct intervention. This bill would provide for a one year moratorium on foreclosures, and would promote negotiated settlements, helping to avoid foreclosure, and keeping work- ing New Yorkers in their homes.   LEGISLATIVE HISTORY: 2009-2010 (A.8236-A/S.4109-B) Referred to Banks.   FISCAL IMPLICATIONS: To be determined.   EFFECTIVE DATE: This act shall take effect on the sixtieth day after it shall have become a law and expire 3 years after such effective date when upon such date the provisions of this act shall be deemed repealed. Effective immediately, the superintendent of banks may promulgate any rule or regulation necessary for the timely implementation of this act on its effective date.
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A01597 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1597
 
                               2011-2012 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 11, 2011
                                       ___________
 
        Introduced  by  M.  of  A.  JEFFRIES, JAFFEE, COLTON, CAMARA, ROSENTHAL,
          REILLY, O'DONNELL, COOK, LANCMAN,  BARRON,  PERRY,  PRETLOW,  BOYLAND,
          RAMOS,  N. RIVERA,  SCHIMEL,  HOOPER -- Multi-Sponsored by -- M. of A.
          ABBATE, FARRELL, GLICK, HEASTIE, MENG, MILLMAN, PEOPLES-STOKES,  PHEF-
          FER,  THIELE,  WEISENBERG,  WRIGHT  --  read  once and referred to the

          Committee on Banks
 
        AN ACT enacting the "foreclosure diversion act of 2011";  to  amend  the
          real  property  actions  and  proceedings  law,  in relation to giving
          notice to mortgagors of the  availability  of  foreclosure  prevention
          counseling;  to  amend  the banking law and the civil practice law and
          rules, in relation to settlement conferences; to amend the real  prop-
          erty  actions  and  proceedings  law, in relation to availability of a
          settlement conference in pending foreclosure  actions;  to  amend  the
          real  property actions and proceedings law, in relation to providing a
          one-year postponement on foreclosures; to amend the judiciary law,  in
          relation  to  the assignment of foreclosure actions; to repeal certain
          provisions of the civil practice law and rules relating  thereto;  and
          providing for the repeal of such provisions upon expiration thereof

 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Short title.  This act shall be known and may be  cited  as
     2  the "foreclosure diversion act of 2011".
     3    §  2.  Statement of legislative purpose and findings.  The legislature
     4  finds and declares that there is a public emergency; that the  extension
     5  of  unaffordable mortgage loans, unaffordable second mortgages and unaf-
     6  fordable home equity loans have  resulted  in  thousands  of  homeowners
     7  losing  their homes.  The problems associated with these loans adversely
     8  affect the availability of capital, the demand for housing, the value of
     9  real estate, and more importantly, the ability  of  homeowners  to  keep
    10  their homes and communities viable.  The pending reset of interest rates

    11  in many home mortgages, second mortgages and home equity loans will only
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04624-01-1

        A. 1597                             2
 
     1  exacerbate this situation for many homeowners. The expectation that many
     2  such  variable  rate mortgages will fall into foreclosure upon the reset
     3  of the interest rate compels the state to take action. State  assistance
     4  to homeowners through a counseling program is necessary in order to stem
     5  this crisis.
     6    §  3.  Definitions.  As  used in this section and section four of this
     7  act, the following words and phrases shall have the following meanings:

     8    1. "Commissioner" shall mean the commissioner of the state division of
     9  housing and community renewal.
    10    2. "Department" shall mean the banking department.
    11    3. "Division" shall mean the state division of housing  and  community
    12  renewal.
    13    4.  "Eligible  homeowners"  shall  mean  any  resident  of  this state
    14  currently residing in a home located in this state  subject  to  a  home
    15  loan  who  the  commissioner  determines,  pursuant  to  the eligibility
    16  restrictions set forth in this act, is in need of foreclosure  diversion
    17  assistance.
    18    5.  "Home loan" shall mean a residential home mortgage loan, including
    19  an open-end credit plan, other than a reverse mortgage  transaction,  in
    20  which:
    21    (a) the borrower is a natural person;
    22    (b) the debt is incurred by the borrower primarily for personal, fami-
    23  ly or household purposes;

    24    (c)  the loan is secured by a mortgage or deed of trust on real estate
    25  upon which there is located a structure or structures  intended  princi-
    26  pally for occupancy of 1 to 4 families which is occupied by the borrower
    27  as the borrower's principal dwelling; and
    28    (d) the property is located in this state.
    29    6.  "Lender"  shall mean (a) a mortgage banker as defined in paragraph
    30  (f) of subdivision 1 of section 590 of the banking law, or (b) an exempt
    31  organization as defined in paragraph (e) of subdivision 1 of section 590
    32  of the banking law, or (c) a mortgage loan servicer as defined in  para-
    33  graph (h) of subdivision 1 of section 590 of the banking law.
    34    7.  "Non-profit assistance provider" shall mean a corporation or group
    35  of corporations organized under the  provisions  of  the  not-for-profit
    36  corporation  law, including but not limited to neighborhood preservation

    37  companies as defined in section 902 of the private housing finance  law,
    38  entities  that perform housing preservation and community renewal activ-
    39  ities pursuant to article 17 of the private housing finance law, common-
    40  ly referred to  as  rural  preservation  companies,  and  legal  service
    41  providers, and municipalities.
    42    8. "Service area" shall mean the established or stated boundaries of a
    43  non-profit  assistance  provider  or, if an assistance provider does not
    44  have established boundaries for the geographic area in which it provides
    45  services, the geographic area defined in its proposal to the division to
    46  be a service provider.
    47    9. "Superintendent" shall mean the superintendent of banks.
    48    § 4. Education and outreach to homeowners.  In coordination  with  the
    49  division  and the consumer protection board, the department shall under-

    50  take outreach activities directed at  any  homeowners  whose  homes  are
    51  subject to foreclosure.  Such outreach activities shall include, but not
    52  be limited to:
    53    1.  the production and broadcast of public service announcements using
    54  electronic media to inform the general public  of  the  availability  of
    55  counseling  through  the  New  York  state foreclosure diversion program
    56  established by this act. Such public service announcements shall  inform

        A. 1597                             3
 
     1  the  homeowner of the nature and purpose of the counseling and provide a
     2  website and phone number for the homeowner to utilize; and
     3    2.  the inclusion of a description on the internet websites maintained
     4  by the division, the department and the consumer protection board of the
     5  New York state foreclosure diversion program  and  a  listing  of  those

     6  entities  that  provide  counseling  with respect to the program.   Such
     7  listing shall include the address and phone number of each entity.
     8    § 5. Subdivisions 1 and 3 of section 1303 of the real property actions
     9  and proceedings law, as amended by chapter 507 of the laws of 2009,  are
    10  amended to read as follows:
    11    1.  The  foreclosing party in a mortgage foreclosure action, involving
    12  residential real property shall provide notice to:
    13    (a) any mortgagor if the action relates to an  owner-occupied  one-to-
    14  four family dwelling; and
    15    (b) any tenant of a dwelling unit in accordance with the provisions of
    16  this section. Such notice shall include information about the availabil-
    17  ity of the foreclosure diversion program and its ability to assist home-
    18  owners in avoiding foreclosure and the mandatory counseling required for

    19  participation  in  the foreclosure diversion program.  Such notice shall
    20  include the hotline established by the banking department  and  provided
    21  by  the  division  of  housing and community renewal pursuant to section
    22  four of the foreclosure diversion act of 2011 and the names and  contact
    23  information  for  all  not-for-profit assistance providers authorized by
    24  the department to provide housing counseling services to homeowners.
    25    3. The notice to any mortgagor required by paragraph (a)  of  subdivi-
    26  sion one of this section shall appear as follows:
    27                     Help for Homeowners in Foreclosure
    28    New  York  State  Law  requires that we send you this notice about the
    29  foreclosure process. Please read it carefully.
    30    BEFORE YOU ATTEND A SETTLEMENT CONFERENCE, YOU ARE STRONGLY  URGED  TO

    31  SCHEDULE  AND ATTEND A COUNSELING SESSION BY CALLING THE BANKING DEPART-
    32  MENT AT THE FOLLOWING HOTLINE NUMBER: _______________________
    33  Summons and Complaint
    34    You are in danger of losing your home. If you fail to respond  to  the
    35  summons  and  complaint  in  this  foreclosure action, you may lose your
    36  home. Please read the summons and complaint carefully. You should  imme-
    37  diately  contact  an  attorney  or your local legal aid office to obtain
    38  advice on how to protect yourself.  You should immediately seek  out  an
    39  approved  loan  counselor. A list of approved counselors can be obtained
    40  by calling the hotline. If you do not attend a counseling  session,  you
    41  will not be eligible to participate in the residential mortgage foreclo-

    42  sure  diversion program. This will not affect your right to a settlement
    43  conference, but will affect your eligibility for a postponement of fore-
    44  closure under the residential mortgage foreclosure diversion program.
    45  Sources of Information and Assistance
    46    The State encourages you to become  informed  about  your  options  in
    47  foreclosure. In addition to seeking assistance from an attorney or legal
    48  aid  office,  there are government agencies and non-profit organizations
    49  that you may contact for information about possible  options,  including
    50  trying to work with your lender during this process.
    51    To  locate  an  entity  near  you, you may call the toll-free helpline
    52  maintained by the New York State Banking Department at (enter number) or
    53  visit the Department's website at (enter web address).
    54  Foreclosure rescue scams

    55    Be careful of people who approach you with offers to "save" your home.
    56  There are individuals who watch for notices of  foreclosure  actions  in

        A. 1597                             4
 
     1  order  to  unfairly  profit  from  a homeowner's distress. You should be
     2  extremely careful about any such promises and any suggestions  that  you
     3  pay  them a fee or sign over your deed. State law requires anyone offer-
     4  ing  such  services  for  profit  to  enter  into a contract which fully
     5  describes the services they will perform and fees they will charge,  and
     6  which  prohibits  them  from  taking  any money from you until they have
     7  completed all such promised services.
     8    § 6. The banking law is amended by adding a new section 6-n to read as
     9  follows:
    10    § 6-n. Counseling of mortgagees. 1. The department shall  establish  a

    11  procedure to counsel homeowners whose property is subject to or about to
    12  become subject to foreclosure.
    13    2.  A  counselor from a not-for-profit assistance provider approved by
    14  the department shall meet with all homeowners prior to  their  scheduled
    15  settlement  conference.  The counselor shall also consult with the fore-
    16  closing party or such party's representative and attempt to formulate  a
    17  repayment  schedule  that  is  acceptable  to both the homeowner and the
    18  foreclosing party. If the parties agree, they shall file  a  certificate
    19  of resolution with the court of jurisdiction.
    20    3.  If  the counselor is unable to negotiate an acceptable resolution,
    21  the parties shall file a certificate of participation with the court  of

    22  jurisdiction and the scheduled settlement conference shall proceed.
    23    §  7.  Rule 3408 of the civil practice law and rules is REPEALED and a
    24  new rule 3408 is added to read as follows:
    25    Rule 3408.  Mandatory settlement conference in residential foreclosure
    26  actions. 1. In any residential foreclosure action in which the defendant
    27  is a resident of the property subject to foreclosure,  the  court  shall
    28  hold a mandatory conference within ninety days after the date when proof
    29  of  service is filed with the county clerk, or on such adjourned date as
    30  has been agreed to by the parties, for the purpose of holding settlement
    31  discussions pertaining to the relative rights  and  obligations  of  the
    32  parties under the mortgage loan documents, including, but not limited to

    33  determining  whether  the  parties can reach a mutually agreeable resol-
    34  ution to help the defendant avoid losing his or her home, and evaluating
    35  the potential for a resolution in which payment schedules or amounts may
    36  be modified or other workout options may be agreed to, and for  whatever
    37  other purposes the court deems appropriate.
    38    2.  The court shall cause a notice to be sent to the parties by certi-
    39  fied mail informing them of the date, time, and location of the  confer-
    40  ence,  and informing the homeowner of his or her option of participation
    41  in the residential mortgage foreclosure  diversion  program  established
    42  pursuant  to  the  foreclosure  diversion  act of 2011. The notice shall

    43  include the hotline established by the banking  department  pursuant  to
    44  the foreclosure diversion act of 2011 and a statement that the homeowner
    45  must complete a counseling session prior to his or her scheduled settle-
    46  ment  conference  in  order  to  participate in the residential mortgage
    47  foreclosure diversion program.
    48    3.  If the homeowner completes a counseling session with  a  counselor
    49  from  a  not-for-profit  assistance provider approved by the department,
    50  such counselor shall send a loan modification proposal to the  foreclos-
    51  ing  party  at  least  ten days prior to the settlement conference.  The
    52  foreclosing party shall, prior to the settlement conference, review  the

    53  modification proposal and make a good faith effort to reach a resolution
    54  with the homeowner.
    55    4.  At  the  initial  conference  held  pursuant  to this section, any
    56  defendant currently appearing pro se, shall be deemed  to  have  made  a

        A. 1597                             5
 
     1  motion  to  proceed as a poor person under section eleven hundred one of
     2  this chapter. The court shall determine whether such permission shall be
     3  granted pursuant to standards set forth in section eleven hundred one of
     4  this chapter. If the court appoints defendant counsel pursuant to subdi-
     5  vision  (a)  of  section  eleven  hundred  two of this chapter, it shall
     6  adjourn the conference to a date certain for appearance of  counsel  and

     7  settlement  discussions pursuant to subdivision one of this section, and
     8  otherwise shall proceed with the conference.
     9    5.  At any conference held pursuant to  this  section,  the  plaintiff
    10  shall appear in person or by counsel. Any person representing the plain-
    11  tiff  shall  have  full settlement authority, including the authority to
    12  dispose of the case and to enter into or approve a loan modification  or
    13  workout  agreement. The defendant-mortgagor shall appear in person or by
    14  counsel.  Such appearance and participation by  the  defendant-mortgagor
    15  shall  not constitute an appearance in the action nor shall it be deemed
    16  to be a waiver, in whole or in part, of any defenses, jurisdictional  or

    17  otherwise,  that the defendant-mortgagor may have to the action. Any and
    18  all statements made, whether oral or written, and any or all information
    19  exchanged at the conference, shall be solely for the purposes of  resol-
    20  ution and settlement and shall not be deemed to be the admissions of any
    21  party with respect to the underlying action. If the defendant is appear-
    22  ing  pro  se,  the court shall advise the defendant of the nature of the
    23  action and his or her rights and responsibilities as a defendant.  Where
    24  appropriate, the court may permit a plaintiff or the plaintiff's  repre-
    25  sentative  to  attend  the  settlement  conference  telephonically or by
    26  video-conference. Until all the provisions and procedures of the settle-

    27  ment conference are concluded, the mortgagee  shall  be  precluded  from
    28  filing  a motion for summary judgment or order of reference or otherwise
    29  proceeding with the foreclosure case. The failure of  the  plaintiff  to
    30  appear  at  a scheduled conference without good cause or appearance by a
    31  representative without  full  authority  to  enter  into  a  settlement,
    32  modification  or  workout  agreement  shall subject the plaintiff and/or
    33  counsel to appropriate remedial action  including  but  not  limited  to
    34  default, non-suit or dismissal with prejudice.
    35    6.  Both  parties  must have any supporting documentation with them at
    36  the time of the conference.   If the  homeowner  attended  a  counseling

    37  session  with  an  approved  counselor, such counselor must have given a
    38  loan modification proposal to the foreclosing party at  least  ten  days
    39  prior to the settlement conference.
    40    7.  The court shall preside over the conference in an effort to estab-
    41  lish a repayment plan that is acceptable to the lender that  allows  the
    42  homeowner to remain in the home.
    43    8.  After  the settlement conference, the court shall produce a report
    44  finalizing and detailing any terms and conditions that have been  agreed
    45  upon  by  the  parties. Such report shall be made part of the record for
    46  the action.
    47    § 8. The real property actions  and  proceedings  law  is  amended  by
    48  adding a new section 1316 to read as follows:

    49    § 1316. The court shall notify the defendant of any foreclosure action
    50  on  a  residential  mortgage loan, in which the action was initiated but
    51  where the final order of judgment was not issued prior to the  effective
    52  date  of  the foreclosure diversion act of 2011, that such defendant may
    53  request a settlement conference  in  accordance  with  rule  thirty-four
    54  hundred eight of the civil practice law and rules.
    55    §  9.  The  real  property  actions  and proceedings law is amended by
    56  adding a new section 1309 to read as follows:

        A. 1597                             6
 
     1    § 1309. Foreclosures; court relief.  1. Venue. In any action to  fore-
     2  close  a  residential  mortgage  under this article a mortgagor named in

     3  such action may apply for relief in state supreme court pursuant to this
     4  section.
     5    2.  Timing  of  postponement. If a mortgagee has otherwise established
     6  its legal right to judgment on an  action  to  foreclose  a  residential
     7  mortgage  pursuant  to  this  chapter, then such action shall be held in
     8  abeyance by the court before which such action is pending for  a  period
     9  of ninety days. If the mortgagor receives counseling from a not-for-pro-
    10  fit  assistance  provider  approved  by  the  division  and subsequently
    11  participates in a settlement conference, then  the  court  before  which
    12  such  action  is pending shall hold such action in abeyance for an addi-
    13  tional nine months.   Such additional period  of  time  is  intended  to

    14  permit  the  parties  to settle the action outside of court and to fore-
    15  stall foreclosure wherever possible.
    16    3. Process and fees. If an action to foreclose a residential  mortgage
    17  has  been commenced prior to the effective date of this section, a mort-
    18  gagor may ask the court before which such action is  commenced  to  hold
    19  such  action  in  abeyance  pursuant to subdivision two of this section.
    20  Motions on notice in accordance with the civil practice  law  and  rules
    21  made  by  the  mortgagor  shall  be  deemed to have been filed by a poor
    22  person pursuant to article eleven of the civil practice  law  and  rules
    23  and all court fees otherwise applicable to such actions and payable by a

    24  mortgagor  shall  be  waived.    If  a  foreclosure  action has not been
    25  commenced prior to the effective date of this section, a mortgagor  must
    26  commence  an  action  in  state  supreme  court  by filing and serving a
    27  summons pursuant to article three of the civil practice  law  and  rules
    28  with a request for relief pursuant to the terms of this section. In such
    29  case,  such  filing  shall be deemed to have been filed by a poor person
    30  pursuant to article eleven of the civil practice law and rules  and  all
    31  filing  and  court fees otherwise applicable to such actions and payable
    32  by a mortgagor in the form of index and motion fees shall be waived.
    33    4. Prima facie case. A mortgagor must establish a prima facie case  in

    34  the  motion  or pleading. Amendments to such motion or pleading shall be
    35  liberally granted. Such pleading must establish that:
    36    a. the mortgagor is a natural person; and
    37    b. the debt is incurred by the mortgagor primarily for personal, fami-
    38  ly or household purposes; and
    39    c. the loan is secured by a mortgage, second mortgage or  home  equity
    40  loan  on  real  property  which  is improved with a residential building
    41  containing one to four dwelling units; and
    42    d. the real property subject to foreclosure is the principal residence
    43  of the mortgagor; and
    44    e. the mortgagor owns no other real property; and
    45    f. the real property is located in this state.

    46    5. Monthly payment schedule. If a prima facie  case  has  been  estab-
    47  lished,  the  court  officer  or  mediator presiding over the settlement
    48  conference set forth in rule thirty-four  hundred  eight  of  the  civil
    49  practice  law  and  rules  shall  work with the parties to establish the
    50  terms of a monthly payment schedule which  will  preserve  the  relative
    51  financial  interests of both parties under terms which are equitable and
    52  just. Towards that end, the court officer or mediator shall inquire into
    53  the finances of both the mortgagee and the  mortgagor.  The  purpose  of
    54  such inquiry shall be to determine the minimum amount necessary to main-
    55  tain  the  mortgagee's  financial  position  and to determine the amount

    56  which the mortgagor will be able to afford.  Such monthly payments shall

        A. 1597                             7
 
     1  be applied to the principal and interest upon the indebtedness.  If  the
     2  financial  condition  of the mortgagor exceeds the minimum amount neces-
     3  sary to maintain the financial position of the mortgagee,  such  monthly
     4  amount  may  be increased beyond the minimum amount as determined within
     5  the discretion of the court officer or mediator.  It is within the court
     6  officer's or mediator's discretion to determine whether  the  establish-
     7  ment  of such payment schedule is possible under terms which are equita-
     8  ble and just. The purpose of such monthly payments is  to  preserve  the

     9  relative  financial  interests of both parties until a settlement can be
    10  reached but in no event shall such order govern for more than one  year.
    11  Failure to adhere to the terms of such schedule may also result in fore-
    12  closure or lifting of the abeyance.
    13    6. Postponement order. Once the court determines that an equitable and
    14  just  payment schedule can be established, it shall issue an order which
    15  sets forth the terms of such payment schedule  and  serve  it  upon  all
    16  parties  to the proceeding. Such order shall set forth a return date for
    17  the re-examination of such matter after passage of the postponement time
    18  period at a formal hearing on notice  to  the  parties.  The  court  may

    19  tailor  relief  as  required by the facts of each case that falls within
    20  the purview of this section. However, in no event shall such order post-
    21  pone final action beyond  one  year  without  a  re-examination  of  the
    22  parties'  financial  circumstances after formal hearing on notice to the
    23  parties. The time period of such order shall run from the  date  of  the
    24  entry  of  such order.  Such abeyance shall not begin until the foreclo-
    25  sure process has reached the point where a final determination is possi-
    26  ble but shall be withheld until the  postponement  period  has  elapsed.
    27  Entitlement  to  such abeyance may be established at any time regardless
    28  of whether foreclosure is being sought by the mortgagee. Multiple  post-

    29  ponements  may be granted in the discretion of the court if warranted by
    30  the facts of a given case and the economic conditions across the state.
    31    7. Continuing jurisdiction. The court shall maintain continuing juris-
    32  diction of the matter until it reaches final resolution. Upon the appli-
    33  cation of either party, prior to  the  expiration  of  the  postponement
    34  period,  upon presentation of evidence that the terms fixed by the court
    35  are no longer just and equitable, the court may revise  and  alter  such
    36  terms  in  such  manner  as the changed circumstances and conditions may
    37  require.
    38    § 10. The judiciary law is amended by adding a new section 2-c to read
    39  as follows:
    40    § 2-c. Individual assignments. The unified court system, in accordance

    41  with their individual assignment system, shall ensure that all causes of
    42  action to foreclose on real property shall be assigned to the same judge
    43  or judges, to the extent practicable.
    44    § 11. Notwithstanding the ninety day provision  in  subdivision  1  of
    45  rule  3408  of  the civil practice law and rules, a judge shall schedule
    46  settlement conferences pursuant to  such  section  for  any  foreclosure
    47  proceeding currently on their calendar.
    48    §  12.  This  act shall take effect on the sixtieth day after it shall
    49  have become a law and shall expire 3 years  after  such  effective  date
    50  when upon such date the provisions of this act shall be deemed repealed.
    51  Effective  immediately,  the  superintendent of banks may promulgate any
    52  rule or regulation necessary for the timely implementation of  this  act
    53  on its effective date.
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