Courts see foreclosure filings rise even with new stringent requirements

December 29, 2014 By Charisma L. Troiano, Esq. Brooklyn Daily Eagle

Foreclosure filings are on the rise. Photo courtesy of NYC.gov

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The New York State Office of Court Administration (OCA) released the 2014 Foreclosure Report showing that foreclosure filings steadily increased since 2011, as well as a spike in the amount of homeowners represented by legal counsel.

It is estimated that 44,469 foreclosure filings will be filed by the end of 2014. As indicated in the OCA report, new filings dropped significantly in 2011 to 16,655, likely due to new rules instituted to protect homeowners from robo-signed mortgage documents.

“In large part due to new court rules that took effect in 2011 requiring that plaintiffs [banks] meet additional requirements when pursing a foreclosure action…filings dropped…in 2011 and…in 2012,” the report noted.

Years of adjusting to the new rules, the banks have caught on and are able to resume high volume foreclosure filings, the report concludes. “As the financial services industry eventually adjusted to the new requirements,” the report observed “[foreclosure] filings surged by 84% from 2012 to 2013.”

Another significant increase the OCA report points out is in the amount of foreclosures that resulted in settlements as opposed to default judgments. Between October 2012 and October 2013, there were 91,522 settlements. Compared to the same time period from 2013 to 2014, that number jumped to118,394.

The rise in settlements shows the significant burden that foreclosures have on New York’s civil court system, with foreclosure action consisting of 30 percent of the New York state court system’s civil cases.

To ease some of the burden, in 2013, Brooklyn Supreme Court Administrative Judge, Civil Term, Lawrence Knipel began requiring parties to foreclosure settlements to get permission if settlement conferences went beyond four sessions.

The benefits of settlements, however, outweigh the burden, OCA noted. “Despite this considerable burden, the Judiciary has maintained its commitment to foreclosure settlement conferences,” the 2014 report stated.

The more dramatic of increases discovered in 2014 was in the number of homeowners represented by counsel. In 2011 — when foreclosure rules became less relaxed — lawyers appeared on behalf of homeowners in only 33 percent of cases. Working with law school partners, civil legal services providers and bar associations to provide legal representation and access to justice, OCA contends, largely contributed to 58 percent of all homeowners in foreclosure actions having some form of legal assistance.

To further its interest in safeguarding the rights of homeowners, the judiciary has committed $70 million from its budget to provide civil legal services to New Yorkers in need of assistance.