Unsettled Times Make Well-Settled Law: Recent Developments in New York State's Residential Mortgage Foreclosure Statutes and Case Law
Dillon, Mark C., Albany Law Review
The New York State and national housing markets crashed in 2008. Difficulties in the New York State housing market have continued since then, as housing values are depressed and, in many instances, mortgages on homes exceed the value of the homes themselves. Many homeowners have defaulted on their mortgages, and the number of mortgage foreclosure actions filed in state court has increased, creating a need and an opportunity for procedural certainty and clarity.
To respond to the residential mortgage foreclosure "crisis," the State of New York enacted and amended a coordinated series of statutes designed to protect homeowners facing foreclosure on their homes in 2008, 2009, 2010, and 2011, in a public policy effort of maintaining as many families in their homes as possible. The statutes at issue include Real Property Law ("RPL") section 265-a, Banking Law sections 6-1 and 6-m, Real Property Actions and Proceedings Law ("RPAPL) sections 1303 and 1304, and Civil Practice Laws and Rule ("CPLR") section 3408.
To date, provisions of most of these statutes have required interpretation by courts at both the trial and appellate level. There is now a body of appellate case law addressing issues of first impression regarding the meaning and operation of these homeowner protection statutes. This article summarizes the state of residential foreclosure law in New York State today, including its new homeowner protection laws and the cases that have interpreted them.
TABLE OF CONTENTS ABSTRACT I. STANDING, STANDING, STANDING A. Issues Peculiar to the Standing of Plaintiffs B. Issues Peculiar to the Standing Defenses of Defendants II. THE HOME EQUITY THEFT PREVENTION ACT AND RPL SECTION 265-A III. HEPTA'S 90-DAY MORTGAGE FORECLOSURE NOTICE UNDER SECTION 1304 HEPTA'S 90-DAY MORTGAGE FORECLOSURE NOTICE UNDER SECTION 1304 OF NEW YORK'S REAL PROPERTY ACTIONS AND PROCEEDINGS LAW IV. HEPTA's HOUSING COUNSELOR NOTICE REQUIREMENT UNDER RPAPL SECTION V. THE PROVISIONS OF BANKING LAW SECTIONS 6-L AND 6-M VI. MANDATORY SETTLEMENT CONFERENCES UNDER CPLR SECTION VII. ATTORNEY AFFIRMATION REQUIREMENTS VIII. PROSCRIBING SUA SPONTE ACTIVITIES BY TRIAL COURTS IX. CONCLUSIONS
Unsettled times make well-settled law.
There have been significant recent developments in New York State statutes and appellate decisional authority with regard to New York's law on residential mortgage foreclosures. (1) The statutes, mostly enacted in 2008 as a result of difficulties experienced in the New York State housing market, require a measure of judicial interpretation. (2) Cases affording the opportunity for interpretation have begun reaching the appellate courts. This article seeks to summarize those developments, as particularly reflected by several opinions rendered by the Appellate Division, Second Department.
The major developments in residential mortgage foreclosure law have centered in the areas of standing, pleading requirements, court procedures, and consumer protections as reflected by the constituent statutes of the Home Equity Theft Protection Act CHETPA"), and court procedures, each of which will be discussed here. (3) The intention of this article is not to advocate for any position on the current statutory and decisional law, but to instead provide a snapshot of where residential mortgage foreclosure law stands at this time. This is, after all, a period of significant litigation activity prompted by both the decline of New York's housing market and statutes enacted by the state legislature to address the foreclosure crisis. (4)
The reader may notice that almost all of reported cases that are discussed in this article originate from the Second Department. The reason is not that particular emphasis is being placed upon the decisions of that court, and reveals no bias on the part of the author. …