Foreclosure Pilot Programs Launched in Brooklyn

South Brooklyn Legal Services, Legal Services NYC-Brooklyn Branch, and Bedford-Stuyvesant Community Legal Services are all participants in a New York State Court pilot program aimed at addressing the so-called "shadow
docket"—approximately 25,000 cases statewide—occurring when a lender
initiates a foreclosure action but does not file documents triggering
mandatory settlement talks.

From the New York Law Journal:

The Brooklyn pilot is a scaled-down version of a proposal to give
judges and court attorney referees the power to push inactive cases into
the settlement conference part, even if no requests for judicial
intervention and mandated attorney affirmations have been filed (NYLJ, April 2).

Chief Administrative Judge A. Gail Prudenti authorized the new court rule on June 18 "for purposes of a pilot project only."

Court officials contacted borrowers in 100 stalled cases filed in December 2010 and 100 from December 2011.

Several
legal services groups—including South Brooklyn Legal Services, MFY
Legal Services, Bedford-Stuyvesant Community Legal Services, New York
Legal Assistance Group and the Brooklyn branch of Legal Services
NYC—will assess the cases and determine whether or not they will
represent homeowners in future settlement conferences.

Administrators will decide later this summer whether the program should be extended to other jurisdictions.

Under
the second pilot, which got under way last week, officials from Wells
Fargo, Citibank, Chase and Bank of America will be present at
conferences to offer quicker decisions on whether a mortgage
modification can be reached.

The initiative was announced by Chief Judge Jonathan Lippman (See Profile) in his state-of-the-judiciary message (NYLJ, Feb. 15).
The absence of bank representatives qualified to make decisions from
the conferences has contributed to constant adjournments and requests
for paperwork as modification offers are relayed back and forth.

Read more at NewYorkLawJournal.com (subscription required).