LSNYC and Allies Weigh in on Plan to Clear Shadow Docket

New Yorkers for Responsible Lending, a coalition of organizations representing consumers that includes legal service providers and housing counselors, recently submitted comments in response to an Office of Court Administration proposal intended to help clear the "shadow docket" of foreclosure actions filed by lenders that languish without court action. LSNYC Director of Foreclosure Prevention Litigation submitted the comments on behalf of the coalition.

The new rule as proposed would let court attorney referees and judges establish
"delinquency calenders" to call inactive foreclosure cases which could
then be sent to settlement conferences, even without required documents
like an attorney affirmation swearing to the accuracy of the underlying
paperwork.

From a May 21, 2012 New York Law Journal piece:

The proposed rule gave courts the ability to contact housing
counselors upon notice of an inactive case. But the coalition instead
recommended legal service groups be contacted, writing, "Legal services
lawyers are better situated to assist homeowners with dormant cases
referred to status conferences."

The coalition also maintained
that judges should preside over the status conferences and said the rule
should "clearly state" the range of potential remedies a judge is
already empowered to apply. The listed remedies include dismissal,
tolling interest on the mortgage and barring the collection of legal
fees.

Jacob Inwald, director of foreclosure prevention litigation
for Legal Services NYC, said the coalition wanted the rule to explicitly
specify the range of authority already vested in a judge because those
remedies might not always occur to some judges, especially when many
homeowners appearing pro se at status conferences would not raise the
remedies themselves.

"We're very much appreciative of the court's
planning to take action," Inwald said in an interview, "but we think it
should be clearer what the courts can do to address the problem in a way
that gives redress to homeowners who are tangibly harmed by violations
of the rule up until now. That's what were trying to achieve."

Inwald
added that the proposal is "a positive step. But if the step's being
taken, let's make it as strong and effective as possible."

Read the rest of the article at NYLJ.com.