Staten Island Legal Services Wins Decision Recognizing Loan Modification Discussions

Richmond County Supreme Court Judge Maltese granted Staten Island Legal Services' motion to vacate the judgment of foreclosure and sale entered against Staten Island Legal Services clients who were engaged in loan modification discussions with the servicer when the plaintiff sought a default judgment.  His decision reaffirms the principle that reasonable loss mitigation discussions with the servicer can excuse a defendant's failure to file an answer to a foreclosure complaint. 

"The blatantly contradictory actions taken by both the plaintiff and
its counsel justify a finding that moving defendants failure to serve
an answer is reasonable under the statute" (describing the servicer's
promise to modify the loan and stop foreclosure while counsel moved ex
parte for judgment).

Download the decision (PDF).