New tool for speeding LI foreclosures: Judges

New York is one of 24 states where New York is one of 24 states where judges oversee foreclosures, according to the California-based real estate information company RealtyTrac. Photo Credit: iStock

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Long Island homeowners facing foreclosure soon will be able to seek help from a judge during settlement conferences with lenders, instead of relying on a court-appointed referee.

In state courts in Nassau and Suffolk counties, as well as Brooklyn and Queens, judges will be available to consult with homeowners and lenders when troublesome issues arise, Judge Barry Kamins, chief of policy and planning for New York State courts, said Monday. The change is due to take effect in June.

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"Hopefully this will result in quicker resolutions, quicker settlements," Kamins said.

If the new policy helps more distressed homeowners get modifications of their home loans, it could benefit entire communities, said Michael Wigutow, supervising attorney of Nassau-Suffolk Law Services Committee's foreclosure prevention project.

"The potential is there for more homeowners to end the foreclosure action in a favorable way," he said. "Then you have more stability in those communities, because those homeowners are planning on, and expecting to . . . stay in their homes."

However, the extra time spent overseeing conferences could add to judges' workload and further delay cases, said Allison Schoenthal, an attorney with Hogan Lovells in Manhattan who represents lenders.

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"I do not see it clearing out the backlog of foreclosures," she said. "But I would love to see it work."

New York is one of 24 states where judges oversee foreclosures, according to the California-based real estate information company RealtyTrac.

Throughout New York, court-appointed referees rather than judges oversee the conferences where lenders and homeowners try to resolve foreclosure cases.

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Long Island, Brooklyn and Queens make up more than half the state's foreclosure cases, Kamins said.

Kamins said the new policy comes in response to concerns raised by legal services attorneys. In a report released Wednesday, attorneys with three New York City-based groups -- JASA-Legal Services for the Elderly in Queens, Legal Services NYC and MFY Legal Services -- said lenders' attorneys lacked necessary information or authority to negotiate settlements in 80 percent of the 252 conferences the legal services groups observed in New York City.

Under a 2008 state law, homeowners and lenders must negotiate in "good faith," and lenders' attorneys must have the authority to negotiate settlements.

Kamins said he met with the legal services attorneys about a month ago. The attorneys, Kamins said, told him that "the attorney for the lender will come in several times in a row without the appropriate paperwork, or they'll send someone without the knowledge or authority [to negotiate] . . . Those are things that the judge will be able to address more quickly than the referee."

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