Courts Have Ability To Issue Sanctions In Foreclosure Cases

Edward Reisner, New York Law Journal

In response to the insightful article by Daniel Wise, “Panel Shifts Toward Remedy in ‘Sarmiento,'” (Aug. 29), I would raise one small point. Wise lamented that “The 2009 New York law (mandating settlement conferences in foreclosure cases) specifically instructed the Judiciary to issue rules to ‘ensure’ that judges have ‘the necessary authority and power’ to see that ‘conferences not be unduly delayed or subject to willful dilatory tactics,'” but that “the Judiciary has taken no action on the Legislature’s command.”

What the Legislature actually stated was “The chief administrator of the courts shall … promulgate such additional rules as may be necessary to ensure the just and expeditious processing of all settlement conferences authorized hereunder.”1

Although banks and mortgage servicers have argued in a number of cases that the failure of the chief administrator to have issued rules specifying what sanctions might be imposed for failing to negotiate in good faith at a settlement conference means that courts do not have any authority to sanction a violation, those arguments have been uniformly rejected.2

Clearly, the chief administrator’s silence reflects her view that no additional rules are needed, as judges supervising foreclosure settlement conferences have all of the powers of any New York court presiding over an equitable action, which are “as broad as equity and justice require.”3

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