The End Is Near For New Yorkers Living For Free. New York Foreclosure Litigation Times Drop From 48 Months To 6 Months
The end is near for New York homeowners hoping to take advantage of the state’s notorious long foreclosure litigation time. New York foreclosure litigation times have dropped off dramatically in the past year.
The Empire State had an average foreclosure litigation time of 36-48 months in 2015. The average foreclosure litigation time in New York is now 6 months.
Multiple factors on the federal and state level have attributed to this drastic cut.
The End of HAMP
The Home Affordable Modification Program was launched in 2009 in answer to the financial crisis.
Economists believed that foreclosures were losing proposition for everybody involved. Lenders would face long-term losses from a foreclosed mortgage instead of negotiating more favorable terms with the homeowner. Foreclosures also drag down the value of surrounding properties by creating a cascade of lower values across the housing market.
HAMP offered financial incentives to lenders to negotiate loan reductions with at-risk homeowners. The government would pay the mortgage lenders $1,000 for every loan they modified. They would also pay lenders an annual $1,000 for every borrower who stayed current over the next three years.
The program had limited success.
When the program ended January 1st, Finch Rating Agency stated, “Modification decision timelines will shorten, which may lead to a modest reduction in liquidation timelines.”
Foreclosure Mills Are Moving Cases To Federal Court
New York foreclosure mills are also using a new tactic to speed up the foreclosure process. They are using Diversity of Citizenship to move the cases from state court to federal court.
A typical New York foreclosure averaged 36-48 months. New York foreclosure mills have cut that time by bypassing the NYS Foreclosure Prevention and Responsible Lending Act.
A lender only needs to have diversity to get into federal court. This means the citizenship of the plaintiff or lender is different than the citizenship of the homeowner.
Let’s say the lender is Ocwen. Ocwen holds the note and they are in Florida. The borrower and the property are in New York. Because the citizenships are different, they’re diverse.
Foreclosure mill attorneys using the Diversity of Citizenship argument is not new. They have been using it in non-judicial foreclosure states like Michigan for almost a decade.
New York foreclosure mills are also using the federal courts to simply bypass New York state’s foreclosure settlement conferences.
Judges Fed Up With Homeowners Looking For A Free Ride
The reality is most New York homeowners in foreclosure were not victims of lending fraud. They just simply stopped making the payments for one reason or another and want to blame the lender. These homeowners also purposely refuse to sign modification agreements even when given a sweet deal. Why? They have become accustomed to not making a payment. So they reject the offer to drag out the process.
Most of them also have no intention of modifying their loan nor do they want to. All they want to do is stay in the house as long as they can. Yet, what they fail to understand is judges in New York can see right through their bullshit.
Court mediators also are fed up and giving homeowners one chance if they drop the ball. In many counties, homeowners don’t even get that. It’s RJI time if they drop the ball or take mediation seriously.
I’m not saying all homeowners in foreclosure are like this. There are people who want to legitimately stay in their homes. They are willing to do what their attorney and the judge instructs them to do.