Manhattan Foreclosure Cases Speed Up As Courts Implement Rocket Docket.
Manhattan judges have implemented a rocket docket for Manhattan foreclosure cases. It seems the end is near for Manhattan homeowners hoping to take advantage of the borough’s notorious long foreclosure litigation time. Other New York counties are taking Brooklyn’s lead in dealing with Manhattan foreclosure cases. Counties across the New York Metro area have also begun implementing similar rocket docket procedures. County governments expect foreclosure litigation times to dropped by 75% by the end of 2018.
The Empire State had an average foreclosure litigation time of 36-48 months in 2015. The average foreclosure litigation time across New York is expected to hit 12 months. Supreme Court Judges want to cut it under six months.
Multiple factors on the federal and state level have attributed to this drastic cut.
The End of HAMP Speeds Up Manhattan Foreclosure Cases
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.”
Lenders Are Moving Cases To Federal Court To Speed Up Manhattan Foreclosure Cases
New York foreclosure mills are also using a new tactic to speed up Queens foreclosure cases. 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 Are Fed Up With Homeowners Milking The System
The reality is most Manhattan 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.
Manhattan Supreme Court Judges Have Embraced The Rocket Docket In Handling Manhattan Foreclosure Cases
The court planned to dismiss nearly 1600 foreclosure cases filed before Jan. 1, 2016 that have seen no court activity after Sept. 30, 2016.
Lawyers say the court’s actions would also be extremely harmful to homeowners battling lenders. For one, all of the motions a homeowner had filed taking issue with the lenders’ claims would be lost. In addition, many of the delays are due to the lenders dragging their feet. Lawyers also say that dismissing the case without fault to either side would allow the lenders to relaunch their cases.
In addition, lawyers say that it’s highly unlikely that most of the self-representing owners would have seen the notice buried in the “Court Notes” on page 11 of the journal last month.
K. Scott Kohanowski of City Bar Justice Center said:
Lawyers have complained that since the Brooklyn courts whittled the 25 judges previously assigned to handling foreclosures down to just four judges. The reforms seem to focus on resolving cases quickly to clear the backlog. Lawyers argue judges are creating a “Rocket Docket” and not considering the facts of Brooklyn foreclosure cases.