New York Codifies Pre-Foreclosure Filing Requirement

Foreclosure Mortgage Servicing

On July 31, New York Governor Andrew Cuomo signed AB 5582, which seeks to reduce the number of incomplete foreclosure cases that are filed, but stalled, awaiting information needed to move the cases to mandatory settlement conferences. To do so, the bill requires a foreclosure attorney who is filing a foreclosure complaint involving a home loan to sign and file a “certificate of merit” with the complaint, stating that, to the best of the attorney’s knowledge, information and belief, there is a reasonable basis for the commencement of such action and that the plaintiff is currently the creditor entitled to enforce the applicable mortgage documents. The attorney also must attach to the complaint or the certificate copies of the relevant debt instruments and any instruments of modification, extension, consolidation, and assignment. The new law allows for the filing of supplemental affidavits where the debt instrument is lost. The new requirements take effect August 30, 2013.  This law follows State Attorney General Eric Schneiderman’s enforcement effort to address similar problems – he sued at least one financial institution for allegedly failing to timely file requests for judicial intervention which would trigger court-supervised foreclosure settlement conferences.