New Affirmation Rule For New York Foreclosures


15 December, 2010


Mortgage Lender and Servicer Alerts

Most servicers will likely have heard about this by now – foreclosure attorneys were compelled to contact their clients about it in any event and we sent a number of e-mails on the subject and continue to do so.  The purpose of this special alert, though, is to put the new mandate in context and bring it to the attention of commercial servicers to whom it would otherwise not relate.

Just to restate the requirement in a nutshell:

Applying solely to residential foreclosure actions (one to four family houses) and as of October 20, 2010, counsel to the foreclosing plaintiff must file an affirmation certifying that counsel has taken reasonable steps, inclusive of inquiry to the lender and careful review of the papers in the case, to verify the accuracy of documents filed in support of the foreclosure action.  The affirmation form promulgated by the New York State Court System requires the attorney to cite a date upon which counsel spoke to a named person on behalf of the plaintiff, noting that person’s title whereby that individual confirmed a review of the various documents in the case.  The attorney then goes on to affirm that based upon that communication and a personal inspection of the papers, together with other diligent inquiry, the attorney certifies that all is accurate.

This is to be used near the beginning of the case and for existing matters, at the directed stage and in any event prior to the foreclosure sale.

This is a burden shared by counsel and the servicer.  Counsel becomes personally responsible for supporting the accuracy, and the servicer will have to have knowledgeable staff ready to confirm the accuracy of the documentation based upon a specific review.

All of this, of course, comes from the latest crisis whereby some servicers conceded that persons reviewing or signing documents really had no knowledge (or little knowledge) of that documentation and that some notarizations may have been defective.  So this new affirmation requirement is just one in a continuing series of impositions which add paper, time and sometimes confusion to the foreclosure process in New York.  While this aspect will be far less time consuming than virtually all of the other new statutory requirements, it still adds yet another layer.

As far as commercial servicers are concerned, this new affirmation stage does not apply.  However, all the courts are not quite clear on this yet, and even when they become fully informed about it, they sometimes do not distinguish between a commercial and a residential case.  This can result in a commercial foreclosure being stalled based upon a demand by the court for the affirmation – even though it is not required.  While counsel can, and will of course advise the court of this, how quickly the court then responds is problematic.

For servicers who continue to wonder about the dismaying pace of foreclosures in New York, this new event adds unpalatable enlightenment.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.