The settlement conference mandate for home loan foreclosures in New York begets some interesting and sometimes vexing situations. An intriguing one arises when the borrower dies. Who then is entitled to a conference?
A recent case addressed some issues and offers some pointed guidance. [Generations Bank v. Sciotti, 43 Misc.3d 578, 982 N.Y.S.2d 721 (Sup. Ct. 2014)].
If a relative who inherits the property does not reside there, no conference is required. If, however, the inheriting relative does live at the property, then a conference is mandated. And the negotiations must be conducted in good faith just as they would have been had the borrower been alive.
Critically, though, the inheriting resident relative need not be treated as if he assumed the note and mortgage; rather he remains as a non-party to that. He can, of course, request permission to assume the mortgage, but if that request is denied – and the lender is not obliged to allow an assumption – then the inheriting resident relative is not entitled to a loan modification review.
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.