The minutiae in New York foreclosures are endless, as is the creativeness and tenacity of defaulting borrowers.
New York decided some years ago that no home loan foreclosure could proceed beyond the stage of serving a complaint unless a mandatory settlement conference procedure was undertaken and completed, one way or another. But a mechanical glitch was encountered: some foreclosing plaintiffs were slow to file a request for judicial intervention (RJI) which is the vehicle to alert the court as to existence of the case, thereby triggering the conference process.
The answer to that was to mandate the prompt filing of a special RJI which could start the settlement conference procedure. And if somehow the special RJI was neglected and not filed? Might a defaulting borrower assault that miscue and even move to dismiss a foreclosure on that basis? It would and it has. [BAC Home Loans Servicing, L.P. v. Jackson, 159 A.D.3d 861, 74 N.Y.S.3d 59 (2d Dept. 2018)].
In deciding the motion to dismiss the court confirmed of course that pursuant to 22 NYCRR 202.12-a(b)(1), when proof of service of the summons and complaint is filed with the court, the plaintiff must file a specialized RJI for home loan foreclosures. It held, however, that the rule, does not provide that failure to so file will result in dismissal of the action. Therefore while it is a requirement, the penalty cannot be dismissal and it was so held.
The rules and traps will undoubtedly continue to propagate in New York, but not every one will be fatal. This one wasn’t.
Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2018), 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.