What is a Foreclosure Settlement Conference?

After a bank files a foreclosure complaint against you the court will send you a notice to attend a foreclosure settlement conference. All of the bank's motions will be held in abeyance until the settlement conference is marked held and the case is referred to a judge or IAS part. In simple words the bank cannot continue to foreclosure on your home until the court is satisfied that the delinquent payments can be worked out through a compromise or a solution. An attempt to reach this compromise or solution is made at this settlement conference.

The following are a few typical questions that I have received in the past:

1. Who is in charge of the Settlement Conference? Who oversees the mediation?

This answer varies depending on the county and courtroom. In Westchester or Queens, for example, one of three court appointed referees will oversee the conference. In Kings (Brooklyn) you may see a judge or a court appointed referee. In Nassau you will meet with a bank attorney and simply report your discussions to a clerk.

2. Is Mediation helpful? Should I attend?

Mediation is generally helpful and you should always attend the conference. The bank attorney at the conference should come prepared with important info on your loan and your delinquency. They will also come with a list of numbers (phone and fax) that will tell you where to send your paperwork and who you can follow up with to ensure it was received. If you don't attend the conference will be moved along and the bank's foreclosure process will speed up. The conference is a great (if not the only) place to learn about your options and receive the correct direction in which to head.

3. Do I need a lawyer? Will one be provided for me?

A pro-bono lawyer may be available to help you. Typically at least one pro-bono is floating around and is scheduled to help homeowners who seek assistance. It is really up to you as to whether you'd like an attorney with you. Attorneys that work mainly in foreclosure law understand the system. They will know what paperwork and information is important. In addition, depending on the court, an attorney can make all of the appearances for you so you don't need to miss work. If you are great with paperwork and fully understand the basics of real estate law and mortgages you can probably handle the conference stage on your own. If you feel uneasy taking on such a task on your own it is probably best to find a foreclosure defense attorney. Make sure they have experience working with loan modification applications and have a firm grasp of foreclosure law.

4. Can the bank take my home during one of these conference?

No. The bank can do nothing until the conferences are over and even at that point there is a 45 day stay imposed prior to the bank being allowed to even file a motion. Once the motion is filed you still have a minimum of a few months before a bank has a final judgment against you or your home.

5. Do banks really negotiate with me at the conference?

Banks are supposed to negotiate in good faith at the conference. Courts will generally hold them to it. What exactly "good faith" means varies from court to court and situation to situation. Very rarely does a true negotiation take place at the conference because banks need to verify your financials and other information. A bank will have a difficult time stating that they refuse to negotiate or accept packets, however they are not forced to modify your loan or permit a short sale. They are expected to review all of your information and where possible compromise.

I hope this post provides adequate information regarding the Settlement Conference stage. If you have any further questions please email me directly at AFriedman@PulversThompson.com.