Saturday, August 18, 2012

Foreclosures & Failure to Prosecute

Once a residential foreclosure matter is released from the Foreclosure Settlement Conference the Plaintiff is expected to file a motion requesting a Court order appointing a Referee to compute the total amount due the Plaintiff on the underlying debt. While you'd expect a the bank and their attorneys to file the motion quickly, more times then not there is an extensive delay. 

Prior to filing a motion the Plaintiff attorney must receive an OCA Affidavit from their client and then sign an OCA Affirmation. If the Plaintiff attorney experiences a delay in receiving that affidavit or if there is an issue with standing or the bank's paperwork that precludes the attorney from signing the OCA Affirmation the attorney is unable to file the motion. 

When a motion isn't filed it remains in the foreclosure part and therefore in that part's inventory. Over the past 18 months or so these parts have received pressure to clean up their inventory. As a result, these parts have started to dismiss cases for failure to prosecute pursuant to CPLR 3215 (if an answer was not filed) or CPLR 3216 (if an answer was filed). Every county differs slightly in their approach. Some hold foreclosure status conferences whereby a Judge or Referee will question a bank attorney on the status of the case and pressure them to move their case along. Other counties (most notably Westchester County) schedule dismissal calendars where Plaintiff attorneys that cannot represent on the record that they have received the OCA Affidavit have their cases dismissed. 

As you can imagine this process drives bank firms crazy and creates numerous additional court appearances. While it may provide some temporary assistance to homeowners 99% of the time the action will eventually be restarted. The only party that really benefits if the Court which can remove their cases from inventory.

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