New York's Consumer Bill of Rights (CBOR) was implemented to protect homeowners facing foreclosure. New York has been among the states with lengthy foreclosure processes, averaging roughly 1,070 days. The CBOR is part of a comprehensive plan by state leaders to improve these processes by reducing abandoned properties, encouraging lenders to propose alternatives to foreclosure, and protecting property values. A foreclosure is a type of lawsuit; therefore, it is critical to retain an attorney with experience in foreclosure defense. The CBOR outlines the many rights that consumers have throughout the stages of the process.

Rights Applicable Throughout the Process

In New York, new laws enable lower-income homeowners facing foreclosure to be appointed legal counsel. Always consult your attorney prior to signing any documents. Remember that if ordered to appear in court, it is important to do so to avoid potential default judgments or assumptions that the property is abandoned. You have a right to remain in the home until specifically ordered to vacate. If at any time, you feel you have been subjected to fraud or harassment, notify your attorney or New York Department of Financial Services. You have a right to pay the balance of the loan in full to avoid foreclosure and to negotiate potential settlements with the plaintiff.

Rights Applicable Early in the Process

Plaintiffs must notify you of an intent to foreclose 90 days before a lawsuit is filed. The plaintiff must properly “serve” you with a Summons and Complaint. You are then able to respond with an answer that allows you to state available defenses. You may consider all available mitigation options. The plaintiff must provide you with details of resources available for mitigation. If you submit an application for mitigation, the plaintiff must review and consider it.

Settlement Conference

Defendants have rights to participate in any court proceedings including a mandatory settlement conference. This meeting is attended by the parties and your attorney, where you are informed of the details of the lawsuit. If you did not submit an answer with a defense, you may receive additional time to do so at this meeting. The parties are required to negotiate in a manner that is fair and honest, referred to as acting in “good faith”. Parties that do not adhere to “good faith” practices may face penalties.

During the Settlement, Judgement & Sale

If a settlement is reached, the plaintiff must lift the designation indicating the property is being disputed. You may be liable for any tax ramifications resulting from a settlement. If a foreclosure judgment and sale is ordered, plaintiffs may require you to vacate the property. If the property is sold for a price that exceeds your debt, you have the right to submit an application to the court requesting them to consider your eligibility for excess funds. If the property is sold for less than the balance owed, lenders may pursue a judgment ordering you to pay this deficiency, which you have a right to contest.