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New York courts see uptick in foreclosure filings.

by Chris on November 12, 2013

In the wake of a housing crisis New York’s chief justice imposed criteria aimed at curbing the volume of foreclosures. In October 2010 Chief Judge Jonathan Lippman created a affirmation requirement for the purpose of improving lender’s ability to vouch for the accuracy of their court papers, which had been mired in difficulties. The 2013 Report of the Chief Administrator of the Courts explains that once the affirmation requirement became mandatory the result was a dramatic drop in the number of foreclosure filings. Just as an example,  2010 reported 46,572 foreclosure filings juxtaposed with the 16,655 filed in 2011. Sounds successful, but the funny thing about economies is the necessity to strike a balance. Too many foreclosures is obviously not a good thing-but the opposite-a stalemate in foreclosures, has an equally negative impact.

The New York Law Journal relates the latest report from the Chief Administrative Judge A. Gail Prudenti has been met with mixed reviews. The report contains projected numbers for 2013 which, if accurate, 2013 would see more filings this year than the past two years combined. Prudenti acknowledges the increase brings a mix of both advantages and new challenges. An escalation in court filings equals an increase in the volume of mandatory status conferences, placing a burden on resources. Suffolk County Administrative Judge C. Randall Hinrichs conducted an interview where he expressed agreement that the status conferences are stretching resources. Meanwhile, chief of policy and planning for the courts, Judge Judy Harris Kluger, links the rise to better compliance and the improved housing market. Jacob Inwald, director of Foreclosure Prevention Litigation for Legal Services NYC speculates, more cynically, the filings may be accelerated to avoid compliance with incoming regulations. In January 2014 federal law is set to take effect and mortgage servicers will subject to the authority of the Consumer Financial Protection Bureau.

The glaring differences between Louisiana and New York should not discount the ability to gain insight from the situation. Conventional wisdom has always been that Louisiana is at least two years behind New York (mostly when it comes to fashion). When it comes to economic crisis, we should look to the Big Apple for guidance on what to do and what not to do. Does the housing scenario in New York have any parallels to our current situation in Louisiana? Does Louisiana have the same “affirmation” requirement for foreclosure filings to prevent “robo-signing?” Would such a requirement effectively freeze the housing market in Louisiana? As of the writing of this article it takes at least six months to get a foreclosed property to sheriff’s sale in New Orleans. In Jefferson Parish the delay is closer to eight or nine months. And what about the Consumer Financial Protection Bureau, is that something we can look forward to as well?

I’ve probably raised more questions than answers, but feel free to give your input in the comments section.

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