The most likely defense that occurs in New York mortgage foreclosure cases falls under Civil Practice and Laws (CPLR) Section 3215, and is a protection against borrower’s that default.
Everyone knows that there are tens of thousands of active foreclosure cases in New York, with a large percentage of those in Long Island, New York. What several people do not know is that if you do not answer the Summons by hiring an attorney or drafting the answer yourself, the Bank has only one year to file a default and move for judgment against you.
During the beginning of the case it may be excluded, and that is any conferences being held pursuant to CPLR 3408. This statute requires the bank to notify the Court that the action involves a foreclosure, and that a settlement conference is set up within 45 days of filing the affidavit of service of the Summons.
Provided the bank timely notifies the court, and the court sets up one or more conferences, that time will be excluded from the bank’s year because they are legally not allowed to move forward without court permission. Some counties give permission after the first conference, regardless if the property owner showed up. Others will give the property owner more than one chance to appear, and most will give several conferences if the property owner appears and attempts to resolve the foreclosure by loan modification, short sale or deed in lieu of foreclosure.
Once the Court allows the Bank to move forward, which usually is noted “FSC held” on Ecourts, a public site showing the history of the case, the bank has one year to take proceedings for judgment. This means that they have to submit an Order or motion to the court within one year of that date. If they fail to do so, the case should be dismissed automatically unless the bank shows sufficient cause on why it took extensive time.
CPLR 3215(c) states:
“(c) Default not entered within one year. If the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed. A motion by the defendant under this subdivision does not constitute an appearance in the action.”
In our experience, the banks have violated this one year time frame in over half of the cases, and in another quarter of the cases, failed to move forward once receiving a default. Judges were dismissing cases pursuant to CPLR 3215 in 2007-2009, but once the floodgate was opened and thousands of additional cases began pouring into all counties in New York, the judges began looking the other way.
We have had many decisions where the Court rules against our application on the basis that we cannot move for dismissal without vacating a default. We have several cases on appeal arguing that one should not have to vacate a default in order to take advantage of a civil law that only applies when you are in default. The Appellate Division routinely upholds these arguments, but the local trial courts seem concerned with clearing their backlog than complying with the letter of the law.
If you have a case where the bank attorney took more than one year to proceed, you may be able to get the entire action dismissed. And if more than six years has elapsed, they will be unable to bring the action again, and you may have the mortgage lien dismissed pursuant to RPAPL 1501(4).
Whether you need a foreclosure defense lawyer or counsel for real estate litigation, be sure to call our firm at (516) 246-2449.