9-2-21 Residential Foreclosure Update

On September 2, 2021, Governor Kathy Hochul signed into law the most recent amendment to the “COVID-19 Emergency Eviction and Foreclosure Prevention Act.” (“the Act”).

While the vast majority of the Act remains the same, one of most significant amendments is that the stay period has been extended from August 31, 2021 to January 15, 2022 in the event a borrower returns a Hardship Declaration. This remains in effect both for Hardship Declarations that have already been filed as well as those that are being sent with the 90 day notices. The language of the Hardship Declaration has been updated to include this new deadline, and the Office of Court Administration has until September 17, 2021 to post the Hardship Declarations to its website.

Additionally, the other significant change to the Act is the addition of language allowing a foreclosing party to challenge the validity of the hardship. Wording pertaining to this new right has been added to the Hardship Declaration. To challenge an alleged hardship, the Plaintiff in a foreclosure action will be required to file a motion, attesting that it has a good faith belief that the Defendant has not experienced a hardship, on notice to the Defendant. Upon receipt of the motion, the Court will schedule a hearing to determine the validity of a Defendant's hardship.

As a result of the foregoing, there is a continued obligation that a foreclosing party, or agent of a foreclosing party must file an affidavit at the time of commencement (1)attesting to the service of the Hardship Declaration with the notice provided to the mortgagor under Sections 1303 and 1304 of the Real Property Actions and Proceedings Law, or (2) attesting that at the time of commencement, the foreclosing party believes in good faith that the hardship certified in the hardship declaration does not exist.

Pre-Referral Notice Requirements Remain the Same

As set forth in the original version of the Act, for any cases where the 90-Day Notice has not been mailed, the new law requires that the Hardship Declaration must be sent with the 90-Day Notice that is required under Real Property Action and Proceedings Law 1304.

We understand that this presents a conflict with the wording of Real Property Actions and Proceedings Law 1304 that requires the 90-Day Notice to be mailed in a separate envelope. However, as this is the most recent law in effect until January 15, 2022, we recommend strict compliance with this instruction to mail the two documents together. From a litigation standpoint, we believe the court will be more understanding to this because the current law is in response to COVID.

Judgment Granted – Pre Sale Conference Requirement Remains the Same

In cases with judgment granted but sale not held, the court is required to stay the sale at least until the court holds a conference, when applicable. If the mortgagor submits a hardship declaration prior to sale, then the sale is stayed until January 15, 2022.

Please do not hesitate to reach out to the below contact to discuss this further.

For more information contact:

Attorney: Natalie A. Grigg, Esq.

Phone: 585-445-2610

Email: ngrigg@woodsdefaultservices.com