Residential and Commercial Foreclosure Update – Executive Order 202.48
On July 6, 2020, Governor Cuomo issued Executive Order 202.48, which states, “The directive contained in Executive Order 202.28, as extended, that prohibited initiation of a proceeding or enforcement of either an eviction of any residential or commercial tenant, for nonpayment of rent or a foreclosure of any residential or commercial mortgage, for nonpayment of such mortgage, is continued only insofar as it applies to a commercial tenant or commercial mortgagor, as it has been superseded by legislation for a residential tenant, and residential mortgagor, in Chapters 112, 126, and 127 of the Laws of 2020”. Copies of the laws referenced in this provision of the Executive Order are enclosed.
Executive Order 202.48 also extends the provisions tolling the Statute of Limitations that began March 20, 2020 until August 5, 2020.
Based on the plain language of this Executive Order, residential mortgage foreclosures and evictions may be commenced so long as the Plaintiff complies with various newly enacted State laws, including Banking Law § 9-x. Banking Law 9-x details the requirements for lenders to offer forbearance to borrowers as outlined in our prior memorandum dated June 24, 2020. Banking Law 9-x also specifically provides that the forbearance requirement is deemed a “condition precedent” to commencement of a foreclosure action and failure to meet the requirement is available to borrowers as a defense to foreclosure. As a best practice, this information will need to be communicated to foreclosure counsel pre-first legal. Additionally, business records should be amply documented with efforts to make contact with a borrower, as well as discussions or offers pertaining to the forbearance. We anticipate that will be a highly litigated issue in the future, and the only way to demonstrate compliance will be to submit proof that forbearance options were offered to the borrower.
On July 7, 2020, Chief Administrative Judge Marks issued Administrative Order (AO) 143/20. A copy of the Order can be found here (or attached). AO 143/20 lifts the requirement of including an attorney affirmation when filing new foreclosure or eviction cases. However, AO 143/20 specifically states that the other provisions of AO 131/20 remain in full force and effect. AO 131/20 provides that cases commenced prior to March 16, 2020 continue to be stayed until further order of the court with only three exceptions:
Additionally, the new form notice to defendants/tenants in newly commenced actions informing them that they may be eligible for an extension of time to respond to the foreclosure complaint is still required.
We continue to seek clarification from the NYS Office of Court Administration (OCA) to confirm how and when pending residential foreclosures and evictions may proceed in accordance with the Governor’s latest Executive Order. As additional updates are provided by the Governor’s office and the courts in New York, we will continue to provide you with the most up-to-date information.
For more information contact:
Attorney: Natalie A. Grigg, Esq.
500 Bausch & Lomb Place Rochester, NY 14614