S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6143
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 10, 2021
                                ___________
 
 Introduced by M. of A. DINOWITZ -- read once and referred to the Commit-
   tee on Judiciary
 
 AN  ACT to amend the civil practice law and rules, in relation to manda-
   tory settlement conference in cooperative apartment  unit  foreclosure
   actions
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1.  The civil practice law and rules is amended  by  adding  a
 new rule 3410 to read as follows:
   RULE  3410.  MANDATORY  SETTLEMENT CONFERENCE IN COOPERATIVE APARTMENT
 UNIT FORECLOSURE ACTIONS. (A) FOR PURPOSES OF THIS  SECTION  "A  COOPER-
 ATIVE  APARTMENT  UNIT LOAN" MEANS A LOAN SECURED BY RIGHTS TO A COOPER-
 ATIVE APARTMENT REQUIRED TO RECEIVE AN ADDITIONAL PRE-DISPOSITION NOTICE
 PURSUANT TO SUBSECTION (F) OF SECTION 9--611 OF THE  UNIFORM  COMMERCIAL
 CODE.
   IN ADDITION TO SUCH OTHER NOTIFICATIONS AS MAY BE REQUIRED PURSUANT TO
 THE UNIFORM COMMERCIAL CODE, IN ANY FORECLOSURE ACTION INVOLVING A COOP-
 ERATIVE  APARTMENT UNIT LOAN, IN WHICH THE BORROWER IS A RESIDENT OF THE
 PROPERTY SUBJECT TO FORECLOSURE, THE LENDER SHALL FILE A  PETITION  WITH
 THE  SUPREME  COURT  OF THE COUNTY IN WHICH THE COOPERATIVE APARTMENT IS
 LOCATED STATING THE LOAN IS IN DEFAULT AND THE REASON FOR THE DEFAULT.
   THE PETITION MUST BE SERVED ON THE BORROWER PURSUANT TO SECTION  THREE
 HUNDRED  EIGHT  OF  THIS CHAPTER. THE LENDER SHALL FILE PROOF OF SERVICE
 WITHIN TWENTY DAYS OF SUCH SERVICE AND THE COURT SHALL HOLD A  MANDATORY
 CONFERENCE  WITHIN  SIXTY DAYS AFTER THE DATE WHEN PROOF OF SERVICE UPON
 THE BORROWER IS FILED WITH THE COUNTY CLERK OR ON SUCH ADJOURNED DATE AS
 HAS BEEN AGREED TO BY THE PARTIES, FOR THE PURPOSE OF HOLDING SETTLEMENT
 DISCUSSIONS PERTAINING TO THE RELATIVE RIGHTS  AND  OBLIGATIONS  OF  THE
 PARTIES UNDER THE LOAN DOCUMENTS, INCLUDING, BUT NOT LIMITED TO:
   1.  DETERMINING  WHETHER  THE  PARTIES  CAN REACH A MUTUALLY AGREEABLE
 RESOLUTION TO HELP THE BORROWER AVOID LOSING THEIR HOME, AND  EVALUATING
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09839-01-1

 A. 6143                             2
 
 THE POTENTIAL FOR A RESOLUTION IN WHICH PAYMENT SCHEDULES OR AMOUNTS MAY
 BE MODIFIED OR OTHER WORKOUT OPTIONS MAY BE AGREED TO, INCLUDING BUT NOT
 LIMITED TO, A LOAN MODIFICATION OR ANY OTHER LOSS MITIGATION OPTION; OR
   2. WHATEVER OTHER PURPOSES THE COURT DEEMS APPROPRIATE.
   (B)  AT  THE  INITIAL  CONFERENCE  HELD  PURSUANT TO THIS SECTION, ANY
 BORROWER CURRENTLY APPEARING PRO SE, SHALL BE  DEEMED  TO  HAVE  MADE  A
 MOTION  TO  PROCEED AS A POOR PERSON UNDER SECTION ELEVEN HUNDRED ONE OF
 THIS CHAPTER. THE COURT SHALL DETERMINE WHETHER SUCH PERMISSION SHALL BE
 GRANTED PURSUANT TO STANDARDS SET FORTH IN SECTION ELEVEN HUNDRED ONE OF
 THIS CHAPTER. IF THE COURT APPOINTS DEFENDANT COUNSEL PURSUANT TO SUBDI-
 VISION (A) OF SECTION ELEVEN HUNDRED  TWO  OF  THIS  CHAPTER,  IT  SHALL
 ADJOURN  THE  CONFERENCE TO A DATE CERTAIN FOR APPEARANCE OF COUNSEL AND
 SETTLEMENT DISCUSSIONS PURSUANT TO SUBDIVISION (A) OF THIS SECTION,  AND
 OTHERWISE SHALL PROCEED WITH THE CONFERENCE.
   (C)  AT  ANY CONFERENCE HELD PURSUANT TO THIS RULE, THE LENDER AND THE
 BORROWER SHALL APPEAR IN PERSON OR BY COUNSEL, AND EACH  PARTY'S  REPRE-
 SENTATIVE  AT  THE  MEETING  SHALL BE FULLY AUTHORIZED TO DISPOSE OF THE
 MATTER. IF THE BORROWER IS APPEARING WITHOUT COUNSEL,  THE  COURT  SHALL
 INFORM  THE  BORROWER  OF THE NATURE OF THE ACTION AND HIS OR HER RIGHTS
 AND RESPONSIBILITIES.  WHERE  APPROPRIATE,  THE  COURT  MAY  PERMIT  THE
 BORROWER  OR A REPRESENTATIVE OF THE BORROWER OR THE DEFENDANT TO ATTEND
 THE SETTLEMENT CONFERENCE TELEPHONICALLY OR BY VIDEO-CONFERENCE.
   (D) UPON THE FILING OF A REQUEST  FOR  JUDICIAL  INTERVENTION  IN  ANY
 ACTION  BROUGHT  PURSUANT TO THIS SECTION, THE COURT SHALL SEND EITHER A
 COPY OF SUCH REQUEST OR  THE  BORROWER'S  NAME,  ADDRESS  AND  TELEPHONE
 NUMBER  (IF  AVAILABLE)  TO A HOUSING COUNSELING AGENCY OR AGENCIES ON A
 LIST DESIGNATED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL FOR THE
 JUDICIAL DISTRICT IN WHICH THE BORROWER RESIDES. SUCH INFORMATION  SHALL
 BE  USED  BY THE DESIGNATED HOUSING COUNSELING AGENCY OR AGENCIES EXCLU-
 SIVELY FOR THE PURPOSE OF MAKING THE BORROWER  AWARE  OF  HOUSING  COUN-
 SELING  AND  FORECLOSURE  PREVENTION  SERVICES  AND OPTIONS AVAILABLE TO
 THEM.
   (E) THE COURT SHALL PROMPTLY SEND A NOTICE TO PARTIES ADVISING THEM OF
 THE TIME AND PLACE OF THE MEETING, THE PURPOSE OF THE  MEETING  AND  THE
 REQUIREMENTS  OF  THIS RULE. THE NOTICE SHALL BE IN A FORM PRESCRIBED BY
 THE COURT, AND SHALL ADVISE THE PARTIES OF THE DOCUMENTS THAT THEY SHALL
 BRING TO THE CONFERENCE.
   1. FOR THE LENDER, SUCH DOCUMENTS SHALL INCLUDE, BUT ARE  NOT  LIMITED
 TO:   (I) THE PAYMENT HISTORY; (II) AN ITEMIZATION OF THE AMOUNTS NEEDED
 TO CURE AND PAY OFF THE LOAN; (III) THE MORTGAGE AND NOTE OR  COPIES  OF
 THE  SAME;  (IV)  STANDARD  APPLICATION  FORMS AND A DESCRIPTION OF LOSS
 MITIGATION OPTIONS, IF ANY, WHICH MAY BE AVAILABLE TO THE BORROWER;  AND
 (V)  ANY  OTHER  DOCUMENTATION  REQUIRED  BY THE PRESIDING JUDGE. IF THE
 LENDER IS NOT THE OWNER OF THE  MORTGAGE  AND  NOTE,  THE  LENDER  SHALL
 PROVIDE THE NAME, ADDRESS AND TELEPHONE NUMBER OF THE LEGAL OWNER OF THE
 MORTGAGE  AND NOTE. FOR CASES IN WHICH THE LENDER OR ITS SERVICING AGENT
 HAS EVALUATED OR IS EVALUATING ELIGIBILITY FOR  HOME  LOAN  MODIFICATION
 PROGRAMS  OR OTHER LOSS MITIGATION OPTIONS, IN ADDITION TO THE DOCUMENTS
 LISTED ABOVE, THE LENDER SHALL BRING A SUMMARY  OF  THE  STATUS  OF  THE
 LENDER'S OR SERVICING AGENT'S EVALUATION FOR SUCH MODIFICATIONS OR OTHER
 LOSS   MITIGATION  OPTIONS,  INCLUDING,  WHERE  APPLICABLE,  A  LIST  OF
 OUTSTANDING ITEMS REQUIRED FOR THE BORROWER TO COMPLETE ANY MODIFICATION
 APPLICATION, AN EXPECTED DATE OF COMPLETION OF THE LENDER'S OR  SERVICER
 AGENT'S  EVALUATION,  AND,  IF  THE  MODIFICATION  OR MODIFICATIONS WERE
 DENIED, A DENIAL LETTER OR ANY OTHER DOCUMENT EXPLAINING THE  REASON  OR
 REASONS  FOR DENIAL AND THE DATA INPUT FIELDS AND VALUES USED IN THE NET

 A. 6143                             3
 
 PRESENT VALUE EVALUATION. IF THE MODIFICATION WAS DENIED ON THE BASIS OF
 AN INVESTOR RESTRICTION,  THE  PLAINTIFF  SHALL  BRING  THE  DOCUMENTARY
 EVIDENCE  WHICH PROVIDES THE BASIS FOR THE DENIAL, SUCH AS A POOLING AND
 SERVICING AGREEMENT.
   2. FOR THE BORROWER, SUCH DOCUMENTS SHALL INCLUDE, BUT ARE NOT LIMITED
 TO,  IF APPLICABLE, INFORMATION ON CURRENT INCOME TAX RETURNS, EXPENSES,
 PROPERTY TAXES AND PREVIOUSLY  SUBMITTED  APPLICATIONS  FOR  LOSS  MITI-
 GATION;  BENEFITS  INFORMATION;  RENTAL  AGREEMENTS  OR  PROOF OF RENTAL
 INCOME; AND ANY OTHER DOCUMENTATION RELEVANT TO THE PROCEEDING  REQUIRED
 BY THE PRESIDING JUDGE.
   (F)  BOTH THE LENDER AND THE BORROWER SHALL NEGOTIATE IN GOOD FAITH TO
 REACH A MUTUALLY AGREEABLE RESOLUTION, INCLUDING BUT NOT  LIMITED  TO  A
 RE-PAYMENT  AGREEMENT,  OR  ANY  OTHER  LOSS  MITIGATION,  IF  POSSIBLE.
 COMPLIANCE WITH THE OBLIGATION TO NEGOTIATE IN GOOD  FAITH  PURSUANT  TO
 THIS  RULE  SHALL  BE  MEASURED  BY  THE  TOTALITY OF THE CIRCUMSTANCES,
 INCLUDING BUT NOT LIMITED TO THE FOLLOWING FACTORS:
   1. COMPLIANCE WITH THE REQUIREMENTS OF THIS RULE AND APPLICABLE  COURT
 RULES,  COURT  ORDERS,  AND  DIRECTIVES  BY  THE  COURT  OR ITS DESIGNEE
 PERTAINING TO THE SETTLEMENT CONFERENCE PROCESS;
   2. COMPLIANCE WITH APPLICABLE LENDING MORTGAGE SERVICING LAWS,  RULES,
 REGULATIONS,  INVESTOR  DIRECTIVES,  AND  LOSS  MITIGATION  STANDARDS OR
 OPTIONS CONCERNING LOAN MODIFICATIONS; AND
   3. CONDUCT CONSISTENT WITH  EFFORTS  TO  REACH  A  MUTUALLY  AGREEABLE
 RESOLUTION,  INCLUDING  BUT NOT LIMITED TO, AVOIDING UNREASONABLE DELAY,
 APPEARING AT THE SETTLEMENT CONFERENCE WITH AUTHORITY TO  FULLY  DISPOSE
 OF THE MATTER, AVOIDING MOVING FORWARD WITH A JUDICIAL OR A NON-JUDICIAL
 FORECLOSURE  PROCEEDING  WHILE LOSS MITIGATION APPLICATIONS AND ATTEMPTS
 ARE PENDING,  AND  PROVIDING  ACCURATE  INFORMATION  TO  THE  COURT  AND
 PARTIES.
   NEITHER  OF THE PARTIES' FAILURE TO MAKE THE OFFER OR ACCEPT THE OFFER
 MADE BY THE OTHER PARTY IS SUFFICIENT TO ESTABLISH A FAILURE TO  NEGOTI-
 ATE IN GOOD FAITH.
   (G) THE LENDER MUST FILE A NOTICE OF DISCONTINUANCE WITHIN NINETY DAYS
 AFTER  ANY  SETTLEMENT  AGREEMENT  OR  LOAN  MODIFICATION HAS BEEN FULLY
 EXECUTED OR A DETERMINATION BY THE COURT THAT THE SETTLEMENT FORECLOSURE
 CONFERENCE PROCESS HAS CONCLUDED IF THE LENDER ELECTS TO USE THE NON-JU-
 DICIAL FORECLOSURE METHOD.
   (H) A PARTY TO A DEFAULT ACTION MAY NOT CHARGE, IMPOSE,  OR  OTHERWISE
 REQUIRE  PAYMENT  FROM  THE  OTHER PARTY FOR ANY COST, INCLUDING BUT NOT
 LIMITED TO ATTORNEYS' FEES, FOR APPEARANCE AT OR  PARTICIPATION  IN  THE
 SETTLEMENT CONFERENCE PROCESS.
   (I)  THE COURT MAY DETERMINE WHETHER EITHER PARTY FAILS TO COMPLY WITH
 THE DUTY TO NEGOTIATE IN GOOD FAITH PURSUANT TO SUBDIVISION (F) OF  THIS
 SECTION  AND ORDER REMEDIES PURSUANT TO SUBDIVISIONS (J) AND (K) OF THIS
 SECTION, EITHER ON MOTION OF ANY PARTY OR SUA SPONTE ON  NOTICE  TO  THE
 PARTIES, IN ACCORDANCE WITH SUCH PROCEDURES AS MAY BE ESTABLISHED BY THE
 COURT  OR  OFFICE  OF  COURT ADMINISTRATION. A REFEREE, JUDICIAL HEARING
 OFFICER, OR OTHER STAFF DESIGNATED BY THE COURT TO OVERSEE  THE  SETTLE-
 MENT CONFERENCE PROCESS MAY HEAR AND REPORT FINDINGS OF FACT AND CONCLU-
 SIONS OF LAW, AND MAY MAKE REPORTS AND RECOMMENDATIONS FOR RELIEF TO THE
 COURT CONCERNING ANY PARTY'S FAILURE TO NEGOTIATE IN GOOD FAITH PURSUANT
 TO SUBDIVISION (F) OF THIS SECTION.
   (J)  UPON  A  FINDING  BY THE LENDER FAILED TO NEGOTIATE IN GOOD FAITH
 PURSUANT TO SUBDIVISION (F) OF THIS SECTION, AND ORDER REMEDIES PURSUANT
 TO THIS SUBDIVISION AND SUBDIVISION (K) OF THIS SECTION THE COURT SHALL,
 AT A MINIMUM, TOLL THE ACCUMULATION AND COLLECTION OF  INTEREST,  COSTS,

 A. 6143                             4
 
 AND  FEES  DURING ANY UNDUE DELAY CAUSED BY THE LENDER, AND WHERE APPRO-
 PRIATE, THE COURT MAY ALSO IMPOSE ONE OR MORE OF THE FOLLOWING:
   1.  COMPEL PRODUCTION OF ANY DOCUMENTS REQUESTED BY THE COURT PURSUANT
 TO SUBDIVISION (E) OF THIS SECTION OR THE COURT'S  DESIGNEE  DURING  THE
 SETTLEMENT CONFERENCE;
   2.  IMPOSE  A CIVIL PENALTY PAYABLE TO THE STATE THAT IS SUFFICIENT TO
 DETER REPETITION OF THE CONDUCT AND IN AN AMOUNT NOT TO  EXCEED  TWENTY-
 FIVE THOUSAND DOLLARS;
   3. THE COURT MAY AWARD ACTUAL DAMAGES, FEES, INCLUDING ATTORNEYS' FEES
 AND  EXPENSES TO THE BORROWER AS A RESULT OF LENDER'S FAILURE TO NEGOTI-
 ATE IN GOOD FAITH; OR
   4. AWARD ANY OTHER RELIEF THAT THE COURT DEEMS JUST AND PROPER.
   (K) UPON A FINDING BY THE COURT THAT THE BORROWER FAILED TO  NEGOTIATE
 IN  GOOD  FAITH  PURSUANT  TO SUBDIVISION (F) OF THIS SECTION, THE COURT
 SHALL, AT A MINIMUM, REMOVE THE CASE FROM THE  CONFERENCE  CALENDAR.  IN
 CONSIDERING  SUCH A FINDING, THE COURT SHALL TAKE INTO ACCOUNT EQUITABLE
 FACTORS INCLUDING, BUT NOT LIMITED TO, WHETHER THE BORROWER WAS  REPRES-
 ENTED BY COUNSEL.
   (L)  AT THE FIRST SETTLEMENT CONFERENCE HELD PURSUANT TO THIS SECTION,
 IF THE BORROWER HAS NOT FILED AN ANSWER OR MADE A PRE-ANSWER  MOTION  TO
 DISMISS, THE COURT SHALL:
   1. ADVISE THE BORROWER OF THE REQUIREMENT TO ANSWER THE COMPLAINT;
   2. EXPLAIN WHAT IS REQUIRED TO ANSWER A COMPLAINT IN COURT;
   3.  ADVISE  THAT IF AN ANSWER IS NOT INTERPOSED THE ABILITY TO CONTEST
 THE FORECLOSURE ACTION AND ASSERT DEFENSES MAY BE LOST; AND
   4. PROVIDE  INFORMATION  ABOUT  AVAILABLE  RESOURCES  FOR  FORECLOSURE
 PREVENTION ASSISTANCE.
   (M)  A  DEFENDANT  WHO  APPEARS  AT  THE SETTLEMENT CONFERENCE BUT WHO
 FAILED TO FILE A TIMELY ANSWER, PURSUANT TO RULE THREE HUNDRED TWENTY OF
 THIS CHAPTER, SHALL BE PRESUMED TO HAVE  A  REASONABLE  EXCUSE  FOR  THE
 DEFAULT  AND SHALL BE PERMITTED TO SERVE AND FILE AN ANSWER, WITHOUT ANY
 SUBSTANTIVE DEFENSES DEEMED TO HAVE BEEN WAIVED WITHIN  THIRTY  DAYS  OF
 INITIAL  APPEARANCE  AT  THE SETTLEMENT CONFERENCE. THE DEFAULT SHALL BE
 DEEMED VACATED UPON SERVICE AND FILING OF AN ANSWER.
   (N) ANY MOTIONS SUBMITTED BY THE PLAINTIFF OR DEFENDANT SHALL BE  HELD
 IN  ABEYANCE  WHILE THE SETTLEMENT CONFERENCE PROCESS IS ONGOING, EXCEPT
 FOR MOTIONS CONCERNING COMPLIANCE WITH THIS RULE  AND  ITS  IMPLEMENTING
 RULES.
   NOTHING  IN  THIS  SECTION SHALL IMPAIR A LENDER WHO HAS COMPLIED WITH
 THIS SECTION FROM PROCEEDING WITH A JUDICIAL OR A NON-JUDICIAL  FORECLO-
 SURE PURSUANT TO ARTICLE NINE OF THE UNIFORM COMMERCIAL CODE.
   § 2. This act shall take effect immediately.