After months of intensive lobbying by lawmakers and attorneys, Governor Andrew Cuomo late last month signed a bill (A.5619/S.5160) into law will protect defendants in foreclosure court from a legal loop-hole in regards to raising the defense of “standing.”
Assemblymember Helene Weinstein (D-Flatlands, Sheepshead Bay) and State Sen. Brian Kavanagh (D-Northern Brooklyn, Lower Manhattan) sponsored the measure, which amends Article 13 in Real Property Actions & Proceedings and allows defendants more leeway to bring up the defense of “standing” in foreclosure court.
“More homeowners will rightfully keep their homes, now that the governor has signed my bill (A.5619) into law,” said Weinstein.
As the law stood previously, if a defendant didn’t know who actually owned their mortgage and wanted to challenge their plaintiff’s standing to sue to foreclosure, they could only do so within 30 days. If homeowners didn’t contest within the allotted time frame, they would waive their right to contest later on in the court process.
This led to some instances of successful lawsuits brought against homeowners by banks who weren’t permitted to do is in the first place, according to Weinstein.
“In reality, many homeowners do not even understand the suit papers served against them, and/or do not hire a lawyer until it is too late to raise lack of standing as a defense. The law was in need of a significant alteration to permit this defense to be raised at any time in the litigation,” Weinstein said.
Among those lobbying Cuomo to sign the legislation included the New York State Foreclosure Defense Bar and the Empire Justice Center, who sent letters to the governor in October, pleading him to act on the legislation.
In Empire Justice Center’s letter to Cuomo, the law firm described the Article 13 section by stating it functioned as “a ‘gotcha’ statute,” because a technical error could open a homeowner to the risk of losing their home to the wrong party.
Also lobbying for Cuomo to sign the bill was City Council Member Robert Cornegy Jr. (D-Bedford-Stuyvesant, Northern Crown Heights).
“The foreclosure crisis may seem over for Main Street, but its lingering effects are still felt in communities of color. Perverse schemes like deed theft, deed fraud, and mortgage scams are adding to the stress of holding on to a home in a changing city, and we must ensure property owners have the tools they need to hold on to their homes,” said Cornegy, Chair of Housing and Buildings Committee.
Cornegy had also sent the governor a letter in October, co-signed by 26 fellow council members, urging him to sign the legislation.
“Court proceedings are difficult and complex,” Cornegy said. “I thank Governor Cuomo for signing this bill, which will enhance the package of Deed Theft bills signed earlier this year, ensuring greater protection for homeowners.”
The bill also found immense support from Assemblymember Tremaine Wright (D-Bedford-Stuyvesant, Northern Crown Heights) and State Sen. Velmanette Montgomery (D-Fort Greene, Boerum Hill, Red Hook, Bedford-Stuyvesant, Sunset Park, Gowanus, Park Slope) both of whose district has been rocked by foreclosures in recent years.
