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More cuts hit foreclosure prevention assistance

The news was bad for foreclosure assistance programs when funding was cut from the New York state budget in March. The news got worse on April 12, when the governor vetoed $1.5 million that Democrats had set aside to continue the program.

Last week, Paul Riordan, Monroe County Foreclosure Settlement Conference referee,  announced his position would be eliminated as of May 16 due to budget constraints.

“I’ve been keeping it under wraps but this has been in the works since April 18,” Riordan said. “The judges have been working on it to make sure there’ll be no loss in service.”

Foreclosure settlement conference referees can make recommendations to a judge, facilitate loan modification and help stop foreclosure. After May 16, foreclosure settlement conferences pursuant to rule 3408 of the Civil Practice Law and Rules will be conducted by judicial law clerks — as they previously did in Monroe County before Riordan began hearing them early in 2010.

“We were getting good results and our program was working well but I think the solution Judge Doran and Judge Rosenbaum found is a good one,” Riordan explained. “They’re making the best of a bad situation. They’ve been working to make sure there is no loss in service.”

Riordan said despite the specialized knowledge and experience he gained in the position, he expects the judicial law clerks will be effective settlement conference referees. Conferences will continue to be held in the same location at the Hall of

Justice and the clerks will be specifically assigned to cases, so attorneys don’t have to worry.
Riordan has been reassigned to a new position in domestic violence court.

“It was a good program for everybody,” Empire Justice Center Senior Attorney Rebecca Case-Grammatico said of the unique settlement conferences Riordan held in foreclosure cases in Monroe County. “We had a system that worked well and now we don’t.”

Case-Grammatico’s foreclosure prevention unit must now determine when to stop taking new clients at a time when it estimates nearly 80,000 homes in the state are in foreclosure already and another 69,000 are at imminent risk of foreclosure.

Both Riordan and Case-Grammatico expect foreclosure filings to rise as attorneys for lending institutions get accustomed to new affirmation requirements required by Chief Judge Jonathan Lippman in October 2010.

“It’s a trifecta,” Case-Grammatico said. “The bottleneck is breaking open soon, foreclosure assistance agencies are closing and the court system is laying off the people who do this kind of work.”

Homeowners facing foreclosure can still go to housing counseling agencies but those agencies can’t help in court, which can be a very intimidating process for people unaccustomed to it.

“It’s not a good situation,” Case-Grammatico said. “Judges have made it clear they’re not pleased at having to do [foreclosure] settlement conferences.”

Empire Justice Center policy analyst Barbara van Kerkhove explained that it is crucial for homeowners to have an attorney representing them in court and not having one typically bogs the court down, too.

“We’re preparing for the worst case scenario, van Kerkhove said. “This hurts communities across the state.”

Gov. Andrew Cuomo said he vetoed the sparse funding left to foreclosure prevention agencies because it was a “new appropriation.”

Case-Grammatico said she wants to help as many people facing foreclosure proceedings as possible before December when the funding is cut off. Ironically, however, there are few people to assist until attorney affirmation documents are signed.

Unfortunately, once they are signed, it may be too late for foreclosure prevention program attorneys to help them.