Law will help homeowners in legal limbo

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Consumer attorney Rebecca Case Caico knows of a foreclosure complaint that was filed in 2009, and the homeowner’s first settlement conference wasn’t  held until 2013 — four years later.

That’s one example of the thousands of inactive foreclosure cases across in New York that are part of the “shadow docket” that has left homeowners petrified of losing their homes and frustrated because they are unable to do anything as their cases sit languishing.

Besides the lengthy delay — and the fear and stress experienced — homeowners’ debt keeps piling up, to the point where it’s virtually impossible to overcome, Case Caico said.

That’s assuming the homeowners, frustrated by a lack of contact with the banks, haven’t walked away from the problem in frustration, leaving neighborhoods devastated.

“It’s no longer a surprise for us to see someone walk in who is three years behind,” said Case Caico, who is senior staff attorney at the Empire Justice Center’s Rochester office. “This doesn’t help the homeowner at all. The homeowner is stuck in this legal limbo.”

But Case Caico said help may be on the way.

A bill that helps homeowners at risk of foreclosure receive the help they need sooner was signed into law last week by Gov. Andrew Cuomo.

The “shadow docket” law aims to help homeowners receive court-supervised mediation quickly so they can obtain affordable loan modifications that help them stay in their homes.

The law, which is scheduled to take effect next month, requires lenders to demonstrate that a home should be in foreclosure. Lawyers for mortgage lenders also must obtain a certificate of merit, which has to be filed at the beginning of the foreclosure process and not the end — months and sometimes years later.

The certificate in essence certifies a reasonable basis for beginning a foreclosure action is in place.

New Yorkers for Responsible Lending estimate that 92 foreclosure cases enter the shadow docket each day.

“It’s a huge help,” Case Caico said. “The time frame is shorter and people have a better understanding of what resources are available to them.”

The law also goes beyond helping homeowners in foreclosure, said Kristin Keefe, senior attorney at the center’s Albany office.

“Not only should this law help homeowners, we expect it to positively impact neighborhoods and communities as well by moving foreclosures on vacant and abandoned properties more swiftly,” Keefe said in a statement.

The “shadow docket” legislation is one of more than 100 bills Cuomo signed into law last week.

Among those is legislation strengthening the penalties on those who assault prosecutors while they are performing official duties. The charge is elevated to a class D felony from a misdemeanor.