Slowly but surely New York State, like the federal government, is beginning to rein in the banking giants who have abused consumers for decades.
The latest move affords a modicum of relief to homeowners facing foreclosure. "It's a small step," said Assemblyman Fred Thiele, "But an important one."
The bill, hopefully, will put an end to the state's "shadow docket." Banks on the verge of foreclosing a mortgage sometimes sit on the paperwork for months rather than file in court – and charge the embattled homeowners with interest and fees in the interim.
"The main focus is to require a certificate of merit – a mandatory conference," Thiele said. Such conferences in the perfect world will lead to more negotiated settlements and help ease the backlog on court dockets, estimated to be at least 12,000 and as many as 25,000 cases.
New York has had a court-supervised mediation process in place for some time that was meant to give delinquent mortgage holders a chance to renegotiate. But many were stymied because once a bank filed foreclosure papers the settlement negotiation process was short-circuited.
Judge Jonathan Lippman and State Attorney General Eric Schneiderman proposed the foreclosure relief measure, Thiele said. He pointed out there was "widespread bipartisan support" in the legislature, an indication that lawmakers recognize that "an un-level playing field" exists.