2023 New York Laws › CVP - Civil Practice Law and Rules › Article 34 - Calendar Practice; Trial Preferences › R3410 - Face-to-Face Meeting for Foreclosure of Reverse Cooperative Apartment Unit Loans.

Rule 3410. Face-to-face meeting for foreclosure of reverse cooperative
apartment  unit loans. (a) For purposes of this rule, default shall only
include a borrower's breach of an obligation under the reverse  mortgage
cooperative loan agreement, and shall not include death of the borrower,
except  as detailed in paragraph one of subdivision (i) of this rule, or
the borrower's permanent vacating of the cooperative unit.
(b) In any action involving  a  borrower's  default  under  a  reverse
cooperative  apartment  unit  loan,  as  defined  in  paragraph  (a)  of
subdivision one of section six-o of the banking law,  the  lender  shall
file  a  petition  with  the  supreme  court  of the county in which the
cooperative apartment is located stating that 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. Within ten days
of  the  date  of  service of the notice to the borrower, the petitioner
must file a specialized  request  for  judicial  intervention  with  the
clerk.  Within  sixty days of receipt of the notice or on such adjourned
date as has been agreed to by  the  parties,  the  court  shall  hold  a
mandatory  settlement  conference  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  his  or  her  cooperative
apartment  unit,  and evaluating the potential for a resolution or other
workout options may be agreed; or
2. whatever other purposes the court deems appropriate.
(c) At any meeting held pursuant to this  rule,  the  lender  and  the
borrower  shall  appear  in  person  or  by  counsel,  and  each party's
representative 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 the notice of default with the court, the court
shall send either a copy of the notice or the borrower's  name,  address
and  telephone  number  (if available) to a housing counseling agency or
agencies on a list designated  by  the  department  for  the  geographic
region  in which the borrower resides. Such information shall be used by
the designated housing counseling agency or agencies exclusively for the
purpose  of  making  the  borrower  aware  of  housing  counseling   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 meeting.
(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
regulations pertaining to the face-to-face meeting process;
2.  compliance  with  applicable  lending  and  servicing laws, rules,
regulations, investor  directives,  and  loss  mitigation  standards  or
options; and
3.  conduct  consistent  with  efforts  to  reach a mutually agreeable
resolution, including but not limited to, avoiding  unreasonable  delay,
appearing  at the meeting with authority to fully dispose of the matter,
avoiding  moving  forward  to  take  possession  while  loss  mitigation
applications   and   attempts   are   pending,  and  providing  accurate
information to the department and all 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
negotiate in good faith.
(g) Upon a finding by the court that the plaintiff failed to negotiate
in good faith pursuant to subdivision (f) of this rule, the court shall,
at a minimum, toll the accumulation and collection of  interest,  costs,
and  fees  during  any  undue  delay  caused by the plaintiff, and where
appropriate, the court may also impose one or more of the following:
1. compel production of any documents requested by the  court  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 attorney fees
and expenses to the defendant as a  result  of  plaintiff's  failure  to
negotiate in good faith; or
4. award any other relief that the court deems just and proper.
(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) This rule shall not apply if:
1. the borrower dies and there is no surviving borrower,  unless:  (i)
the  last  surviving  borrower's  spouse,  if  any, is a resident of the
property subject to foreclosure; or (ii) the last  surviving  borrower's
successor  in interest who by bequest or through intestacy, owns, or has
a claim to the ownership of the property subject to foreclosure, and who
was a resident of such property at  the  time  of  death  of  such  last
surviving  borrower;  or  the borrower does not reside in the unit after
such non-occupancy by the borrower as verified by  the  lender  and  the
lender  has  taken  action  as  required by subdivision eight of section
six-o of the banking law; or
2. a repayment plan or other workout consistent  with  the  borrower's
circumstances is entered into to bring the borrower's account current or
otherwise cure the default thus making a meeting unnecessary.