ALBANY – New York’s top bank regulator on Tuesday proposed amending state law to shorten the foreclosure process for homes with delinquent mortgages.
Department of Financial Services Superintendent Ben Lawsky, addressing mortgage bankers, said New York’s process averages 900 days from the date of filing to the sale of the property. That’s nearly a year longer than the national average, according to the department.
“The chronic nature of New York’s foreclosure problem is not a result of a new wave of defaulting homeowners,” Lawsky said. “Rather, the long tail of the crisis is due, in significant part, to problems in the way our state’s broken judicial foreclosure process is currently applied.”
In the foreclosure crisis from the 2008 recession and burst housing bubble, New York law was amended to require a settlement conference between the lender and homeowner to “negotiate in good faith.” Lawsky said those conferences are frequently plagued by delays that worsen homeowner prospects of keeping their residences as interest and penalties mount. It also hurts lenders and investors whose investments lose value, he said.