Homeowners in Queens, and particularly in Jamaica, have been among the hardest hit in the state during the housing foreclosure crisis.
And in April, the courts in the borough will begin a pilot program aimed at speeding up the process by which people can rework their loan agreements in an effort to stay in their homes.
The program is being tried in cooperation with Bank of America, Chase, Citibank and Wells Fargo, four of the largest mortgage lenders in the country.
Paul Lewis, an official with the state court system, said the banks have agreed to staff future settlement conferences with officials who have the authority, on the spot, to rework or modify the terms of loans, rather than have homeowners fall farther behind in their payments as court proceedings drag on.
The aim, he said, is to replace an endless paper chase with a settlement conference between two parties ready to go.
“Right now it’s a delay that goes back and forth with people looking for documents,” Lewis said. “We’re going to make sure weeks before a case comes on the calendar that [banks] will have all the documents that they use to review a loan, so that when they come to the table they can put an offer there.”
Lewis said the idea sprang from a task force on foreclosure set up by the New York Bar Association, and April Neubauer, the attorney in charge of civil practice for the Queens Legal Aid Society, said the program is a positive development with a lot of promise.
“The project will be to ensure that cases which appear on the docket for settlement conferences actually get down to settlement and modification,” Neubauer said. “Everyone will have all the right players in the right place at the same time. Someone from the bank will be there to settle the case on the spot.”
Lewis said the agreement of the banks is key.
“What happens right now is that even though both sides attend a settlement conference, it just doesn’t happen,” he said. “We can sanction the bank, but that just slows the process down. And if you fine Chase $1,000, it’s not going to change the way they do business.”
He said if the program proves successful it will be tried elsewhere in the state.
Neubauer also believes that as bad as foreclosure numbers look now, there are cases where homeowners have received things like notices of default, but have not yet been taken to court by their lenders.
“There’s a shadow docket out there with cases that have not yet commenced,” she said. “We’re waiting for the floodgates to open.”
While Legal Aid has been able to assist many clients, New York City Councilman Leroy Comrie (D-St. Albans) told the Chronicle in February that up to 67 percent of all city homeowners in foreclosure proceedings were not represented by attorneys in 2011. The figure was up from 63 percent in 2010.
He also said Gov. Cuomo eliminated the line item for the state’s Foreclosure Prevention Services Program from his recent 2012-13 budget proposal.
Comrie and Councilman Al Vann (D-Brooklyn) have been leading the city’s charge to get the money restored in the budget negotiation process.
New York State Attorney General Eric Schneiderman, who also heads President Obama’s national Residential Mortgage-Backed Securities Working Group, announced on Feb. 9 that the state will receive an estimated $136 million from a $26 billion settlement with five banks.
Some of that money will be earmarked for housing advocacy and legal aid groups that work with homeowners facing foreclosure.
Eligible state residents also will have access to an estimated $13 million in direct payments from the federal settlement with the banks if it is determined their homes were wrongly placed in foreclosure.