The Call for a Legislative Moratorium
on Residential Mortgage Foreclosures
& NYC's Third-Party Transfer Seizures
At this time, our New York State elected officials should enact a moratorium on residential mortgage foreclosure proceedings for New York State Courts to demonstrate that they are willing to embark on the Legislature’s fundamental directive on the courts to save homeownership whenever possible. The courts should also be required to immediately return residential mortgage foreclosure cases to the Independent Assignment System across New York State; the special foreclosure parts are destroying neighborhoods and communities of color across New York State, while at the same time converting working-family, homeownership communities in New York City to investor-driven rental communities.
The moratorium should extend until the NYS Office of Court Administration funds and implement the mandate of CPLR 3408 across the State -- to convene and administer good-faith settlement conferences and hearings -- to save homeownership and stabilize hardest-hit communities. Without a moratorium and adherence to CPLR 3408 by the court, the utilization of New York State Courts by banks and investors in mortgage loans -- utilizing plaintiffs that are merely shrouds -- to secure judgments and auctions improperly or illegally, will continue unabated. The moratorium legislation should specify that all interest, fees and charges on mortgage loans in foreclosure is tolled until the moratorium is lifted.
In 2018 and 2019, Brooklyn Borough President Eric Adams and others joined in the call for a legislative moratorium. Without a moratorium, historic working-family communities may be adversely impacted. Without a moratorium, African-American families especially will continue to be directed into homeless shelters or will continue to be driven out of New York State. Without a moratorium, home ownership may no longer be an affordable or attainable for New York City's median-income working families. Without a moratorium, homeowners' trust in the New York State Court system may be permanently eroded.