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Home foreclosure: a continuing national problem

Constrained financial circumstances for many American families continue to result in hassles with lenders regarding debt across a wide spectrum of concerns. Credit card debt continues to be a struggle for millions of individuals and families across the country. As we have noted in past blog posts, so, too, does student debt, with legions of former students weighed under by staggering and long-term loan obligations. Medical debt is also a sobering concern for many.

All of these burdens can lead to further and more dire economic concerns in many instances. Home foreclosure, for example, is an especially acute problem in Florida, with state home dwellers leading the country over the past several years in terms of the challenges they face on this front.

Floridians are, of course, not alone in this regard. Extremely high foreclosure rates have also saddled large areas of Nevada, California, Texas and many other states.

New York is no exception. The state’s chief judge there, Jonathan Lippman, estimates a present foreclosure backlog in the state’s court at around 12,000 cases, although other estimates double that number.

A special problem in New York is that many lenders’ attorneys are not abiding by a fairly recent legal enactment requiring them to submit a certificate along with the foreclosure filing made to a court attesting that all foreclosure-related documentation is accurate.

Not doing that has stalled filings in a “shadow docket” of pending cases. While pending, homeowners continue to rack up fees and interests and, moreover, cannot seek to negotiate with a lender or move their case forward in any way. A court process allows for mediation with a lender, but only after a filing is formally commenced. A lender’s attorney failing to affirm the accuracy of a filing prevents that process from occurring.

Lippman and others are working hard to ensure that attorneys file the requisite certificate to reduce the shadow docket and help homeowners seek relief in a more timely manner.

With the many thousands of foreclosure cases hanging in limbo, Lippman says that “the integrity of the court process is at stake.”

Source: New York Times, "Awaiting foreclosure relief," Lisa Prevost, July 25, 2013

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