Earlier guidance from Cuomo had opened the door for some to proceed
By Georgia Kromrei
June 25, 2020
For lenders looking to foreclose on New York properties, the message from the courts is: look elsewhere.
New guidance issued by New York Chief Administrative Judge Lawrence Marks states that no foreclosures can proceed for the time being unless the property is empty or abandoned. His memo also encouraged lenders to drop pending cases.
“No motions other than to discontinue a pending case shall be entertained or decided,” Marks wrote. “No judgment of foreclosure may issue for any matter other than one addressing vacant and abandoned property.”
The guidance, effective yesterday, differs from Gov. Andrew Cuomo’s May 7 order which extended and limited the previous eviction moratorium and blocked “initiation of a proceeding or enforcement of … a foreclosure of any residential or commercial mortgage,” as long as the distress was related to the coronavirus.
A court spokesperson did not comment on the conflicting guidance from the governor’s office and the courts.
“We are incrementally expanding what non-essential matters can be filed,” the court spokesperson said. “This applies to all courts.”
The foreclosure protection in Cuomo’s May order was limited to borrowers who could document their financial hardship and prove it was related to the coronavirus. That order gave bank attorneys, lenders and financial institutions hope that, starting this week, foreclosures on properties could begin. The latest guidance eliminates that possibility, for the time being.
One lawyer called it an overreach by the courts.
“There is no authority for Justice Marks to disregard an executive order from the governor that says that foreclosures can occur now except persons affected by unemployment or Covid-19 are stayed until August 20,” said Adam Leitman Bailey, an attorney at his eponymous firm.
The mismatch between Cuomo’s May 7 order and the court guidance on foreclosures echoes the confusing messages on eviction proceedings. Those proceedings were set to restart in some cases this week with the reopening of Housing Court, according to the governor’s executive order. But last-minute guidance from the courts effectively stopped eviction filings for the time being.
That prompted one frustrated attorney to float the idea of a landlord protest at Barclays Center during a Zoom meeting of real estate lawyers that devolved into commiseration.