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» VISIT US ONLINE @ DSNEWS.COM 27 In New York, when you bring a residential mortgage foreclosure case in the state courts, residential borrowers are entitled to settlement conferences and there are procedural safeguards during the foreclosure proceeding that make the case move very slowly. To many lenders and servicers, it seems as if everything is on hold in New York. Your case can't proceed until you go through this separate settlement conference part they have. at could delay cases for up to a year or more. In reality, we're looking at three plus years to get a residential foreclosure case through. In federal court, we can get an unopposed case through around a year, even under a year sometimes, as opposed to two to three years in the state court, down state. Why is it so hard to get cases through at the state level? e state courts are so bogged down with residential mortgage foreclosure cases because they're the only ones that typically handle these type of foreclosures. e courts are over- whelmed and understaffed. It takes forever to finish a case, especially when you have to go through these safeguards put in by the FPRLA. Basically those safeguards are the settlement conference part, requiring the borrower and the lenders to come in and try to negotiate in good faith to get a modification or any other types of loss mitigation. What were the requirements to get your case tried at the federal level instead? To get into federal court, we need to have diversity, meaning the citizenship of the plaintiff is different than the citizenship of each and every defendant. Our plaintiff in this case was a Florida company with Florida ownership. ey held the note. Because they held the note and they're in Florida and it's a New York property with a New York borrower, the citizenships are different. Because the citizenships are different, they're diverse. Diversity is what you need to get into federal court. e case must also involve a dispute over $75,000.00, which was the case here. Can you tell us about the Supreme Court cases the defense used to support its case? ey cited these two Supreme Court cases—Burford v. Sun Oil Co. and Louisiana Power & Light Co. v. City of ibodaux—both cases that outlined abstention principles. e defense said that because of these cases, the court shouldn't hear foreclosure cases and the homeowner should have a right to a settlement conference, because of their New York State rights granted to them by state law. e court went through those cases and ultimately said that Burford and Sun Oil don't apply to this case, because the state issues aren't as clear cut. ey said the federal court does not need to abstain and give it back to the state court or simply refuse to hear the case at all when the state issues are unclear. In other words, if New York state's settle- ment conferences were run by an administrative agency, then the federal court would abstain. But they're not. ey're run by the court. Ultimately, the court decided in your client's favor. What does that mean for the future of foreclosures in New York? What about other states? It's a long overdue confirmation for lenders and servicers that the federal court can, should, and will allow cases that are heard in the state courts 99.9 percent of the time to also be heard in the federal courts. is decision will likely have ramifications in other states, too. If a state that has the same or similar procedural safeguards as New York, lawyers, clients, or lenders will look at this case and say, "You know what? We're going to tell our lawyers to bring these cases in federal court if they have the diversity." **Background: New York passed the Fore- closure Prevention and Responsible Lending Act (FPRLA) to provide legal protection and foreclosure prevention opportunities to at-risk homeowners. All state-level foreclosure cases are pursuant to the FPRLA's protections. "The courts are overwhelmed and understaffed. It takes forever to finish a case, especially when you have to go through these safeguards put in by the FPRLA."

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