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Are New York Timelines Going to Subside?

A Speech from Outgoing NYDFS Superintendent

Stuart Quinn    |    Housing Policy

Benjamin Lawsky, superintendent of financial services for the State of New York announced his exit from the New York Department of Financial Services, the day after delivering remarks on modifying the New York judicial foreclosure system to better serve lenders and consumers. Lawsky has been highly active throughout his four year tenure with notable settlements dealing with Deloitte and Ocwen Financial Services and delivered over $6 billion in monetary settlements to the State of New York.

In remarks made at the MBA National Secondary Market Conference on May 19, 2015, Lawsky highlighted the protracted foreclosure timelines despite reductions in defaults, referenced the NYDFS Foreclosure Report and provided policy responses some of which were immediate and others that require legislation.

In New York, foreclosure timelines are highly elevated as the state requires “mandatory settlement conferences’ whereby servicers and borrowers meet in good faith to reach a resolution. Nearly a third of the civil caseload are foreclosure cases. In New York, the servicer is not responsible for taxes or maintenance until the foreclosure action is complete, which creates malincentives regarding the liquidation of properties based on their quality or arrearages. Lawsky proposes further defining good faith efforts and designating a fee or toll if the servicer is unprepared for the scheduled conference, or alternatively, the denial of settlement conference if the consumer is unprepared. Finally, Lawsky recommended advancing and expanding fast track foreclosure programs that are already being conducted in Suffolk, Nassau and the Bronx to the entire state with an emphasis on vacant properties or “zombie properties.”

The NYDFS will be searching for a successor, but Lawsky established an expansion of financial services oversight within New York, including delivering speeches on the expansion of incriminating individuals in cases and also creating settlements that included provisions that barred actors from specific markets. Below is a list of candidates the New York Times has identified as potential successors.

  • Michele Hirshman, a former federal prosecutor and a partner at Paul Weiss;
  • Hector Gonzalez, another former prosecutor who is a partner at Dechert;
  • Marshall L. Miller, a senior Justice Department official;
  • Jonathan Schwartz, former JPMorgan Chase executive and current general counsel of Univision
  • Bridget M. Healy, ING’s top lawyer in the United States.

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