New Settlement Enhances Legal Protections for Homeowners Facing Foreclosure Across NYS 

NEW YORK CITY – Today, the New York Civil Liberties Union, Yolande I. Nicholson, P.C., Mehri & Skalet PLLC, and Valli Kane & Vagnini LLP, announced the resolution of their 2023 class-action lawsuit against the New York State Office of Court Administration (OCA) for failing to assess homeowners facing foreclosure for free legal representation, as state law mandates. In the settlement, OCA has agreed to implement the state law’s protections for homeowners across New York State. In 2023, more than half of New York homeowners facing foreclosure did not receive any assistance from legal counsel at the key initial stage of their cases.

“Today’s settlement is a step in the right direction in providing stronger legal protections for homeowners facing foreclosure, which is a racial justice imperative as Black and Brown families continue to bear the brunt of housing discrimination,” said Terry Ding, staff attorney at the New York Civil Liberties Union. “Foreclosure cases are complicated and having an attorney can be the difference between housing instability and security. As the racial gap in homeownership continues to grow, New York must step up and provide more funding to ensure struggling homeowners have access to legal representation.”

New York law requires parties to a residential foreclosure case to participate in an initial settlement conference to discuss whether they can resolve the case in a way that allows the homeowner to keep their home. The law also requires the court to determine whether a homeowner appearing without a lawyer at the initial settlement conference qualifies for appointed counsel. Prior to today’s settlement, New York courts routinely failed to make that assessment, leaving homeowners unrepresented and more likely to lose their homes.

The lawsuit includes plaintiff Carl Fanfair, a Black homeowner and long-time Brooklyn resident at risk of losing his home. The court failed to assess whether he qualified for free legal representation.

“Navigating the foreclosure process without a lawyer has been a confusing and stressful experience. I am hopeful that this agreement will give families like mine a better shot at saving our homes from foreclosure,” said plaintiff Carl Fanfair, a homeowner in Bedford-Stuyvesant for more than 20 years. “The state must do more to keep families—especially Black families—in our homes and make sure we can pass them on to our kids.”

Under the settlement:

• OCA will implement the state law’s protections for homeowners facing foreclosure across New York State.
• Before the initial settlement conference is held in a foreclosure case, OCA will send homeowners a notice informing them of the purpose of the conference and what information they should provide to allow the court to determine whether they should be appointed counsel.
• Homeowners who are in active foreclosure proceedings that began on or after December 1, 2022, and who were unrepresented at their initial settlement conference but did not receive an appointed-counsel assessment, are entitled to a do-over of that conference, where the court will determine whether the homeowner should be appointed a lawyer.
• OCA will send an advisory to all judges overseeing residential foreclosure cases reminding them of the requirements of the state law and homeowners’ rights under the law.
• OCA will provide the NYCLU with quarterly reporting for 3 years of data relating to legal representation for homeowners in foreclosure proceedings.

“Today’s settlement sends a clear message to the courts: they must uphold the law and ensure struggling homeowners have the legal protections they need to have a fair chance of keeping their homes,” said Yolande I. Nicholson, Esq., principal attorney at Yolande I. Nicholson, P.C. “Many homeowners in foreclosure proceedings are working families who cannot afford their own attorney. Yet they often face off against deep-pocketed banks, lenders and real estate investors with experienced lawyers, making it more likely that these families lose their homes. While today’s settlement begins the process of leveling the playing field, New York must do more to protect homeowners facing foreclosure.”

“For over a decade, New York courts have ignored important protections against home foreclosures created by the New York State legislature,” said Michael Lieder, partner at Mehri & Skalet. “We’re gratified that, once we filed this lawsuit, the State chose to work with us to create long-overdue processes for implementing protections for homeowners that will result in some families keeping their homes that they otherwise would have lost.”

Last year, New York Attorney General Letitia James released a report detailing deep racial disparities in homeownership and access to home financing across New York. Predominantly Black and Brown neighborhoods in Brooklyn and Queens have the highest percentage of struggling homeowners in New York City, an outcome of decades of racist housing policies. Most recently, these areas were significantly affected by predatory lending leading up to the 2008 financial crisis. Since the state’s COVID-19 foreclosure moratorium was lifted in January 2022, the number of properties in pre-foreclosure has significantly increased across the five boroughs, with Brooklyn the borough that experiences the most foreclosures citywide.

NYCLU staff on the case include attorneys Terry Ding, Daniel Lambright, Ify Chikezie, Chris Dunn, paralegal Alanis McAlmont, and senior investigator Soleiman Moustafa.

Visit the case page for additional materials.