To everyone’s great relief, New York enacted the Covid-19 Emergency Eviction and Foreclosure Prevention Act in late 2020. The Act orders a moratorium on all eviction and foreclosure actions involving defendants who file a Hardship Declaration stating the have suffered negative financial consequences due to the pandemic.
After some ups and downs, including surviving a legal challenge, the moratorium set forth in the Act was due to expire at the end of August 2021. But after a US Supreme Court decision that struck down a federal eviction and foreclosure moratorium, and with a new Governor in Albany, New York passed legislation in early September 2021 that extends the moratorium. The new legislation does not have a pithy name like the first one perhaps because it amends parts of the Act and adds entirely new sections, such as the one covering commercial evictions and foreclosures; it is known simply as Chapter 417 of the Laws of 2021, which I will continue to refer to as the Act.
The latest version of the Act, like the previous version, puts a moratorium on all foreclosure actions where a borrower files a Hardship Declaration stating the requisite financial difficulties. But the language of the Act does not specifically state that it is extending the moratorium on those cases where a borrower has already filed a Hardship Declaration. It seems to suggest that borrowers will have to file a new Hardship Declaration to obtain the moratorium that was previously granted over their actions.
As any good lawyer knows, the analysis rarely stops at the language of the legislation. There are often implementing rules and regulations that are enacted to clarify the law’s application. That is what happened here: pursuant to authority granted in the Act, the Chief Administrative Judge of the Courts of New York issued an Administrative Order (AO262) indicating that if a borrower has already submitted a Hardship Declaration—to the bank/lender, their agent, or the court—then “the action shall be stayed until at least January 15, 2022.”
Now for the answer to the question posed in this post—does the moratorium stay your foreclosure defense appeal? Neither the legislation nor the Administrative Order define “action” and there is no mention of appeals. But experience in other areas of the law, such as bankruptcy where an automatic stay is granted after a debtor files a petition, tells us that an appeal is considered part of the “action” so the appeal is stayed along with any other proceeding in the New York Supreme Court.
At least that is my argument for my clients with appeals pending right now. I will update you with more if I hear differently from the Appellate Division.
Speaking of appeals, I shudder to think about what is going to happen when the moratorium finally ends. Will there be a flood of foreclosure actions filed by the banks? I hope not. But if so, I have a piece of advice: consult with an appeal attorney early on in your case so they can help you issue spot and focus on evidence that will be necessary for an appeal. I’ve seen so many foreclosure defense appeals (from the last decade of working on the fallout from the securitization collapse cum financial crisis) where a crucial argument was missed or an integral piece of evidence was left out. This time around, I want all foreclosure defense attorneys to be better prepared to save our clients’ homes.
If you have a foreclosure defense appeal you need help with, then get in touch with me here.
