Settlement conference: A consultation between two parties in an attempt to avoid a trial.
Settlement conference: A meeting between the homeowner and the bank at which both parties attempt to reach a mutually agreeable resolution in order to avoid a foreclosure action or trial.
Settlement Conference: An Attempt to Find an Alternative to Foreclosure
A settlement conference is a meeting between all parties involved in a case for the purpose of exploring possibilities for settlement.
In New York, for example, “The court mails you a date, time and place for a settlement conference. The court date is sometime during the first two months after the plaintiff files proof of service and a RJI. A settlement conference is a meeting between you, someone from the court (a judge, court attorney, or court referee), and the plaintiff. The meeting is to talk about your case and to see if your foreclosure can be resolved.”
Even if they attend the settlement conference, homeowners are still required to answer the summons and complaint. If they attend the first settlement conference, they will be granted an extra 30 days to file their answer.
Homeowners are expected to bring copies of their financial documents to the settlement conference, including pay stubs, benefits information, mortgage statements, list of monthly expenses, proof of any rental income, income tax return, property tax statements, proposals to change the loan terms, and any information regarding previous attempts to settle.
At the settlement conference, the bank and the homeowner will meet with the court to discuss settlement options, such as paying the money owed over time, changing loan terms, selling at a short sale or agreeing to a deed in lieu of foreclosure. The bank should be prepared with copies of the mortgage and note, loan modification forms, loss mitigation options or alternatives to foreclosure, a copy of the pooling and service agreement if there are investment restrictions, a list of missing documents, and any denial letters.
If the bank and the homeowner reach a settlement, it will be put in writing and signed by all parties, thereby bringing the case to an end. If a settlement is not reached, the homeowner may receive a new court date to continue the settlement conference.
If the homeowner files an answer and both parties are unable to reach a settlement agreement, the parties will begin discovery and establish a timeline to exchange information. If an answer is not filed by the homeowner within 30 days of the first settlement conference and the case isn’t settled, the bank may request a default judgment against the homeowner, which can lead to foreclosure and eviction.
According to Jake Sterling, Amerihope Alliance Legal Services’ Homeowner Liaison, “Participating in a foreclosure settlement conference is tough work. Also, it doesn’t mean you’ll avoid foreclosure. However, a lender is more likely to agree to an alternative solution at a foreclosure settlement conference than talking on the phone. For instance, you may qualify for loss mitigation, and goals or deadlines for the loan modification process can be set at this conference.
“Therefore, this hearing is worth the time and effort. You shouldn’t ignore any conferences. It may mean the difference between saving your home and moving somewhere else. Hiring an attorney is vital to understanding more about the process and negotiating in the settlement conference.”