A new state law signed in Albany this week will allow homeowners who win foreclosure proceedings to have the lender pay their lawyers' fees, according to an article in today's edition of The New York Times by John Eligon.
"Supporters say the law balances what they see as the long unfair practice of lenders writing provisions in mortgage contracts that allow them to collect lawyers' fees from homeowners when the lender successfully forecloses. Some also say that the new law may give homeowners a better chance in court because they will more easily be able to get representation," the article said.
The article said that Assemblyman Rory I. Lancman, a Democrat of Queens who co-sponsored the bill, said that "We have thousands of foreclosures in New York State where homeowners" have valid defenses, "but they are unable to assert those defenses because they don't have a lawyer."
"In some other types of litigation, like employment or civil rights, lawyers' fees have long been awarded to the winning party, Mr. Lancman said. But foreclosure litigation has been an exception," the article continued, adding that "there's been a major problem as this foreclosure crisis has exploded in getting representation for people who need counsel," said Andrew Scherer, the former president of Legal Services NYC, an agency that provides counsel to people who cannot afford lawyers in civil cases. "This is going to provide a pretty reasonable incentive for private attorneys to take on these cases," Mr. Scherer added.
Even in cases in which a settlement is reached, Mr. Lancman said, lenders may be more willing to negotiate the lawyers' fees, knowing that they may have to pay those fees if they lose a judgment, the article said.
Michael J. Wrubel, a Florida lawyer who represents homeowners, said he did not believe the new law would substantially tip the scale in favor of homeowners, the article said: "When you take into consideration the amount of money that's at stake in the grand scheme, it's just not worth it to them to really be concerned about attorneys' fees."
"Supporters say the law balances what they see as the long unfair practice of lenders writing provisions in mortgage contracts that allow them to collect lawyers' fees from homeowners when the lender successfully forecloses. Some also say that the new law may give homeowners a better chance in court because they will more easily be able to get representation," the article said.
The article said that Assemblyman Rory I. Lancman, a Democrat of Queens who co-sponsored the bill, said that "We have thousands of foreclosures in New York State where homeowners" have valid defenses, "but they are unable to assert those defenses because they don't have a lawyer."
"In some other types of litigation, like employment or civil rights, lawyers' fees have long been awarded to the winning party, Mr. Lancman said. But foreclosure litigation has been an exception," the article continued, adding that "there's been a major problem as this foreclosure crisis has exploded in getting representation for people who need counsel," said Andrew Scherer, the former president of Legal Services NYC, an agency that provides counsel to people who cannot afford lawyers in civil cases. "This is going to provide a pretty reasonable incentive for private attorneys to take on these cases," Mr. Scherer added.
Even in cases in which a settlement is reached, Mr. Lancman said, lenders may be more willing to negotiate the lawyers' fees, knowing that they may have to pay those fees if they lose a judgment, the article said.
Michael J. Wrubel, a Florida lawyer who represents homeowners, said he did not believe the new law would substantially tip the scale in favor of homeowners, the article said: "When you take into consideration the amount of money that's at stake in the grand scheme, it's just not worth it to them to really be concerned about attorneys' fees."
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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