The Particular Problem Of The Thorny Late Answer

It is well understood that when a defaulting borrower (or other defendant) in a mortgage foreclosure action interposes an answer, such serves to considerably delay the progress of the case – duration already and always a problem in New York mortgage foreclosure matters.  A foreclosure action cannot proceed unless and until the answer is disposed of, most often by a motion for summary judgment.  But that motion practice can readily consume around six months, often more, and even though plaintiffs are usually convinced of the correctness of their position, no favorable result is ever certain.

So receipt of an answer in the foreclosure case from a plaintiff’s point of view is an unfortunate, albeit hardly uncommon, response to initiation of the action.

What is even more insidious, though, is the instance of the defendant who does not answer, but who waits until some later stage to claim that he has the right to submit a late answer.  This is hardly atypical and is addressed with some regularity, for example in the case which brings it to our attention for this alert, [Bank of America v. Viener, 172 A.D.3d 795, 100 N.Y.S.3d 293 (2d Dept. 2019)].

The overarching rule in this regard (not surprisingly restated in the cited case) is that a defendant who has neglected to timely answer a complaint, but who seeks leave to file a late answer, is obliged to provide both a reasonable excuse for the delay and a demonstration of a potentially meritorious defense to the action.

Whether a proper excuse has been offered, and if so, whether a potentially meritorious defense may exist, is left to the sound discretion of the trial court.  Because courts prefer to hear cases on the merits, it would not be untoward to observe that courts would prefer to achieve that result.  Thus, flimsy excuses are sometimes accepted, although if there is no proper excuse, then the court need not even approach the quality of any defenses attempted to be interposed.

While the surfeit of excuses which can be presented are legion, one that appears with some regularity is the assertion that the borrower appeared and participated in the mandatory foreclosure settlement conference and that such is their excuse for not having answered earlier.  In this regard, it must be immediately mentioned that the section of New York’s Civil Practice Act (CPLR §3408) dealing with mandatory settlement conferences provides a specific exception regarding a late answer on this point.  It states that a defendant who appears at a settlement conference, but who has failed to timely file an answer, is presumed to have a reasonable excuse for the default and is to be permitted to file an answer without any substantive defenses waived within thirty days of initial appearance at the settlement conference.

That noted, however, if the answer is submitted later than that, as is so often the circumstance, the mere appearance and participation at the foreclosure conference is in and of itself not a valid excuse – which was one of the points that the new case confirmed.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2019), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.