The so-called “shadow docket” is a practice where a mortgage lender will provide a homeowner with a notice of foreclosure, then realize that it doesn’t have sufficient documentation to prove it actually owns the loan.
The homeowner ends up in a kind of legal limbo – sometimes lasting two years or more – while the lender figures out what the next step is.
All the while, penalties and interest are accruing against the homeowner.
Once the lender finally moves forward on the foreclosure action, they may then seek a deficiency judgment against the homeowner for much more than the amount of the loan when the owner vacated the property.
New York legislators have attempted to address this situation in several ways.
First, lenders must certify that they own the property before they can begin the foreclosure process, and once foreclosure begins, lenders must schedule a settlement conference with the homeowner within three months.
If you’ve been on the shadow docket and want to know what you can do, call the Queens foreclosure attorneys at Zelenitz, Shapiro & D’Agostino at 718-599-1111 for a free consultation.