Mandatory Foreclosure Conference Extension Bill Passes NY Legislature

The New York legislature has passed legislation extending important protections for New York homeowners in foreclosure for an additional five years past their February 2015 expiration date.  Many advocates (as covered here) had argued stridently for passage of this bill, which now awaits the signature or veto of Governor Cuomo.

As explained in an email blast from the the Empire Justice Center:

Dear Friends,

Empire Justice Center is thrilled to share the news that the  State Legislature has passed critical legislation that will ensure that New York homeowners have access to settlement conferences for another five years.  The conferences have been invaluable and have prevented thousands of New Yorkers from losing their homes once a foreclosure case is filed against them, as had previously been happening prior to the institution of the settlement conferences.

Since 2010, lenders and homeowners in all residential home loan cases have been required to meet to see if the parties can reach a mutually agreeable resolution, such as a loan modification or other workout, to avoid loss of the home.  Unfortunately, the numbers project record high foreclosures still to come in New York.  The continuation of the settlement conferences, as well as continuation of an early warning notice to homeowners in default and a notice to tenants in buildings being foreclosed upon, are vital consumer protections that will remain in place.  We especially want to thank Senator Jeff Klein and Assemblymember Helene Weinstein, for sponsoring and championing these vital consumer protections five years ago and ensuring their continuation this year.

Kudos to them, to the NYS legislature, and to the many consumer advocacy groups that worked to support the passage of this bill.

In solidarity,

Kirsten E. Keefe, Senior Attorney

Additional coverage by the Daily News here:

"Senate Co-Leader Jeffrey Klein (D-Bronx/Westchester) announced Wednesday that the State Senate voted 56 - 1 in favor of his legislation that would extend vital foreclosure prevention measures and homeowner protections for an additional five years beyond the February 2015 expiration date. These protections include extending the requirement for lenders to provide 90 notice of foreclosure and mandatory settlement conferences for all home loans. An expiration of these protections would have meant that tens of thousands of New York homeowners in pre-foreclosure were in serious danger of losing their homes. The State Assembly passed the legislation on June 2nd. The legislation now awaits New York Governor Andrew Cuomo’s signature to become law."

Teacher Employee Rights and Student Equal Protection Rights Collide: California Teacher Tenure Laws Ruled Unconstitutional

At one point quoting Brown v. Board of Education, a California state court judge found that California's teacher tenure rules violated the state constitutional right to education and the equal protection rights of minority and/or poor students.

"LOS ANGELES — A Los Angeles Superior Court judge ruled Tuesday that teacher tenure laws deprive students of their constitutional right to an education, a decision that hands teachers’ unions a major defeat in a landmark case that overturns several California laws that govern the way teachers are hired and fired.

'Substantial evidence presented makes it clear to this court that the challenged statutes disproportionately affect poor and/or minority students,”'Judge Rolf M. Treu wrote in the ruling. 'The evidence is compelling. Indeed, it shocks the conscience.”'

The ruling, which declared the laws governing how teachers are hired and fired in California to be unconstitutional, is likely to set off a slew of legal fights here and in other states, where many education reform advocates are eager to change similar laws. 

***

The plaintiffs argued that California’s current laws made it impossible to get rid of low-performing and incompetent teachers, who were disproportionately assigned to schools filled with poor students. The result, they insisted, amounted to a violation of students’ constitutional rights to an education."  (link)

The decision cites a study that calculates the cost of a single year of teaching by a "grossly ineffective" teacher was $1.4 million in students' lifetime earnings per classroom.  Another cited study calculates there are between 2,750 and 8,250 "grossly ineffective"  teachers in California classrooms.

Importantly, many other states, including New York, also have a state constitutional right to education that will likely provide a basis for similar challenges to teacher tenure rules.

ABA: A Dual Perspective on City-Mandated Paid Sick Leave Policies

From the American Bar Association Section of Labor and Employment Law - a point counterpoint on paid sick time laws:

A Dual Perspective on City-Mandated Paid Sick Leave Policies

Since 2006, several cities have enacted ordinances requiring employers to provide a specified number of paid sick days per year to employees who have some level of work activity in those cities. To date, San Francisco; Seattle; Portland, OR; Long Beach, CA;1 New York City, Jersey City and Newark,2 NJ; Philadelphia;3 and Washington, D.C., plus the state of Connecticut have passed mandatory paid sick leave laws. Although these laws vary--some apply only to larger employers, or require the provision of unpaid, rather than paid sick days for smaller employers--they generally provide anywhere from five to fourteen paid sick days per year for employees to care for themselves or a dependent family member.

At the same time, ten states (Georgia, Wisconsin, Louisiana, North Carolina, Tennessee, Massachusetts, Kansas, Indiana, Florida, and Arizona) have adopted laws that prohibit local governments from passing paid sick leave laws. Fourteen other states are considering similar bans.  (continue reading)

Mortgage Servicers Placing Non-Disparagement Clauses in Mortgage Loan Modifications

I can understand the use of these provisions in severance agreements that concern the complicated relationship between employer and employee - but a non-disparagement requirement to obtain a mortgage loan modification?  Severance agreements concern a relationship that has ended - not an ongoing relationship like a mortgage loan.

Nonetheless it appears to be so - as reported by the Consumer Law & Policy Blog:

"Mortgage servicers increasingly are including non-disparagement clauses in loan modification agreements, including ordinary loan modifications (i.e., those that are not negotiated in settlement of litigation). In at least one instance, Ocwen, the largest non-bank servicer of mortgages in the U.S. thanks to a number of acquisitions in recent years, sought to impose a non-disparagement provision that would have prevented the homeowners from making "any derogatory and/or disparaging comments about Ocwen." (link)

 This is really happening:

"Mortgage payment collectors at companies including Ocwen, Bank of America Corp and PNC Financial Services Group are agreeing to ease the terms of borrowers' underwater mortgages, but they are increasingly demanding that homeowners promise not to insult them publicly, consumer lawyers say. In many cases, they are demanding that homeowners' lawyers agree to the same terms. Sometimes, they even require borrowers to agree not to sue them again

These clauses can hurt borrowers who later have problems with their mortgage collector by preventing them from complaining publicly about their difficulties or suing, lawyers said. If a collector, known as a servicer, makes an error, getting everything fixed can be a nightmare without litigation or public outcry." (link)

If these provisions had been standard practice before the mortgage crisis it would have severely hampered public advocacy around mortgage issues.  In addition, homeowners who sign these agreements may be barred from speaking out publicly about future servicing or other mortgage issues for the remaining life of the loan - which can be as long as forty years. 

There's a lot that a mortgage servicer can do wrong that is worth disparaging over that period of time.  This development is a real threat to the rights of American homeowners that needs to be addressed immediately.

BREAKING - Ocwen recently promised to halt this practice:

"Ocwen Financial (OCN) reached an agreement with the New York Department of Financial Services, saying that it would stop using gag orders on mortgage modifications.

"'In discussions with our Department, Ocwen has agreed to no longer seek gag rules as part of settlement agreements or loan modifications with borrowers,' Benjamin Lawsky, superintendent of Financial Services, said.

'Additionally, the company has stated it will not enforce gag rule provisions in existing agreements. We are gratified that Ocwen worked constructively with us to resolve this matter, and our Department intends to review this issue at other financial institutions,' Lawsky added."  (link)

That's a good start - but that still leaves at least Bank of America Corp and PNC Financial Services Group.

Banks Allegedly Overcharged U.S. Government When Foreclosing on Homeowners

You think you understand the truly depressing extent of conduct of some banks before, during, and after the foreclosure crisis, and then you read this:

"(Reuters) - The U.S. Attorney's office in Manhattan is investigating at least five banks over whether they overcharged the government for expenses incurred during foreclosures on federally backed home loans, filings and interviews show.

PNC Financial Services Group Inc, PHH Corp, MetLife Inc, Santander Holdings USA Inc and Citizens Financial Group Inc, the U.S. unit of Royal Bank of Scotland, have all disclosed in filings with the Securities and Exchange Commission that they've received subpoenas. U.S. Attorney Preet Bharara's office is seeking information on claims on foreclosed loans insured by the Federal Housing Administration or guaranteed by Fannie Mae and Freddie Mac, according to records reviewed by Reuters." (link)

First banks caused the foreclosure crisis, then got bailed out, then lobbied against the bankruptcy bill that would have helped halt the crisis, then agreed to the Home Affordable Modification Program ("HAMP") but initially refused to actually properly modify mortgages under the program -- all the while foreclosing on homes without the legal right to do so because of improper paperwork and robosigning.

That was not enough?

"The subpoenas, coming years after the height of the foreclosure crisis, seek information about banks' foreclosure-related expenses, which generally include court filings and posting or mailing legal notices.

"You've got a lot of people trying to clean up the servicing industry, but the truth is we are seeing the same servicing problems over and over," said Ira Rheingold, director of the National Association of Consumer Advocates in Washington. "It was built into the model to charge as many fees as they could." (link)

You think you've seen it all . . . and then you see more.

The Legal Diversity Crisis - Why Are Black Lawyers Underrepresented at Top Law Firms?

From the New York Times and The American Lawyer - the more you think about it the more disturbing these numbers are:

"Black lawyers accounted for 3 percent of lawyers at big firms last year, a percentage that has declined in each of the last five years. And the proportion of black partners at such law firms remained stagnant at 1.9 percent during the same period, according to the 2013 diversity scorecard published in the June issue of The American Lawyer." (link)

The black population of the United States is currently 13%. 

As previously discussed (here and here), subconscious biases likely play at least a part in these dynamics: 

"Blacks lag behind in the top tiers of the law, according to the American Lawyer, because unconscious racial bias can influence the types of assignments and the relationships between and among employees. That can hinder black lawyers from advancing to the highest slots, it said."  (link)

As explained in The American Lawyer:

"What still is lacking, many black lawyers and diversity directors say, is a broad commitment by individual white partners to ensuring the success of minority lawyers, and particularly black lawyers. Recent research has painted an alarming picture of the continuing presence of unconscious racial bias at firms. The research confirms what a lot of black lawyers have known all along: It's not enough to recruit more black associates if you don't deal with pervasive bias." (link)

As explained by a black female ninth-year associate at a midsize firm:

"'You are deemed worthy of receiving the keys when you are liked, and you are usually liked by people who can relate to you or perceive you as similar to themselves,' a black female ninth-year associate at a midsize firm says, asking not to be identified because she is up for partnership. Black lawyers, she adds, 'would more often than not say that they were not able to bring their whole selves to work and therefore grew tired of the ruse and moved on, or they brought their whole selves to work and found themselves ostracized and alienated.'" (link)

The American Lawyer article points to a study similar to one previously covered here (regarding email responses by professors at top colleges):

"In late April, law firms were roiled by a study that shows in the starkest terms yet how implicit bias remains pervasive. The study, by Nextions, a law firm diversity consultant and leadership coaching firm, found that supervising lawyers were more likely to perceive African-American lawyers as having subpar writing skills.

In its study, Nextions inserted 22 errors, including minor spelling or grammar errors, factual errors and analysis errors, into a research memo written by a hypothetical third-year litigation associate. The memo was then sent to 60 partners who had agreed to participate in a writing analysis study. Half got a memo identifying the author as African-American; the other half, a memo noting that the associate was white. The hypothetical black associate got a significantly lower score on average than the hypothetical white one. Partners, regardless of their race or gender, had more positive things to say about the work of the white associate, and found fewer mistakes on average in the paper."  (link)

Of course, that is not the only dynamic at play:

"Interviews with two dozen black lawyers, in-house counsel, diversity experts and academics, plus our exclusive law firm surveys, suggest a variety of causes. Most agreed that pressures within law firms that began during the recession have made partnership both a more difficult and less attractive proposition for black lawyers. Meanwhile, the pipeline has narrowed. As firms keep associate classes smaller, fewer black lawyers are moving into firms; the black law graduates who are tapped by elite firms continue to be a small group of high-ranking students from first- or second-tier law schools. Finally, a mid-2000s push by corporations to compel their outside counsel to diversify has receded, displaced by concerns over law firm pricing."  (link)

The American Lawyer article highlights some of the efforts some law firms are taking in response to these issues, including revisiting hiring and evaluation systems:

"In the meantime, firms such as Schiff Hardin, Littler Mendelson and Reed Smith have begun taking steps to address both unconscious bias and structural impediments to black lawyer advancement. These steps echo in practical ways those recommended by the American Bar Association's Presidential Initiative Commission on Diversity in 2010 in its report summarizing its findings after a year of hearings on the issues." (link)

The full American Lawyer article is available here and is a very thorough and thoughtful piece.

Several Cities Take Foreclosure Litigation Back to the Banks

Last Friday Los Angeles filed a federal lawsuit against Chase for both redlining and reverse redlining in mortgage lending to minority borrowers.  In short, the city alleges claims for violation of the Fair Housing Act and  restitution, and seeks damages for tax revenue lost to the city as a result of these practices. 

"The lawsuit on Friday is part of the second most populous U.S. city's effort to hold mortgage lenders liable for lost property tax revenue caused by falling home values, and the cost to maintain vacant foreclosed properties.

"LA continues to suffer from the foreclosure crisis - from blight in our neighborhoods to diminished revenue for basic city services," City Attorney Mike Feuer said in a statement. "We're fighting to hold those we allege are responsible to account."

It said the New York-based bank's practices included redlining, where minority borrowers are denied credit on the same terms as other borrowers, and reverse redlining, where borrowers in minority neighborhoods are flooded with subprime loans they cannot afford despite qualifying for better terms." (link)

Los Angeles, and several other cities, previously filed similar lawsuits against other large banks:

"Los Angeles in December filed similar lawsuits against Bank of America Corp , Citigroup Inc and Wells Fargo & Co , the next three largest U.S. banks. Wells Fargo on Wednesday lost its bid to dismiss its lawsuit.

Cook County, Illinois, which encompasses Chicago, has filed similar lawsuits against Bank of America and HSBC Holdings Plc , while Providence, Rhode Island on Thursday sued a unit of Spain's Banco Santander SA .

Baltimore, Cleveland and Memphis, Tennessee are among other cities to bring similar cases against banks. Atlanta-area counties have also sued HSBC.

Los Angeles said JPMorgan loans made from 2004 to 2011 in predominantly black or Latino neighborhoods were 2.19 times more likely to go into foreclosure than loans in mainly white areas. It said loans to minority borrowers went into foreclosure faster."  (link)

Could this approach be the solution to holding banks accountable for the foreclosure crises?

Maybe . . .

Los Angeles' lawsuit against Wells Fargo recently survived a motion to dismiss:

"Law360, New York (May 29, 2014, 2:43 PM ET) -- A California district judge on Wednesday kept alive a lawsuit filed by the city of Los Angeles alleging that Wells Fargo & Co. directed predatory mortgage lending practices at minority borrowers before the financial crisis that led to a wave of foreclosures, costing the city millions of dollars in tax revenue.

U.S. District Judge Otis D. Wright II denied the bank's motion to dismiss the case, ruling that the city had provided enough detailed evidence that predatory lending practices . . . ." (link)

The most recent Los Angeles case is City of Los Angeles v. JPMorgan Chase & Co et al, U.S. District Court, Central District of California, No. 14-04168. 

The press release and complaint are available here.

AARP: Asian Women Most Targeted Group for Age Discrimination in NYC

AARP's analysis found:

"[T]hat Asians report the highest percentage (37%) out of several major ethnicities (Black, Hispanic & White) in NYC when it comes to their, a family member or a friend not being hired for a job since hitting 50. For Asian women the issue is a particular problem, with the group citing age as an issue 43% of the time - a rate 13% higher than their male counterparts and 17% higher than the general 50+ population in the city."  (link)

Age discrimination is unique in that it has the potential to affect all employees at some point in their lives.  In addition, it appears that age discrimination, in some cases, also interacts significantly with and/or is exacerbated by race and sex factors. 

NYC Deadline to Provide Notice of Pregnancy Rights Expires Tomorrow

In 2013 NYC passed an amendment to the New York City Human Rights law broadening protections for pregnant workers.  The amendment requires employers to provide pregnant employees with reasonable accommodations at work.

Before passage of the amendment, pregnant employees were often not entitled to any accommodations because they did not meet the definition of "disabled" under disability discrimination laws. 

As explained in the preamble to the amendment:

"The Council finds that pregnant women are vulnerable to discrimination in the workplace in New York City.  For example, there are reports that women who request an accommodation that will allow them to maintain a healthy pregnancy, or who need a reasonable accommodation while recovering from childbirth, are being removed from their positions, placed on unpaid leave, or fired.  It is the intent of the Council to combat this form of discrimination by requiring employers to provide reasonable accommodations to pregnant women and those who suffer medical conditions related to pregnancy and childbirth.  Such a reasonable accommodation may include bathroom breaks, leave for a period of disability arising from childbirth, breaks to facilitate increased water intake, periodic rest for those who stand for long periods of time, and assistance with manual labor, among other things . . . ." (link)

The new law, which applies to employers with four or more employees, became effective January 30, 2014.  In addition, as of that date, NYC employers (with four or more employees) were required to provide a notice of these new protections to all new hires. 

The deadline to provide the notice to current employees expires tomorrow. 

Employees - if you have not received this notice your employer may be in violation of the New York City Human Rights Law.

Employers - if you have not sent this notice out yet - you might want to get started on that . . . right now.

The notice is below and an overview of the amendment is available here.

SBLS Foreclosure Prevention Project: Don't Let Mandatory Foreclosure Conferences Sunset

Jennifer Sinton, Director of South Brooklyn Legal Service's Foreclosure Prevention Project, talks here on WCNY’s Capitol Pressroom about the important reasons for keeping the mandatory foreclosure settlement conference law going beyond the expiration date of February 15, 2015.