Pursuant to CPLR § 3408(h)
[a] party to a foreclosure action may not charge, impose, or otherwise require payment from the other party for any cost, including but not limited to attorneys’ fees, for appearance at or participation in the settlement conference.
While banks may “charge” legal fees and costs for prosecuting a foreclosure action, banks are specifically prohibited from requesting legal fees and costs derived from the “settlement conference stage.” In other words, plaintiff’s attorneys may have to appear on 10 settlement conferences out in Riverhead and the bank cannot charge the defendant a dime for it. This is something to consider when engaging in settlement negotiations (repayment/reinstate/payoff/modification) with the bank.
I recently reminded a bank’s firm of § 3408(h) when negotiating a settlement on one of my Queens’ cases – I explained that this could get very costly for plaintiff before it even makes its first motion. We settled the case (at my client’s exact target number) before the settlement conference was even scheduled. The bank waived all attorneys’ fees, late charges and a significant amount of interest. The action is now discontinued and the bank will be issuing (and recording) a satisfaction of mortgage. Case closed.