Lawsuit challenging failure to appoint lawyers for foreclosed NY homeowners settles

In the wake of the 2008 foreclosure crisis, New York State enacted a law requiring parties to a foreclosure proceeding to participate in a settlement conference, and at that hearing the court must decide whether to appoint counsel for the homeowner.

“At the initial conference held pursuant to this section, any defendant currently appearing pro se, shall be deemed to have made a motion to proceed as a poor person under section eleven hundred one of this chapter. The court shall determine whether such permission shall be granted pursuant to standards set forth in section eleven hundred one of this chapter. If the court appoints defendant counsel pursuant to subdivision (a) of section eleven hundred two of this chapter, it shall adjourn the conference to a date certain for appearance of counsel and settlement discussions pursuant to subdivision (a) of this section, and otherwise shall proceed with the conference.” CPLR 3408(b).

In March 2024, the New York Civil Liberties Union (NYCLU) settled a 2023 lawsuit, Fanfair v. Knipel, against the Office of Court Administration (OCA) for failing to adhere to this law.  Going forward, OCA has agreed to “send homeowners a notice informing them of the purpose of the conference and what information they should provide to allow the court to determine whether they should be appointed counsel.”  But also, “Homeowners who are in active foreclosure proceedings that began on or after December 1, 2022, and who were unrepresented at their initial settlement conference but did not receive an appointed-counsel assessment, are entitled to a do-over of that conference, where the court will determine whether the homeowner should be appointed a lawyer.”

Attorney Matthew Berman, who co-counseled the case, wrote about it in “The Right to Counsel No One Was Deciding“ (September 2026), noting in the section on why it matters outside of Brooklyn:

“A right that depends on the defendant knowing to ask for it protects mainly the people who least need protection. CPLR 3408(b) was written to avoid that problem: the homeowner’s appearance is the request. The settlement makes the court system responsible for the decision, and the reporting requirement means the public will be able to see whether it is working.

It is also a reminder that systemic cases are not only brought against employers and landlords. Sometimes the institution that is not following the law is the court system itself, and the same tools apply: a class of people harmed the same way, a clear statute, and a remedy that changes the practice rather than one case.”