Although the lack of judicial supervision1 of the foreclosure process for default upon cooperative apartment mortgages vastly simplifies the lives of lenders’ counsel, under the latest changes in the foreclosure statutes, it creates a nightmare for the title industry insuring titles down the line from such a foreclosure.
In the closing days of 2009, the governor signed into law changes to the procedures in foreclosing on these mortgages. The process is now made more to resemble the procedure for foreclosing on one to four family houses and incorporates procedural features from the Home Equity Theft Prevention Act (HETPA). Numerous new features entered the procedures for co-op foreclosure, on their face clearly intended to create traps for the unwary foreclosing attorney, but more subtly creating traps for title insurers as well.
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