What to know about your first settlement conference

This information will help you understand your options if:

  • You have a mortgage on your house or condo and
  • The bank has sued you saying that you have not paid your mortgage and 
  • You get a court notice for a “settlement conference” at the courthouse.

This is not legal advice. Get a lawyer if you need legal advice.

What is a settlement conference?

A settlement conference is a meeting between the court, the bank’s attorney, and you to talk about whether there is a way to resolve your foreclosure case without going to trial. Solutions can be a loan modification, deed-in-lieu of foreclosure, or a short sale.

Why should I attend my first settlement conference?

Because it will give you more time to answer the bank’s Complaint and get the court’s help in trying to resolve your case.

When the bank started a case against you, it filed two legal documents: A Summons and a Complaint. These documents should have been served on (given to) you. You have the right to respond to the Summons and Complaint with a legal document called an Answer. This is your chance to tell the court your reasons why the bank should not be allowed to foreclose your home.

So, if you have not already filed an Answer, you have 30 days after the first settlement conference to do so.


If you attend your first settlement conference, your Answer must be served on (delivered to) the bank’s attorney and filed with the clerk in your county no later than 30 days after the conference. Count the days carefully and make sure you do not miss the deadline.  

Why should I answer the bank’s Complaint?

If you do not answer, the judge can issue a “default judgment,” which means the judge will side with the bank. This will allow the bank to foreclose because you have not denied what the bank said in its Complaint and have also not provided your reasons why the bank should not be allowed to foreclose.

What if I have already filed for a loan modification or other form of loss mitigation?

If you have applied for a loan modification or other form of loss mitigation, you should still attend the settlement conference.

What do I have to bring to my first settlement conference?

You MUST bring the following documents to your first settlement conference:

  1. Information on current income tax returns, expenses, property taxes, and applications for loss mitigation that you sent to the bank.

  1. Proof of benefits (e.g., Social Security and food stamps).

  2. If you have tenants, rental agreements or proof of rental income.

  3. Any other relevant documents required by the presiding judge.


What are my rights during my first settlement conference?

At your first settlement conference, the court personnel MUST tell you:
  1. That you are REQUIRED to answer the Complaint.

  2. What is required to answer the Complaint.

  3. That if you do not answer, you may lose the ability to argue against the foreclosure, and for the court to hear your reasons why the bank should not be allowed to foreclose.

The court personnel MUST also give you:
  1. Information about organizations that may be able to help you prevent the foreclosure.

  2. A copy of the “Consumer Bill of Rights.”

Here is what the bank MUST bring to the first settlement conference (and you have the right to see and obtain a copy):
  1. Your mortgage payment history.

  2. A list of the dollar amounts needed to bring your mortgage current (so that you can keep your home) and pay it off.

  3. Mortgage AND note, or copies of them.

  4. Application forms and description of the loss mitigation options available to prevent foreclosure.

  5. Any other documents required by the judge.

If you have applied for a loan modification or other form of loss mitigation, the bank MUST also bring:
  1. A summary of the status of the bank’s evaluation.

  2. A list of any additional items that you must submit to the bank,

  3. An expected date by which the bank will have completed its evaluation.

  4. If denied, the denial letter or other document explaining the reasons for the denial, and the “inputs” used by the bank to calculate “the net present value” (evaluation done by banks in some circumstances to figure out whether it is more cost-effective to modify your loan or foreclose on your home).


What will happen at my first settlement conference?

Each case is different, but generally, the court will try to make one of two decisions:

  1. The court may find that the bank has not dealt with you fairly under the law, called “good faith,” it may:

    • Order the bank to produce documents;

    • Make the bank pay a fine up to $25,000 payable to the State;

    • Award money, called “actual damages and fees,” to you related to the bank’s bad faith, including attorney fees and expenses.

    • Subtract the interest, costs, or fees related to the bank’s bad faith.

    • Any other relief that the court finds proper.

  2. The court may find that you have not dealt with the bank fairly under the law, called “good faith.” If this happens, the court may remove your case from the Settlement Conference Part, which will allow the bank to move forward with the foreclosure case. However, the court must consider “equitable factors” before removing your case from the Settlement Conference Part, including whether a lawyer represented you.

Keep in mind that a decision may not be made at the first conference. Your case may require several settlement conferences.

What else should I know about settlement conferences?

Make sure to attend all of your settlement conferences. If you do not attend, the court will probably release your case from the Settlement Conference Part and the bank will move forward with its foreclosure case against you.

  1. Take notes during your settlement conferences and make sure to meet any deadlines set by the court.

  2. The court may allow either you or the bank’s attorney to appear by telephone or by video-conference.

  3. If you or the bank file a motion (application to the court asking the court to take action), other than a bad faith motion, the court should put the motion on hold until the settlement conferences are complete.

  4. If you obtain a permanent loan modification, it is a good idea to get a copy that is signed by both the bank and you before your case is dismissed. This way, you have proof that the bank signed the modification and your loan is permanently modified. If you are having trouble getting a copy from the bank’s attorney, ask the court for help. You can bring this up at a settlement conference, or write a letter to the court and cc: the bank’s attorney.

  5. You may choose to retain a lawyer or seek assistance from a HUD-approved housing counseling agency, and your lawyer or housing counselor may appear at settlement conferences with you.


This information was provided by Legal Services of the Hudson Valley, serving Westchester, Rockland, Putnam, Dutchess, Orange, Ulster and Sullivan counties. Call (877) 574-8529 for more information.

Was this information helpful?

Last Reviewed: October 20, 2019