Requires lenders, assignees and mortgage loan servicers to submit an affidavit to the court prior to commencing foreclosure proceedings

Title of bill

An act to amend the real property actions and proceedings law, in relation to requiring lenders, assignees and mortgage loan servicers to submit an affidavit to the court prior to commencing foreclosure proceedings

Purpose or general idea of the bill

Requires a signed affidavit prior to the commencement of any foreclosure proceeding. Establishes a class E felony for knowingly violating the provisions of this section.

Summary of provisions

Section 1. Amends the real property actions and proceedings law by adding a new section, 1304-a. Requires a lender, assignee or a mortgage loan servicer to provide the court a signed affidavit that such lender, assignee or mortgage loan servicer has a bond or note secured by a mortgage on such real property. Provides that any person who knowingly violates this section shall be guilty of a class E felony.

Section 2. Effective Date

Existing law

Current statute requires a ninety-day prior notice to the borrower that such borrower could lose his or her home.

Justification

While foreclosures have leveled off in most of New York City, unfortunately in the Bronx, the problem still persists at crisis levels. The cover story in the Bronx Free Press on September 21, 2011 stated in part that: "According to Census data from 2009, the Bronx is not only the poorest borough in the city, but the South Bronx specifically is the poorest district in the country with 256,544 individuals or 38 percent of the population living below the poverty line. This translates to Bronx County having the lowest home ownership rates in New York City, at 20.7 percent - while simultaneously holding the city's highest foreclosure rate: an average of 27.7 foreclosures per 1,000 homeowners in 2010, as noted in a March 2011 report published by the New York State Comptroller's office."

Additionally, the $25 million allocation specifically intended for legal services for foreclosure cases was eliminated from the 2011-2012 State Budget.

While this funding should be restored, steps must be taken to prevent foreclosures before they occur. This legislation will require any entity which holds a bond or note secured by a mortgage to file a signed affidavit that such entity in fact owns such real property. The bill is based on a law which was recently enacted in Nevada, which saw a 92% drop in foreclosure rates as a result of the new law.

Legislative history

2014: S.315 - Referred to Housing, Construction and Community Development/A.162 - Referred to Judiciary 2013: S.315 - Referred to Housing, Construction and Community Development/A.162 - Referred to Judiciary 2012: S.6017 - Notice of Committee Consideration Requested, Committee Discharged and Committed to Rules/A.9109 - Referred to Judiciary

Fiscal implications

None to State.

Effective date

The first of November next succeeding the date on which it shall have become law.