What's happening
This bill requires banks to complete mortgage modification processes even if the mortgage is sold or transferred during negotiations.
Why it matters
Protects homeowners in the middle of mortgage modification. By requiring that the process continue even if the mortgage is sold, the bill prevents borrowers from having to restart negotiations or risk losing progress due to changes in mortgage ownership.
Limits banks’ ability to avoid modification agreements. The law would stop banks from sidestepping modification commitments by selling or transferring loans, ensuring that new owners are bound by any pending or completed modification terms.
Creates consistent standards for mortgage servicers and buyers. Future purchasers of a mortgage must honor ongoing or completed modifications, which could make loan sales less risky for homeowners and less disruptive overall.
Applies broadly to loans older than three months. Any mortgage at least three months old is covered, potentially encompassing a large segment of borrowers and providing widespread consumer protection.
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Who cares
Headline styles
Banks Must Finish Mortgage Mods
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Referred to banks
- Referred to banks
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Banks Must Finish Mortgage Mods
In Senate Committee · Banks · Sponsor Kevin S. Parker
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
722
2017-2018 Regular Sessions
IN ASSEMBLY
January 9, 2017
Introduced by M. of A. PERRY, GALEF, MONTESANO -- read once and referred to the Committee on Banks
AN ACT to amend the banking law, in relation to requiring banks and financial institutions entering into negotiations to modify a mortgage on real property located in this state to be responsible for the continuation of the modification process until its completion regardless of whether the mortgage is sold
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The banking law is amended by adding a new section 6-n to read as follows:
§ 6-n. Responsibility of banks for mortgages being processed for modification. 1. Notwithstanding any provisions of law to the contrary, any bank or financial institution entering into negotiations, including but not limited to processing an application, to modify a mortgage on real property located in this state shall be responsible for the continuation of the modification process until its completion regardless of whether the mortgage is sold, transferred or bundled into a security package for provision to a third party during the modification process.
2. If a mortgage that is the subject of negotiations or application for a modification of the mortgage terms is sold, transferred or bundled into a security package for provision to a third party during the modification process, such mortgage shall be automatically deemed to have been modified as specified in the mortgage modification application and the purchaser of such mortgage must accept any decision rendered with regard to such modification and be bound by the terms of the modification agreement, including the interest rate in effect at the time of processing. The purchaser shall assume all rights and responsibilities necessary to comply with the modified loan.
3. The provisions of this section shall apply to any mortgage loan which is three months or older at the time of the modification process.
§ 2. This act shall take effect on the ninetieth day after it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06250-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.