What's happening
This bill, known as "The Good Neighbor Act," requires mortgage foreclosure plaintiffs to maintain foreclosed residential properties in good faith.
Why it matters
Expands responsibility. The bill clarifies that not only lenders but also assignees and mortgage loan servicers are responsible for property upkeep during foreclosure, closing potential loopholes for neglect.
Applies earlier in the foreclosure process. Maintenance obligations now begin at the commencement of a foreclosure action—not just after a judgment—meaning properties must be cared for sooner, reducing neighborhood blight risks.
Defines “good faith” maintenance. The law sets a clear standard by requiring “honesty in fact” and “reasonable standards of fair dealing,” making it easier to hold parties accountable for neglect.
Exempts municipalities from new obligations. Local governments with subordinate mortgages are not held to these maintenance requirements, potentially protecting public resources from added liability.
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Who cares
Headline styles
Require Banks Maintain Foreclosures
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to housing, construction and community development
- Referred to housing, construction and community development
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3640
2017-2018 Regular Sessions
IN SENATE
January 25, 2017
Introduced by Sens. PARKER, AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development
AN ACT to amend the real property actions and proceedings law, in relation to requiring a plaintiff in a mortgage foreclosure action to maintain the subject property in good faith
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. This act shall be known and may be cited as "The Good Neighbor Act".
§ 2. Subdivision 1 of section 1307 of the real property actions and proceedings law, as added by chapter 507 of the laws of 2009, is amended to read as follows:
1. A plaintiff [in] who commences a mortgage foreclosure action [who obtains], including a lender, an assignee or a mortgage loan servicer, seeking a judgment of foreclosure and sale pursuant to section thirteen hundred fifty-one of this article, involving residential real property, as defined in section thirteen hundred five of this article, that is vacant, or becomes vacant after commencement of the action or the issuance of such judgment, or is abandoned by the mortgagor but occupied by a tenant, as defined under section thirteen hundred five of this article, shall in good faith maintain such property until such time as ownership has been transferred through the closing of title in foreclosure, or other disposition, and the deed for such property has been duly recorded; provided, however, that if a municipality or governmental entity holds a mortgage subordinate to one or more mortgages on the residential real property, the municipality or governmental entity shall not be subject to the requirements of this section. As used in this section, the term "good faith" shall be defined as honesty in fact and the observance of reasonable standards of fair dealing.
§ 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06621-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property actions and proceedings law, in relation to requiring a plaintiff in a mortgage foreclosure action to maintain the subject property in good faith
Purpose
To require plaintiffs in mortgage foreclosure actions to Act in good faith at the commencement of a foreclosure action and throughout the foreclosure process
Summary of provisions
Section 1307 of the real property, actions and proceedings law is amended to require plaintiffs from the commencement of foreclosure proceedings to obtain a mortgage foreclosure in 'good faith' and defines 'good faith' as honesty in fact and the observance of reasonable standards of fair dealing.
Justification
Due to New York State's struggling financial situation a financial crisis emerged causing citizens to fall behind on their mortgages and in many instances leave or abandon their homes. In some instances the foreclosing institution will commence the process but not follow through or delay taking control of the property which in some instances can cause the property to become unmaintained and blighted in the surrounding neighborhoods. This law would obligate mortgage foreclosure plaintiffs to act in good faith when it commences a foreclosure and throughout the foreclosure process. Financial institutions cannot delay in taking action in controlling and providing upkeep on the vacant dwelling itself.
Legislative history
2015-16: S.1779/A.335 - Referred to Housing Construction and Community Development 2013-14: S.4055/A.7027 -Referred to Housing Construction and Community Development
Fiscal & local implications
None.
Effective date
Immediately after the bill has become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.