What's happening
This bill expands foreclosure requirements and borrower protections to all mortgage loans, not just high-cost or subprime loans.
Why it matters
Broadens key foreclosure protections. By applying requirements previously limited to high-cost and subprime loans to all mortgage loans, the bill ensures that more homeowners benefit from crucial safeguards during foreclosure, such as proper documentation and compliance with consumer protection laws.
Levels the legal playing field for all borrowers. Under this amendment, all borrowers (not just those with high-risk loans) can use violations of specific banking and foreclosure laws as a defense in court, potentially stopping or delaying improper foreclosures.
Increases accountability for mortgage holders and servicers. Lenders must now affirmatively prove ownership of the mortgage and compliance with relevant laws before foreclosing on any type of residential mortgage, which may deter fraudulent or erroneous filings and protect homeowners from wrongful foreclosure actions.
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Who cares
Headline styles
Expand Foreclosure Safeguards
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
2 Co-sponsors
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.416
- Referred to housing, construction and community development
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.644
- Referred to housing, construction and community development
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.
Expand Foreclosure Protections
Assembly Floor Calendar · Sponsor Helene Weinstein
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3216
2019-2020 Regular Sessions
IN SENATE
February 4, 2019
Introduced by Sen. COMRIE -- 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 foreclosure of mortgages
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1302 of the real property actions and proceedings law, as amended by chapter 472 of the laws of 2008, is amended to read as follows:
§ 1302. Foreclosure of [high-cost home loans and subprime home loans] mortgages. 1. Any complaint served in a proceeding initiated pursuant to this article [relating to a high-cost home loan or a subprime home loan, as such terms are defined in section six-l and six-m of the banking law, respectively,] must contain an affirmative allegation that at the time the proceeding is commenced, the plaintiff:
(a) is the owner and holder of the subject mortgage and note, or has been delegated the authority to institute a mortgage foreclosure action by the owner and holder of the subject mortgage and note; and
(b) has complied with all of the provisions of section five hundred ninety-five-a of the banking law and any rules and regulations promulgated thereunder, section six-l or six-m of the banking law, and section thirteen hundred four of this article.
2. It shall be a defense to an action to foreclose a mortgage [for a high-cost home loan or subprime home loan] that the terms of the home loan or the actions of the lender violate any provision of section six-l or six-m of the banking law or section thirteen hundred four of this article.
§ 2. This act shall take effect on the first of January next succeeding the date on which it shall have become a law and shall apply to actions commenced on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00876-01-9
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 foreclosure of mortgages
Summary of provisions of bill
Section 1: Amends section 1302 of RPAPL to require that foreclosing plaintiffs plead ownership of the note and mortgage applicable to all homeowners instead of limited to only homeowners with subprime and high- cost home loans.
It also ensures that RPAPL 1302 defenses are applicable to all homeown- ers instead of limited to just homeowners with subprime and high-cost home loans.
Section 2: Sets the effective date on the first of January after it shall have become law.
Justification
There has been a nationwide increase in foreclosures throughout the country. However, many of the foreclosure actions initiated by lenders and trusts to obtain the securitized debt obligation (the property)," have called into question the inherent legality of the proceedings, due to the plaintiffs lack of "standing" and in many cases it is simply not clear who actually owns the mortgage or debt. Despite the fact that in order to have an appropriate foreclosure proceeding the filing party must legally have "standing to commence a foreclosure action" against a mortgagor or borrower, many lenders and trusts alike continue to move forward with bringing a legal action against borrowers when many of these lenders don't even own the debts in the first place.
In New York, numerous court decisions have held that if the borrower doesn't raise standing upon answering the foreclosure action, the defense of standing is waived for the borrower. See, HSBC Bank USA v. Dammond, 59 AD3d 679 (2nd Dept 2009). Unfortunately, many times the borrower often has no way of knowing who owns the loan, and despite the clear requirement that the plaintiff own the note, if the defendant borrower does not raise the issue initially in an answer or pre-answer motion to dismiss up front, they may never be able to raise it again. In this situation, an entity foreclosing can foreclose on a home they don't have any legal right to foreclose on.
The proposed bill would require plaintiffs in a foreclosure action to plead ownership of the note and mortgage for all home loans and would enable all homeowners to avail the statutory defenses to protect their homes, as opposed to just those homeowners with subprime or high-cost home loans.
Legislative history
2016: A.10373-Rules 2017-18: S.5928/A.1371
Fiscal implications for state and local governments
None.
Effective date
First of January after it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.