What's happening
This bill requires banks foreclosing on residential properties to offer the homeowner a refinancing opportunity at the lowest recent interest rate.
Why it matters
Provides a potential alternative to foreclosure. by requiring banks to offer homeowners a refinancing opportunity before proceeding, which could help some families stay in their homes and avoid the negative financial and personal consequences of losing their property.
Mandates that refinancing offers be made at the bank's lowest recent interest rate. , regardless of the homeowner’s creditworthiness, income, assets, or payment history—potentially lowering monthly payments even for those facing financial hardship.
Limits the requirement to banks or financial institutions that both originate residential mortgages and are the sole holder of the mortgage. , meaning it does not apply to all mortgage holders (such as entities that buy and service loans on the secondary market).
Sets a one-time offer per foreclosure proceeding and per property/owner. , which prevents repeated obligations for banks but also means homeowners get only a single opportunity per crisis to take advantage of this mandated refinancing.
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Who cares
Headline styles
Require Foreclosure Refinance Offer
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to housing, construction and community development
- 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.
Require Refinancing Before Foreclosure
In Assembly Committee · Judiciary · Sponsor N. Nick Perry
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5124
2019-2020 Regular Sessions
IN SENATE
April 10, 2019
Introduced by Sens. PERSAUD, STAVISKY -- 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 the foreclosing party in a residential foreclosure action to offer a refinancing opportunity to the mortgagor
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 1303 of the real property actions and proceedings law is amended by adding a new subdivision 3-b to read as follows:
3-b. (a) At the time the notice to any residential mortgagor required by paragraph a of subdivision one of this section is delivered to the mortgagor or the mortgagor's agent, the foreclosing party shall also provide an offer to the mortgagor to refinance the mortgage. Such offer shall be included with the summons and complaint at the time such documents are served upon the mortgagor or the mortgagor's agent.
(b) The refinancing offer described in paragraph a of this subdivision shall be an offer to refinance the mortgage at the lowest interest rate offered by the foreclosing party within the thirty days prior to the commencement of the foreclosure proceeding, and shall be irrespective of the borrower's credit rating, income, assets or payment history.
(c) A foreclosing party shall not be required to offer refinancing pursuant to this subdivision more than one time in a foreclosure proceeding or more than one time with respect to the same property while the property is owned by the same mortgagor.
(d) The provisions of this subdivision shall only apply when the foreclosing party is a bank or financial institution that offers mortgages for residential real property as part of its regular course of business and is the sole holder of the mortgage on the property.
§ 2. This act shall take effect on the sixtieth day after it shall have become a law and shall apply to all foreclosures on residential properties commencing on or after such date.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07158-01-9
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 requiring the foreclosing party in a residential foreclosure action to offer a refinancing opportunity to the mortgagor
Purpose
To provide homeowners the opportunity to refinance their home when they receive a foreclosure notice.
Summary of provisions
Section one of the bill adds subdivision 3-b to § 1303 of the real prop- erty actions and proceedings law to require that whenever a bank, or a financial institution that offer mortgages for residential real property as part of its regular course of business, is the sole holder of a mort- gage on the property and delivers a foreclosure notice to a residential mortgagor of an owner-occupied one-to-four family dwelling, that the aforementioned bank or financial institution also provide an offer to refinance the mortgage at the same time. The refinancing offer shall be at the lowest rate offered within the thirty days preceding the origi- nation of the foreclosure proceeding regardless of the borrower's credit rating, income, assets, or payment history.The offer to refinance shall be proffered only once during the foreclosure proceeding or while the property is owned by the same person. This section also states that its application is limited to when the foreclosing party is a bank or finan- cial institution that offers mortgages for residential real property as part of its regular course of business and is the sole holder of the mortgage on the property.
Read the full memo (653 words)
Section two of the bill provides the effective date.
Justification
New Yorkers are still feeling the economic impacts of the 2008 financial crisis. The 2017 Report of the Chief Administrator of the Courts on the Status of Foreclosures found that there were 50,000 foreclosure cases pending in New York State. At the time the report was published there were approximately 27,000 new filings, an amount greater than before the crisis began in 2007. In addition, according to ATTOM Data Solutions, a firm that tracks foreclosures, New York was at its highest rate of fore- closure auctions since 2006, up 9%, bucking the national trend. In fact, New York ranked 10th in foreclosure rates by state, with 1 home in every 1,672 being foreclosed on. And most alarmingly, according to a 2017 Patch article, the high foreclosure rate for the borough of Brooklyn can be attributed almost exclusively to impacted neighborhoods in East Brooklyn.
The legislature has enacted numerous pieces of legislation to assist homeowners threatened by foreclosure; however, these startling statis- tics demonstrate that more needs to be done and that homeowners need other options to foreclosure. One option that banks typically offer homeowners is a loan modification, which may help a homeowner in the short term by reducing their monthly payment, but comes at the cost of considerably lengthening the loan over a significant amount of years and potentially putting them at risk of losing their home in the future. A better option to help people stay in their homes is by providing home- owners the option to refinance their mortgage. Amongst other things, this option allows homeowners to utilize the equity that they have built up in their home through any number of factors including but not limited to, the increase in market value of their home. If a homeowner is able to refinance their home, potentially at a lower interest rate, they may be able to receive a monthly mortgage payment that not only is more manageable but is also structured in such a way where the debt is significantly less and facilitates an environment that will help home- owners avoid foreclosure. Enactment of this legislation will afford people a greater opportunity to stay in their homes.
Prior legislative history
New bill
Fiscal implications
None to the State
Effective date
Sixtieth day after becoming law and shall apply to all foreclosures on residential properties begun on or after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.