STATE OF NEW YORK ________________________________________________________________________ 70 2025-2026 Regular Sessions IN SENATE (Prefiled) January 8, 2025 ___________ Introduced by Sens. KAVANAGH, ADDABBO, BRISPORT, JACKSON, MAY, MYRIE, RAMOS, SANDERS, WEBB -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend the banking law, in relation to mortgage loan servicers The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Section 595-b of the banking law is amended by adding two 2 new subdivisions 3 and 4 to read as follows: 3 3. Actions and damages. (a) Any person who has been injured by reason 4 of any violation of any such rules, regulations or policies as the 5 superintendent may promulgate to effectuate the purposes of this arti- 6 cle, including but not limited to 3 NYCRR 419 or any subsequently 7 promulgated mortgage servicing rules pursuant to this subdivision, may: 8 (i) Bring an action in such person's own name; 9 (ii) Assert a counterclaim; or 10 (iii) If an action is commenced by the mortgagee or anyone acting on 11 its behalf, bring a third party claim, against either the mortgagee 12 and/or the mortgage servicer to enjoin any violations thereof. 13 (b) The person injured pursuant to this section: 14 (i) May recover statutory damages of one thousand dollars per 15 violation; 16 (ii) May recover treble actual damages; and 17 (iii) If awarded damages or injunctive relief, shall also be entitled 18 to recover costs and expenses, including but not limited to reasonable 19 attorneys' fees. 20 (c) The mortgagee and the mortgage servicer shall be jointly and 21 severally liable for any recoveries by an injured mortgagor in any 22 action brought pursuant to this subdivision. 23 4. Compliance with rules, regulations or policies. Material compliance 24 with any such rules, regulations or policies as the superintendent may EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00016-01-5

S. 70 2 1 promulgate to effectuate the purposes of this article, including but not 2 limited to 3 NYCRR 419 or any subsequently promulgated mortgage servic- 3 ing rules pursuant to this subdivision, shall be a condition precedent 4 to commencing an action to foreclose upon a mortgage subject to this 5 article or an action on the note, and the failure to materially comply 6 with such rules, regulations or policies shall be a defense to a fore- 7 closure action or action on the note, even if servicing has been trans- 8 ferred to a different mortgage servicer when a foreclosure action or 9 action on the note is commenced. 10 § 2. This act shall take effect on the thirtieth day after it shall 11 have become a law.

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