Senate Bill S1972

                                 BILL NUMBER:  S1972A

 TITLE OF BILL :

An act to amend the real property actions and proceedings law, in
relation to requiring a lender to ascertain the value of real property
prior to commencing foreclosure proceedings


 PURPOSE :

Enactment of this measure would require a lender that is filing a lis
pendens (notice of foreclosure) demonstrate that they have engaged in
due diligence to assess the actual value of a property before starting
a foreclosure.

 SUMMARY OF PROVISIONS :

Section 1 would amend the real property actions and proceedings law by
adding a new section 1305 by requiring that any foreclosing party in a
mortgage foreclosure obtain an assessment of the actual value of the
property to be foreclosed upon.

 EXISTING LAW :

Under existing law, no foreclosing party is required to obtain the
              

assessed value of the property prior to the actual foreclosure
proceeding.

 JUSTIFICATION :

As part of the foreclosure process lenders fail to ascertain the value
of a property prior to completing the actual foreclosure. By obtaining
the value of the property, based on an accepted valuation of the
property such as an appraisal or broker price opinion, the lender
would need to make a determination as to whether or not they want the
property before beginning the foreclosure process. If it is determined
that the property is worth far less than the value of the distressed
loan the lender may not choose to initiate the proceeding.  If they
choose to proceed with the action, it will be seen as a clear
indication that the lender knows of the state of the property and the
conditions they will be assuming once the proceeding is completed.
This legislation was recommended by the Mayor's Anti-Flipping Task
Force in Buffalo, New York in an effort to reduce the number of vacant
properties in the city and to establish responsibility for repairs and
maintenance.

 LEGISLATIVE HISTORY :

New bill - 2008. Referred to Judiciary.

 FISCAL IMPLICATIONS :

None to New York State.

 LOCAL FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act shall take effect on the 30th day after it shall have become
a law.