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Assembly Actions -
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| Jun 24, 2009 |
referred to rules |
Senate Bill S51105
2009-2010 Legislative Session
Relates to home mortgage loans, the crime of mortgage fraud and the filing of transfers and assignments of mortgages
download bill text pdfSponsored By
There are no sponsors of this bill.
Archive: Last Bill Status - In Senate Committee Rules Committee
- Introduced
-
- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Delivered to Governor
- Signed By Governor
Actions
2009-S51105 (ACTIVE) - Details
- See Assembly Version of this Bill:
- A8917
- Current Committee:
- Senate Rules
- Law Section:
- Real Property Actions and Proceedings Law
- Laws Affected:
- Amd §§1304, 221 & 713, add §§1305 - 1307, RPAP; amd R3408, CPLR; amd §3-a, Chap 472 of 2008; amd §§6-l, 6-m, 590 & 595-a, Bank L; amd §187.00, add §187.01, Pen L; amd §265-b, RP L
2009-S51105 (ACTIVE) - Sponsor Memo
BILL NUMBER: S51105
TITLE OF BILL : An act to amend the real property actions and
proceedings law, the civil practice law and rules, the banking law and
chapter 472 of the laws of 2008 amending the real property actions and
proceedings law and other laws relating to foreclosure actions on home
mortgage loans, in relation to home mortgage loans; to amend the penal
law, in relation to the crime of mortgage fraud; and to amend the real
property law, in relation to assignments of mortgages and distressed
property consulting contracts; and providing for the repeal of certain
provisions upon expiration thereof
PURPOSE : This bill would: (1) allow a larger population of
distressed homeowners to benefit from consumer protection laws and
foreclosure prevention opportunities currently available only to
borrowers of "high-cost," "subprime" and "non-traditional" home loans;
(2) establish certain requirements for plaintiffs in foreclosure
actions to maintain the foreclosed property; (3) establish protections
for tenants residing in foreclosed properties; and (4) set forth
strong consumer protection provisions to prevent distressed homeowners
from falling prey to rescue scams.
SUMMARY OF PROVISIONS : Section 1 of the bill would amend Real
Property Actions and Proceedings Law ("RPAPL") § 1304 to: (1) expand
the 90-day notice requirement, currently applicable to "high-cost,"
"subprime" and "non-traditional" home loans, to all home loans made
before September 1, 2008; (2) make clear that the requirement to send
a 90-day notice applies not only to the original lender, but to its
assignee as well, if applicable; (3) require lenders, servicers and
assignees to mail the 90-day notice to the borrower in a separate
envelope from any other mailing or notice; (4) eliminate the
requirement that the principal amount of loan be less than the Federal
National Mortgage Association ("Fannie Mae") conforming loan size
limit in order for the loan to qualify as a "home loan"; and (5)
include loans made for the purchase of cooperative ownership within
the definition of "home loan."
Section 2 of the bill would add a new RPAPL § 1305 to establish
protections for tenants in foreclosed residential real property by
requiring a "successor in interest," as such term is defined in the
bill, to provide written notice to the tenant: (1) that the tenant is
entitled to remain in occupancy of such property for the remainder of
the lease term, or a period of 90-days from the date of mailing of the
notice, whichever is greater, on the same terms and conditions as were
in effect at the time of issuance of the judgment of foreclosure and
sale, or the time of transfer of ownership, if such order is not
issued; and (2) of the name and address for communication with the new
owner. This section of the bill would also make clear that the rights
conferred upon tenants by this provision are in addition to any other
rights of the tenant under law.
Section 3 of the bill would add a new RPAPL § 1306 to require each
lender, assignee or mortgage loan servicer to make a regulatory filing
with the Superintendent of Banks ("Superintendent"). In particular,
the filing would be made within three business days of the mailing of
the 90-day notice to the borrower under RPAPL § 1304, and would
include the name, address and the last known telephone number of the
borrower, the amount claimed as due and owing on the mortgage, the
reason or reasons for the default, if known, and any other information
the Superintendent may require.
Section 3 of the bill would also require the Superintendent, with the
assistance of the Commissioner of the Division of Housing and
Community Renewal ("Commissioner"), to develop an electronic database
capable of receiving all filings required by this section, and to
compile information allowing the State to target counseling and
foreclosure prevention efforts to borrowers at risk of foreclosure.
The information acquired by the Superintendent under this section of
the bill would be exempt from the Freedom of Information Law and
various parts of the Personal Privacy Law. Finally, this section of
the bill would authorize the Superintendent to promulgate rules and
regulations to implement the purpose of this section,
Section 4 of the bill would impose a duty to maintain foreclosed
residential real property upon a plaintiff in a foreclosure action who
obtains a judgment of foreclosure and sale pursuant to RPAPL § 1351.
This duty would continue until ownership is transferred through the
closing of title in foreclosure, or other disposition, and the deed
for such property has been duly recorded. In particular, the bill
would require the plaintiff in a foreclosure action to keep abandoned
property in a manner that it does not pose a blight or nuisance, or
create a blighting influence upon neighboring property. If the
property is occupied by a tenant, the plaintiff would have the
additional obligation of keeping the property in a safe and habitable
condition. The municipality in which the property is located, any
tenant, a board of managers of a condominium or a homeowners
association may enforce this obligation. This section of the bill is
not intended to diminish any obligations of the mortgagor or receiver
to maintain the property prior to the closing of the title.
Sections 5 and 6 of the bill would make technical amendments to RPAPL
§§ 221 and 713 in recognition of the additional rights afforded to
tenants under section 4 of the bill.
Section 7 of the bill would amend the Civil Practice Law and Rules
("CPLR") Rule 3408 to: (1) expand the scope of the mandatory
settlement conference in foreclosure proceedings to include cases
pertaining to all home loans; (2) impose upon both plaintiff and
defendant a duty to negotiate in good faith to determine whether a
mutually agreeable resolution is possible; (3) require the court to
compile certain foreclosure information; (4) require the parties in to
bring certain key documents to the mandatory settlement conference;
and (5) require the plaintiff to file a motion of discontinuance and
vacatur of the lis pendens within 120 days following the execution or
any settlement agreement or loan modification.
Section 7-a of the bill would amend Chapter 472 of the Laws of 2008 to
require notice to a defendant in a pending foreclosure ease involving
home loans made prior to January 1, 2003 of his or her right to a
settlement conference.
Section 8 of the bill would amend Banking Law § 6-f to authorize the
Banking Board to adopt rules and regulations to permit banking
institutions to make residential mortgage loans which permit lenders
to receive a share in the future appreciation of the property, but
only when the share compensates the lender for reducing the principal
amount owed to prevent residential foreclosure.
Section 9 of the bill would amend Banking Law § 6-1 to amend the
definition of "home loan" to exclude loans made or fully or partially
guaranteed by the federal housing administration, the United States
Department of Veterans Affairs or the State of New York Mortgage
Agency. The definition of "home loan" is also amended to make clear
that it includes loans for the purchase of cooperatives and that the
limitation on loan size in relation to the "Fannie Mae" conforming
loan limit includes any special limits for high-cost areas.
Section 10 of the bill would amend Banking Law § 6-1 to make clear
that the prohibition on pre-payment penalties is not overridden by
General Obligations Law § 5-501, which allows prepayment penalties
during the first year of a loan. This section of the bill also makes
clear that a mortgage broker must, within three days of receiving an
application, disclose the exact amount and methodology of total
compensation that the broker will receive on the transaction.
Section 11 of the bill would amend Banking Law § 6-m to: (I) clarify
the definition of "fully indexed rate"; (2) establish that the
relevant time period for determining the fully indexed rate of a loan
is at the point when the lender provides a borrower the "good faith
estimate" required under the Real Estate Settlement Procedures Act
("RESPA"); (3) make conforming changes to the definition of "subprirne
home loan"; (4) clarify that the definition of "subprime home loan"
excludes loans made or fully or partially guaranteed by any agency or
instrumentality of the United States or.New York State and includes
loans for the purchase of cooperatives; (5) clarify that mortgage
bankers, like mortgage brokers am prohibited from giving or accepting
kickbacks; and (6) certain other technical and conforming changes.
Section 12 of the bill would make technical changes to Banking Law §
6-m to provide a title for each subdivision.
Section 13 of the bill would amend Banking Law § 590 to clarify that
those who negotiate modifications of home loans and are not otherwise
exempt must be registered as mortgage brokers or be affiliated with
mortgage brokers. This provision of the bill also makes clear that
bona fide housing counseling agencies assisting borrowers at risk of
foreclosure are not deemed to be soliciting or negotiating mortgage
loans for compensation. Finally, this section of the bill includes
loans for the purchase of cooperatives within the definition of
"mortgage loan."
Section 14 of the bill would permit the promulgation of rules and
regulation pertaining to the origination, sale or servicing of
manufactured home loans.
Section 15 of the bill would amend Banking Law § 590 to make clear
that registered mortgage loan servicers who negotiate loan
modifications on behalf of the mortgagee need not register as mortgage
loan brokers. This section of the bill also provides that the
Superintendent may require all registrations and notifications to be
made through the Nationwide Mortgage Loan System and Registry, and
that such an application must be accompanied by a fee as provided by
law.
Section 16 of the bill would amend Banking Law § 595-a to prohibit a
licensee or registrant from taking any upfront fees in connection with
activities constituting the business of distressed property
consulting.
Sections 17 and 18 of the bill would amend Penal Law §§ 187.00 and
187.30 to delete the definition of "person" due to a technical error
with that definition, and instead create an exemption from mortgage
fraud for an individual person who buys a home for personal use, other
than as part of a criminal conspiracy, in order to narrow the
circumstances under which individuals would be exempt from criminal
sanctions afforded by the law. Section 17 of the bill also amends the
definition of "residential mortgage loan" to conform it to the
definition in Banking Law §§ 6-1 and 6-m.
Section 19 of the bill would amend sections 1, 2 and 3 of Part NN of
Chapter 57 of the Laws of 2008, which was part of the 2008 enacted
Budget, to expand the pool of homeowners who are eligible to receive
loan counseling by not-for-profit loan counseling agencies that
benefit from funds appropriated under Chapter 57 of the Laws of 2008.
Section 20 of the bill would amend the Real Property Law § 265-b to
make certain technical and conforming changes.
Section 21 of the bill contains the severability clause of the
legislation.
Section 22 of the bill provides for the effective date.
EXISTING LAW : RPAPL § 1304(1) requires lenders and servicers to
send a notice to borrowers of "high-cost," "subprime" and
"non-traditional" home loans made between January 1, 2003 and
September 1, 2008, advising the borrower of, among other things, the
availability of counseling in their area. This notice must be sent to
the borrower at least 90 days before any legal action may be commenced
against the borrower.
RPAPL §§ 221 and 713 provide fora mechanism to evict occupants from
foreclosed property. Tenants who are named in the underlying
foreclosure action may be evicted by the foreclosure auction purchaser
in various ways, including by the service of a 10-day notice to quit
under Article 7 of RPAPL. Rent controlled and rent stabilized tenants
are immune from eviction post foreclosure.
The law does not currently provide for the collection of statewide
pre-foreclosure statistics.
CPLR Rule 3408 currently requires a mandatory settlement conference
for high-cost, subprime and non-traditional home loans made between
January 1, 2003 and September 1, 2008. The definition of "subprime
home loan" for the purposes of Rule 3408 is determined using an
interest rate trigger based on rates on United States treasury
securities.
The duty to maintain abandoned foreclosed property, or property
occupied by a tenant is not currently imposed on the plaintiff in a
foreclosure action at the issuance of a judgment of foreclosure and
sale. The duty is imposed upon transfer of title, which could be many
months following the issuance of the judgment.
There is no provision of the Banking Law that specifically authorizes
shared appreciation mortgages. Although Banking Law § 6-f refers to
specified "alternative mortgages," shared appreciation mortgages are
not listed. Real Property Law ("RPL") § 280 sets forth parameters for
reverse mortgages, which are a special type of shared appreciation
mortgage, but no other shared appreciation mortgages are mentioned.
Several different provisions of the Banking Law give either the
Banking Board or the Superintendent authority to set terms of various
banking products, including mortgages.
The definition of "home loan" in Banking Law §§ 6-I and 6-m currently
does not exclude mortgages made by governmental entities, such as the
State of New York Mortgage Association, the Federal Housing
Administration and the Department of Veterans Affairs.
Banking Law § 6-m(l)(b) does not define "fully indexed rate" with a
provision accounting for adjustable rate mortgages with introductory
rates. In addition, the definition requires calculations to be
performed at the time the lender receives the completed loan
application.
Banking Law § 6-m(1)(e) defines "subprime home loan" by comparing the
annual percentage rate on the loan with the commitment rate published
by Freddie Mac in the week prior to the week in which the lender
receives the completed loan application. The existing definition does
riot distinguish between "construction only" and "construction to
permanent" financing, or exclude loans guaranteed by an agency or
instrumentality of the United States or the State of New York.
Banking Law § 590 defines "mortgage loan" without the inclusion of
refinancings and loan modifications of existing loans.
Banking Law § 590(b-1) does not require mortgage loan servicers to
register with the Superintendent using the Nationwide Mortgage
Licensing System and to pay the annual fees of such system.
Banking Law § 595-a does not specifically prohibit a mortgage banker
or broker acting as a distressed property consultant from taking an
upfront fee. However, Banking Department regulations permit only
specified upfront fees before there is a commitment from a mortgage
lender.
Penal Law § 187.00 contain mortgage fraud provisions of the Penal Law.
The 2008-09 Budget allows the New York State Housing Trust Fund
Corporation to provide foreclosure prevention services with respect to
"subprime" and "unconventional mortgages.
LEGISLATIVE HISTORY : This is a new proposal.
STATEMENT IN SUPPORT : The mortgage crisis of the past several years
has uprooted families, devastated neighborhoods, and contributed to
the collapse of our financial markets. In 2008, New York State had
over 50,000 foreclosure filings - an increase of almost 30% from 2007.
In response to this crisis, and in light of inaction by the federal
government, New York enacted comprehensive subprime lending reform
legislation in 2008. See Chapter 472 of the Laws of 2008. That
legislation was designed to accomplish two purposes -to protect
borrowers at risk of losing their homes, and to prevent similar crises
from occurring in the future. As the mortgage crisis has worsened,
however, it has become evident that more must be accomplished to
protect New Yorkers in these difficult times and beyond.
This bill would build upon the reforms enacted in the 2008
legislation. In particular, this bill would: (I) allow a larger
population of distressed homeowners to benefit from consumer
protection laws and foreclosure prevention opportunities currently
available only to borrowers of "high-cost," "subprime" and
"non-traditional" home loans; (2) establish certain requirements for
plaintiffs in foreclosure actions to maintain the foreclosed property;
(3) establish protections for tenants residing in foreclosed
properties; and (4) set forth strong consumer protection provisions to
prevent distressed homeowners from falling prey to rescue scams.
1. Helping Protect Distressed Homeowners and Providing Foreclosure
Prevention Opportunities
A. EXPANSION OF 90-DAY NOTICE REQUIREMENT
In 2008, the Legislature enacted RPAPL § 1304 to require lenders and
mortgage loan servicers to provide a notice to distressed borrowers
with "high-cost," "subprime" or "nontraditional" loans consummated
between January 1, 2003 and September 1, 2008. RPAPL § 1304 requires
that the notice contain, among other things, the names and telephone
numbers of government approved housing counseling agencies serving the
borrower's area, and further mandates that the notice must be sent at
least 90 days before any legal action may be commenced against the
borrower.
This bill would expand the scope of this notice by requiring lenders,
mortgage loan servicers and assignees to send the notice to distressed
borrowers of all "home loans." In addition, the bill would amend the
definition of "home loan" under current law to remove the requirement
that the principal amount of the loan not exceed the "Fannie Mae"
conforming loan size limit of $417,000 (with some exceptions) to meet
the definition of "home loan." Finally, the bill would include within
the definition of "home loan" those loans that are made for the
purchase of cooperative apartments.
Taken together, these changes would significantly expand the number of
borrowers who would benefit from the information contained in the
notice and from the allotted 90-day time period during which the
lender and the borrower may attempt to reach a mutually agreeable
resolution without imminent threat of a foreclosure action. The bill
will therefore help reduce the number of foreclosures in the State,
while preserving the remedy of foreclosure where a settlement is not
possible.
B. EXPANSION OF MANDATORY SETTLEMENT CONFERENCE
The 2008, legislation created CPLR Rule 3408 - a rule that established
an early mandatory settlement conference before a court between the
litigants in a foreclosure action. In particular, CPLR Rule 3408
requires the court in a residential foreclosure action involving a
"high-cost," "subprime," or "non-traditional" home loan made between
January 1, 2003 and September 1, 2008, to schedule a mandatory
settlement conference within 60 days of the filing of the proof of
service of the complaint with the county clerk. Under the law, the
plaintiff, or a representative with authority to settle the matter,
must appear at that conference. If the homeowner appears and does not
have an attorney, he or she will be deemed to have made a motion to
proceed as a "poor person" under CPLR § 1101 and the court may, in its
discretion, waive certain procedural requirements and even appoint
counsel for the homeowner under CPLR § 1102(a).
This bill would expand the number of borrowers who are eligible to
receive the benefit of this settlement conference by eliminating the
requirement that the loans be "high-cost," "subprime" and
"non-traditional" home loans made after January 1, 2003. As such, all
borrowers with cases involving home loans would be eligible for the
settlement conference for a period of five years, at which point the
law would revert back to the current law. In addition, this bill would
also establish a requirement for the litigants to negotiate in good
faith to try to reach a mutually agreeable resolution and would
require them to bring certain critical documents to the settlement
conference. The purpose of the good faith requirement is to ensure
that both plaintiff and defendant are prepared to participate in a
meaningful effort at the settlement conference to reach resolution.
Finally, this provision of the bill would also require the court to
compile certain information on newly filed foreclosure actions so that
enhanced outreach may be conducted in particular parts of the State.
These provisions of the bill would therefore allow more homeowners to
benefit from the "second opportunity" afforded by participation in the
mandatory settlement conference after the 90-day notice period
expires.
C. ESTABLISHMENT OF DATA COLLECTION EFFORTS TO TARGET HELP FOR
DISTRESSED HOMEOWNERS
In order to help reduce the number of preventable foreclosures, it is
critical to identify distressed homeowners as soon as possible, and to
target counseling help effectively and expeditiously. Toward that end,
this bill would require lenders, servicers and assignees to make a
regulatory filing with the Superintendent containing information on
borrowers who have been served a 90-day notice. The Superintendent, in
consultation with the Commissioner of DHCR, would be required to
create a database of information gleaned from such filings so that the
State may effectively monitor distressed borrowers and target
counseling help efficiently.
D. EXPANDING THE ALLOCATION OF COUNSELING FUNDS TO HELP BORROWERS OF
ALL HOME LOANS
Part NN of Chapter 57 of the Laws of 2008, enacted as part of the
2008-09 Budget, created a $25 million counseling fund to help
distressed homeowners receive housing counseling. These funds,
however, were restricted to counseling for borrowers of subprime and
"unconventional" home loans. It has been reported that housing
counselors are experiencing difficulties in determining whether
borrowers requiring counseling are indeed borrowers of "subprime" or
"unconventional" loans defined in Chapter 57. This has caused
confusion in implementation and rendered the limitation in the law
unworkable. Furthermore, in light of the increase in foreclosure
filings for non-subprime loans, the restriction that the funds be used
only to counsel borrowers of subprime loans seems unnecessarily
restrictive. This bill would therefore amend Part NN to allow the
funds to he used to counsel borrowers of all "home loans."
2. Helping Protect Neighborhoods and Tenants
A. REQUIRING PLAINTIFFS IN FORECLOSURE ACTIONS TO MAINTAIN CERTAIN
PROPERTY
A significant issue confronting the State as a result of the spike in
foreclosure filings is the maintenance of abandoned property.
Homeowners often abandon their homes upon commencement of a
foreclosure action, and the property goes into disrepair, serving as
an eye sore and nuisance for the rest of the neighborhood. The problem
is compounded when multiple homes are foreclosed upon in the same
neighborhood. Eventually, these properties may become a haven for
crime and drugs, thus decreasing property value in the surrounding
areas and beyond.
This bill would require a plaintiff in a foreclosure action, upon the
issuance of a judgment of foreclosure and sale pursuant to RPAPL §
1351, to maintain the property. In particular, the bill would require
the plaintiff, post-judgment, to keep the property in a manner so that
it does not pose a blight or nuisance, or create a blighting influence
upon neighboring properties. If the property is occupied by a tenant,
the plaintiff must also maintain the property in a safe and habitable
condition. This provision of the bill may be enforced by the
municipality in which the property is located, the tenant occupying
the property, or the board of managers or homeowners association, if
applicable. This provision of the bill is not intended to diminish in
any way the obligations of the mortgagor of the property or the
receiver to maintain the property prior to the closing of title
pursuant to the foreclosure sale.
B. ESTABLISHING A 90-DAY NOTICE REQUIREMENT FOR TENANTS IN FORECLOSED
PROPERTY
The Joint Center for Housing Studies of Harvard University has found
that in 2007, 20% of all foreclosure filings across the country were
in non-owner occupied properties. New York University's Furman Center
for Real Estate and Urban Policy conservatively estimates that 15,000
renter households, or about 38,000 New York City residents were
impacted by foreclosure. Often, renters have been unaware that their
landlords are in default until utilities are shut off or an eviction
notice appears on their door.
This bill would establish protections for tenants in foreclosed
residential real property. In particular, it would require a person or
entity that acquires title to the property to provide notice to the
tenant: (1) that he or she is entitled to remain in occupancy of the
property for the remainder of the lease term, or a period of 90 days
from the mailing of the notice, whichever is greater, on the same
terms and conditions as were in effect at the time of issuance of the
judgment of sale, or as were in effect at the time of transfer of
ownership of the property if no judgment is issued; and (2) of the
name and address of the new owner. This provision would also make
clear that the rights conferred upon a tenant under this bill would be
in addition to any other rights of such tenants as provided by law.
3. Protecting Distressed Homeowners from Rescue Scams
Chapter 472 of the Laws of 2008 enacted comprehensive protections for
distressed homeowners to protect them from falling prey to rescue
scams. One such protection prohibited distressed property consultants
from accepting upfront fees. Because mortgage bankers and brokers are
regulated by the Banking Department, they were exempted them from the
scope of this provision. This bill would expressly preclude any
licensees or registrants from accepting up front fees in connection
with performing the business of distressed property consulting. In
addition, this bill would require distressed property consultants who
help with loan modifications and refinancings (other than
not-for-profit counselors) to register with the Banking Department.
In this manner, the State can ensure that homeowners are adequately
protected and that the business of distressed property consulting is
properly regulated.
BUDGET IMPLICATIONS : This bill will not have an impact on State
finances.
EFFECTIVE DATE ; This bill would take effect immediately, except as
provided in section 20 of the bill.
2009-S51105 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
105
Second Extraordinary Session
I N S E N A T E
June 24, 2009
___________
Introduced by COMMITTEE ON RULES -- (at request of the Governor) -- read
twice and ordered printed, and when printed to be committed to the
Committee on Rules
AN ACT to amend the real property actions and proceedings law, the civil
practice law and rules, the banking law and chapter 472 of the laws of
2008 amending the real property actions and proceedings law and other
laws relating to foreclosure actions on home mortgage loans, in
relation to home mortgage loans; to amend the penal law, in relation
to the crime of mortgage fraud; and to amend the real property law, in
relation to assignments of mortgages and distressed property consult-
ing contracts; and providing for the repeal of certain provisions upon
expiration thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 1, 2 and 5 of section 1304 of the real proper-
ty actions and proceedings law, as added by chapter 472 of the laws of
2008, are amended to read as follows:
1. Notwithstanding any other provision of law, with regard to a [high-
cost] home loan[, as such term is defined in section six-l of the bank-
ing law, a subprime home loan or a non-traditional home loan] MADE
BEFORE SEPTEMBER FIRST, TWO THOUSAND EIGHT, at least ninety days before
a lender, AN ASSIGNEE or a mortgage loan servicer commences legal action
against the borrower, including mortgage foreclosure, [the] SUCH lender,
ASSIGNEE or mortgage loan servicer shall give notice to the borrower in
at least fourteen-point type which shall include the following:
"YOU COULD LOSE YOUR HOME. PLEASE READ THE FOLLOWING
NOTICE CAREFULLY"
"As of ___, your home loan is ___ days in default. Under New York
State Law, we are required to send you this notice to inform you that
you are at risk of losing your home. You can cure this default by making
the payment of _____ dollars by ____.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD12043-13-9
S. 105 2 If you are experiencing financial difficulty, you should know that there are several options available to you that may help you keep your home. Attached to this notice is a list of government approved housing counseling agencies in your area which provide free or very low-cost counseling. You should consider contacting one of these agencies imme- diately. These agencies specialize in helping homeowners who are facing financial difficulty. Housing counselors can help you assess your finan- cial condition and work with us to explore the possibility of modifying your loan, establishing an easier payment plan for you, or even working out a period of loan forbearance. If you wish, you may also contact us directly at __________ and ask to discuss possible options. While we cannot assure that a mutually agreeable resolution is possi- ble, we encourage you to take immediate steps to try to achieve a resol- ution. The longer you wait, the fewer options you may have. If this matter is not resolved within 90 days from the date this notice was mailed, we may commence legal action against you (or sooner if you cease to live in the dwelling as your primary residence.) If you need further information, please call the New York State Bank- ing Department's toll-free helpline at 1-877-BANK-NYS (1-877-226-5697) or visit the Department's website at http://www.banking.state.ny.us" 2. Such notice shall be sent by [the] SUCH lender, ASSIGNEE or mort- gage loan servicer to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and if different, to the residence [which] THAT is the subject of the mort- gage. SUCH NOTICE SHALL BE SENT BY THE LENDER, ASSIGNEE OR MORTGAGE LOAN SERVICER IN A SEPARATE ENVELOPE FROM ANY OTHER MAILING OR NOTICE. Notice is considered given as of the date it is mailed. The notice shall contain a list of at least five [United States department of housing and urban development approved housing counseling agencies, or other] hous- ing counseling agencies as designated by the division of housing and community renewal, that serve the region where the borrower resides. The list shall include the counseling agencies' last known addresses and telephone numbers. The banking department [and/or] AND the division of housing and community renewal shall make available ON THEIR RESPECTIVE WEBSITES a listing, by region, of such agencies [which the]. THE lender, ASSIGNEE or mortgage loan servicer [may] SHALL use EITHER OF THESE LISTS to meet the requirements of this section. 5. (a) ["Annual percentage rate" means the annual percentage rate for the loan calculated according to the provisions of the Federal Truth-in- Lending Act (15 U.S.C. S 1601, et seq.), and the regulations promulgated thereunder by the federal reserve board (as said act and regulations are amended from time to time). (b)] "Home loan" means a [home] loan, including an open-end credit plan, other than a reverse mortgage transaction, in which: (i) [The principal amount of the loan at origination did not exceed the conforming loan size that was in existence at the time of origi- nation for a comparable dwelling as established by the federal national mortgage association; (ii)] The borrower is a natural person; [(iii)] (II) The debt is incurred by the borrower primarily for personal, family, or household purposes; [(iv)] (III) The loan is secured by a mortgage or deed of trust on real estate [upon which there is located or there is to be located a structure or structures intended principally for occupancy of from one to four families which is or will be occupied by the borrower as the borrower's principal dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELL- S. 105 3 ING, OR A CONDOMINIUM UNIT, OR BY ANY CERTIFICATE OF STOCK OR OTHER EVIDENCE OF OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A CORPORATION, PARTNERSHIP OR OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNER- SHIP OF REAL ESTATE, IN EITHER CASE, USED OR OCCUPIED, OR INTENDED TO BE USED OR OCCUPIED WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS AND WHICH IS OR WILL BE OCCUPIED BY THE BORROWER AS THE BORROWER'S PRINCIPAL DWELLING; and [(v)] (IV) The property is located in this state. [(c) "Subprime home loan" for the purposes of this section, means a home loan consummated between January first, two thousand three and September first, two thousand eight in which the terms of the loan exceed the threshold as defined in paragraph (d) of this subdivision. A subprime home loan excludes a transaction to finance the initial construction of a dwelling, a temporary or "bridge" loan with a term of twelve months or less, such as a loan to purchase a new dwelling where the borrower plans to sell a current dwelling within twelve months, or a home equity line of credit. (d) "Threshold" means, for a first lien mortgage loan, the annual percentage rate of the home loan at consummation of the transaction exceeds three percentage points over the yield on treasury securities having comparable periods of maturity to the loan maturity measured as of the fifteenth day of the month in which the loan was consummated; or for a subordinate mortgage lien, the annual percentage rate of the home loan at consummation of the transaction equals or exceeds five percent- age points over the yield on treasury securities having comparable peri- ods of maturity on the fifteenth day of the month in which the loan was consummated; as determined by the following rules: if the terms of the home loan offer any initial or introductory period, and the annual percentage rate is less than that which will apply after the end of such initial or introductory period, then the annual percentage rate that shall be taken into account for purposes of this section shall be the rate which applies after the initial or introductory period. (e) "Non-traditional home loan" shall mean a payment option adjustable rate mortgage or an interest only loan consummated between January first, two thousand three and September first, two thousand eight. (f) For purposes of determining the threshold, the banking department shall publish on its website a listing of constant maturity yields for U.S. Treasury securities for each month between January first, two thou- sand three and September first, two thousand eight, as published in the Federal Reserve Statistical Release on selected interest rates, commonly referred to as the H.15 release, in the following maturities, to the extent available in such release: six month, one year, two year, three year, five year, seven year, ten year, thirty year. (g)] (B) "Lender" means a mortgage banker as defined in paragraph (f) of subdivision one of section five hundred ninety of the banking law or an exempt organization as defined in paragraph (e) of subdivision one of section five hundred ninety of the banking law. S 2. The real property actions and proceedings law is amended by adding a new section 1305 to read as follows: S 1305. NOTICE TO TENANTS. 1. DEFINITIONS. FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING DEFINITIONS SHALL APPLY: (A) "RESIDENTIAL REAL PROPERTY" SHALL MEAN REAL PROPERTY LOCATED IN THIS STATE IMPROVED BY ANY BUILDING OR STRUCTURE THAT IS OR MAY BE USED, IN WHOLE OR IN PART, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS, AND SHALL INCLUDE ANY BUILDING OR STRUCTURE USED FOR BOTH RESIDENTIAL AND COMMERCIAL PURPOSES. S. 105 4 (B) "SUCCESSOR IN INTEREST" SHALL MEAN ANY PERSON OR ENTITY WHO OR WHICH ACQUIRES TITLE IN A RESIDENTIAL REAL PROPERTY PURSUANT TO A JUDG- MENT OF SALE, OR OTHER DISPOSITION DURING THE PENDENCY OF THE FORECLO- SURE PROCEEDING, OR AT ANY TIME THEREAFTER BUT PRIOR TO THE EXPIRATION OF THE TIME PERIOD AS PROVIDED FOR IN SUBDIVISION TWO OF THIS SECTION. (C) "TENANT" SHALL MEAN ANY PERSON WHO AT THE TIME OF A JUDGMENT OF SALE, OR OTHER DISPOSITION DURING THE PENDENCY OF THE FORECLOSURE, APPEARS AS A LESSEE ON A LEASE OF ONE OR MORE DWELLING UNITS OF A RESI- DENTIAL REAL PROPERTY THAT IS SUBORDINATE TO THE MORTGAGE ON SUCH RESI- DENTIAL REAL PROPERTY; OR WHO IS A PARTY TO AN ORAL OR IMPLIED RENTAL AGREEMENT WITH THE MORTGAGOR AND OBLIGATED TO PAY RENT TO THE MORTGAGOR OR SUCH MORTGAGOR'S REPRESENTATIVE, FOR THE USE OR OCCUPANCY OF ONE OR MORE DWELLING UNITS OF A RESIDENTIAL REAL PROPERTY. 2. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A TENANT SHALL HAVE THE RIGHT TO REMAIN IN OCCUPANCY OF THE SUBJECT RESIDENTIAL REAL PROPERTY FOR THE REMAINDER OF THE LEASE TERM IN EFFECT, PROVIDED SUCH LEASE REQUIRES THE RECEIPT OF RENT THAT IS NOT SUBSTANTIALLY LESS THAN THE FAIR MARKET RENT FOR THE PROPERTY WITH THE EXCEPTION OF TENANCIES WHICH ARE SUBSIDIZED BY THE FEDERAL GOVERNMENT, THIS STATE OR ANY POLITICAL SUBDIVISION OF THIS STATE OR WHOSE TENANCY IS SUBJECT TO RENT CONTROL, RENT STABILIZATION OR FEDERAL STATUTORY SCHEMES, OR FOR A PERIOD OF NINETY DAYS FROM THE DATE OF THE MAILING OF THE NOTICE REQUIRED BY SUBDIVISION THREE OF THIS SECTION, WHICHEVER IS GREATER, ON THE SAME TERMS AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF ISSUANCE OF THE JUDGEMENT OF SALE, OR IF NO SUCH JUDGMENT WAS ISSUED, UPON THE TERMS AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF TRANSFER OF OWNERSHIP OF SUCH PROPERTY. 3. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A SUCCESSOR IN INTEREST OF RESIDENTIAL REAL PROPERTY SHALL PROVIDE WRITTEN NOTICE TO ALL TENANTS: (A) THAT THEY ARE ENTITLED TO REMAIN IN OCCUPANCY OF SUCH PROP- ERTY FOR THE REMAINDER OF THE LEASE TERM, OR A PERIOD OF NINETY DAYS FROM THE DATE OF MAILING OF SUCH NOTICE, WHICHEVER IS GREATER, ON THE SAME TERMS AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF ISSUANCE OF THE JUDGMENT OF SALE, OR IF NO SUCH JUDGMENT WAS ISSUED, UPON THE TERMS AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF TRANSFER OF OWNERSHIP OF SUCH PROPERTY; AND (B) OF THE NAME AND ADDRESS OF THE NEW OWNER. ANY PERSON OR ENTITY WHO OR WHICH BECOMES A SUCCESSOR IN INTEREST AFTER THE ISSUANCE OF THE NINETY-DAY NOTICE PROVIDED FOR IN THIS SUBDIVISION, SHALL NOTIFY ALL TENANTS OF ITS NAME AND ADDRESS AND SHALL ASSUME SUCH INTEREST SUBJECT TO THE RIGHT OF THE TENANT TO MAINTAIN POSSESSION AS PROVIDED IN THIS SUBDIVISION. 4. ACCEPTANCE OF RENTAL PAYMENTS BY ANY SUCCESSOR IN INTEREST ON TERMS PROVIDED IN SUBDIVISION THREE OF THIS SECTION SHALL NOT AFFECT THE RIGHT OF THE SUCCESSOR IN INTEREST TO EVICT SUCH TENANT, AS PROVIDED BY LAW, UPON THE EXPIRATION OF THE TIME PERIOD AS PROVIDED IN SUBDIVISION TWO OF THIS SECTION OR EARLIER IF THE TENANT DOES NOT PAY RENT PURSUANT TO ANY LEASE OR ORAL OR IMPLIED RENTAL AGREEMENT IN EFFECT AT THE TIME OF ISSU- ANCE OF THE JUDGMENT OF FORECLOSURE, OR IF NO SUCH JUDGMENT WAS ISSUED, UPON THE TERMS AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF TRANSFER OF OWNERSHIP OF SUCH PROPERTY. 5. THE RIGHTS CONFERRED UPON A TENANT BY SUBDIVISION TWO OF THIS SECTION SHALL BE IN ADDITION TO ANY OTHER RIGHTS OF SUCH TENANT, UNDER LAW, INCLUDING THOSE RIGHTS CONFERRED UPON: (A) ANY TENANT NOT NAMED IN THE FORECLOSURE ACTION; OR (B) ANY TENANT WHOSE TENANCY IS SUBSIDIZED BY THE FEDERAL GOVERNMENT, THIS STATE OR ANY POLITICAL SUBDIVISION OF THIS S. 105 5 STATE; OR (C) ANY TENANT WHOSE TENANCY IS SUBJECT TO RENT CONTROL, RENT STABILIZATION, OR FEDERAL STATUTORY SCHEMES. S 3. The real property actions and proceedings law is amended by adding a new section 1306 to read as follows: S 1306. REGULATORY FILING. 1. EACH LENDER, ASSIGNEE OR MORTGAGE LOAN SERVICER SHALL FILE WITH THE SUPERINTENDENT OF BANKS (SUPERINTENDENT) WITHIN THREE BUSINESS DAYS OF THE MAILING OF THE NOTICE REQUIRED BY SUBDIVISION ONE OF SECTION THIRTEEN HUNDRED FOUR OF THIS ARTICLE THE INFORMATION REQUIRED BY SUBDIVISION TWO OF THIS SECTION. NOTWITHSTAND- ING ANY OTHER PROVISION OF THE LAWS OF THIS STATE, THIS FILING SHALL BE MADE ELECTRONICALLY AS PROVIDED FOR IN SUBDIVISION THREE OF THIS SECTION. ANY COMPLAINT SERVED IN A PROCEEDING INITIATED PURSUANT TO THIS ARTICLE SHALL CONTAIN, AS A CONDITION PRECEDENT TO SUCH PROCEEDING, AN AFFIRMATIVE ALLEGATION THAT AT THE TIME THE PROCEEDING IS COMMENCED, THE PLAINTIFF HAS COMPLIED WITH THE PROVISIONS OF THIS SECTION. 2. EACH FILING DELIVERED TO THE SUPERINTENDENT SHALL BE ON SUCH FORM AS THE SUPERINTENDENT SHALL PRESCRIBE, AND SHALL INCLUDE AT A MINIMUM, THE NAME, ADDRESS, LAST KNOWN TELEPHONE NUMBER OF THE BORROWER, AND THE AMOUNT CLAIMED AS DUE AND OWING ON THE MORTGAGE, AND SUCH INFORMATION AS WILL ENABLE THE SUPERINTENDENT TO ASCERTAIN THE TYPE OF LOAN AT ISSUE. THE SUPERINTENDENT MAY SUBSEQUENTLY REQUEST SUCH FURTHER INFORMATION AS MAY BE REASONABLY NECESSARY TO FACILITATE A REVIEW OF WHETHER THE BORROWER MIGHT BENEFIT FROM COUNSELING OR OTHER FORECLOSURE PREVENTION SERVICES. 3. WITHIN ONE HUNDRED EIGHTY DAYS OF THE EFFECTIVE DATE OF THIS SUBDI- VISION, OR SUCH LATER TIME AS THE SUPERINTENDENT MAY DETERMINE, THE SUPERINTENDENT SHALL DEVELOP WITH THE ASSISTANCE OF THE COMMISSIONER OF THE DIVISION OF HOUSING AND COMMUNITY RENEWAL, AN ELECTRONIC DATABASE THAT SHALL BE CAPABLE OF RECEIVING ALL FILINGS REQUIRED BY THIS SECTION. 4. THE INFORMATION PROVIDED TO THE SUPERINTENDENT PURSUANT TO THIS SUBDIVISION SHALL NOT BE SUBJECT TO ARTICLE SIX OF THE PUBLIC OFFICERS LAW OR PARAGRAPHS (A), (C) AND (D) OF SUBDIVISION ONE OR SUBDIVISION SIX OF SECTION NINETY-FOUR OF THE PUBLIC OFFICERS LAW. ALL SUCH INFORMATION SHALL BE USED BY THE SUPERINTENDENT EXCLUSIVELY FOR THE PURPOSES OF MONITORING ON A STATEWIDE BASIS THE EXTENT OF FORECLOSURE FILINGS WITHIN THIS STATE, TO PERFORM AN ANALYSIS OF LOAN TYPES WHICH WERE THE SUBJECT OF A PRE-FORCLOSURE NOTICE AND DIRECTING AS APPROPRIATE AVAILABLE PUBLIC AND PRIVATE FORECLOSURE PREVENTION AND COUNSELING SERVICES TO BORROWERS AT RISK OF FORECLOSURE. THE SUPERINTENDENT MAY SHARE INFORMATION CONTAINED IN THE DATABASE WITH HOUSING COUNSELING AGENCIES DESIGNATED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL AS WELL AS WITH OTHER STATE AGENCIES WITH JURISDICTION OVER HOUSING, FOR THE PURPOSE OF COOR- DINATING OR SECURING HELP FOR BORROWERS AT RISK OF FORECLOSURE. 5. THE SUPERINTENDENT IS HEREBY AUTHORIZED TO PROMULGATE SUCH RULES AND REGULATIONS AS SHALL BE NECESSARY TO IMPLEMENT THE PURPOSES OF THIS SECTION. S 4. The real property actions and proceedings law is amended by adding a new section 1307 to read as follows: S 1307. DUTY TO MAINTAIN FORECLOSED PROPERTY. 1. A PLAINTIFF IN A FORECLOSURE ACTION WHO OBTAINS A JUDGMENT OF FORECLOSURE AND SALE PURSU- ANT 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 THE ISSUANCE OF SUCH JUDGMENT, OR IS OCCUPIED BY A TENANT, AS DEFINED UNDER SECTION THIRTEEN HUNDRED FIVE OF THIS ARTICLE, SHALL MAINTAIN SUCH PROPERTY UNTIL SUCH TIME AS OWNERSHIP HAS BEEN TRANSFERRED THROUGH THE CLOSING OF S. 105 6 TITLE IN FORECLOSURE, OR OTHER DISPOSITION, AND THE DEED FOR SUCH PROP- ERTY HAS BEEN DULY RECORDED. 2. SUCH PLAINTIFF SHALL HAVE THE RIGHT TO PEACEABLY ENTER UPON SUCH PROPERTY, OR TO CAUSE OTHERS TO PEACEABLY ENTER UPON THE PROPERTY FOR THE LIMITED PURPOSE OF INSPECTIONS, REPAIRS AND MAINTENANCE AS REQUIRED BY THIS SECTION, OR AS OTHERWISE ORDERED BY COURT; PROVIDED, HOWEVER, THAT IF THE PROPERTY IS OCCUPIED BY A TENANT, AT LEAST SEVEN DAYS NOTICE MUST BE GIVEN TO SUCH TENANT, UNLESS EMERGENCY REPAIRS ARE REQUIRED IN WHICH CASE REASONABLE NOTICE SHALL BE PROVIDED TO THE TENANT. 3. THE MUNICIPALITY IN WHICH SUCH RESIDENTIAL REAL PROPERTY IS LOCATED, ANY TENANT LAWFULLY IN POSSESSION, AND A BOARD OF MANAGERS OF A CONDOMINIUM IN WHICH THE PREMISES ARE LOCATED OR A HOMEOWNERS ASSOCI- ATION IF SAID PREMISES ARE SUBJECT TO THE RULES AND REGULATIONS OF SUCH AN ASSOCIATION, SHALL HAVE THE RIGHT TO ENFORCE THE OBLIGATIONS DESCRIBED IN THIS SECTION AFTER AT LEAST SEVEN DAYS NOTICE TO THE PLAIN- TIFF IN THE FORECLOSURE ACTION. ANY ENTITY ACTING PURSUANT TO THIS SUBDIVISION SHALL HAVE A CAUSE OF ACTION AGAINST THE PLAINTIFF IN THE FORECLOSURE ACTION TO RECOVER COSTS INCURRED AS A RESULT OF MAINTAINING THE PROPERTY. 4. IN THE EVENT THE MORTGAGOR OF THE PROPERTY COMMENCES A PROCEEDING IN BANKRUPTCY COURT PRIOR TO THE COMPLETION OF THE PUBLIC AUCTION ORDERED IN THE JUDGMENT OF SALE, THE DUTIES CREATED BY THIS SECTION SHALL BE SUSPENDED DURING THE PENDENCY OF THE BANKRUPTCY PROCEEDING OR UNTIL SUCH TIME AS AN ORDER HAS BEEN ENTERED IN THAT PROCEEDING LIFTING OR REMOVING THE AUTOMATIC STAY OF THE FORECLOSURE SALE. 5. FOR THE PURPOSES OF THIS SECTION "MAINTAIN" SHALL MEAN KEEPING THE SUBJECT PROPERTY IN A MANNER THAT IT DOES NOT POSE A BLIGHT OR NUISANCE, OR CREATE A BLIGHTING INFLUENCE UPON NEIGHBORING PROPERTIES; PROVIDED, HOWEVER, THAT IF THE PROPERTY IS OCCUPIED BY A TENANT, THEN SUCH PROPER- TY MUST ALSO BE MAINTAINED IN A SAFE AND HABITABLE CONDITION. 6. NOTHING CONTAINED IN THIS SECTION SHALL DIMINISH IN ANY WAY THE OBLIGATIONS PURSUANT TO ANY STATE OR LOCAL LAW OF THE MORTGAGOR OF THE PROPERTY OR A RECEIVER OF RENTS AND PROFITS APPOINTED IN AN ACTION TO FORECLOSE A MORTGAGE TO MAINTAIN THE PROPERTY PRIOR TO THE CLOSING OF TITLE PURSUANT TO A FORECLOSURE SALE. S 5. Section 221 of the real property actions and proceedings law, as added by chapter 312 of the laws of 1962, is amended to read as follows: S 221. Compelling delivery of possession of real property. Where a judgment affecting the title to, or the possession, enjoyment or use of, real property allots to any person a distinct parcel of real property, or contains a direction for the sale of real property, or confirms such an allotment or sale, it also may direct the delivery of the possession of the property to the person entitled thereto, SUBJECT TO THE RIGHTS AND OBLIGATIONS SET FORTH IN SECTION THIRTEEN HUNDRED FIVE OF THIS CHAP- TER. If a party, or his representative or successor, who is bound by the judgment, withholds possession from the person thus declared to be enti- tled thereto, the court, by order, in its discretion, besides punishing the disobedience as a contempt, may require the sheriff to put that person into possession. Such an order shall be executed as if it were an execution for the delivery of the possession of the property. S 6. Subdivision 5 of section 713 of the real property actions and proceedings law, as amended by chapter 642 of the laws of 1976, is amended to read as follows: 5. [The] SUBJECT TO THE RIGHTS AND OBLIGATIONS SET FORTH IN SECTION THIRTEEN HUNDRED FIVE OF THIS CHAPTER, THE property has been sold in S. 105 7 foreclosure and either the deed delivered pursuant to such sale, or a copy of such deed, certified as provided in the civil practice law and rules, has been exhibited to him. S 7. Subdivision (a) of rule 3408 of the civil practice law and rules, as added by chapter 472 of the laws of 2008, is amended and four new subdivisions (d), (e), (f) and (g) are added to read as follows: (a) In any residential foreclosure action involving a [high-cost] home loan [consummated between January first, two thousand three and Septem- ber first, two thousand eight, or a subprime or nontraditional home loan, as those terms are defined under section thirteen hundred four of the real property actions and proceedings law] AS SUCH TERM IS DEFINED IN SECTION THIRTEEN HUNDRED FOUR OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW, in which the defendant is a resident of the property subject to foreclosure, the court shall hold a mandatory conference within sixty days after the date when proof of service is filed with the county clerk, or on such adjourned date as has been agreed to by the parties, for the purpose of holding settlement discussions pertaining to the relative rights and obligations of the parties under the mortgage loan documents, including, but not limited to determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resol- ution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate. (D) UPON THE FILING OF A REQUEST FOR JUDICIAL INTERVENTION IN ANY ACTION PURSUANT TO THIS SECTION, THE COURT SHALL SEND EITHER A COPY OF SUCH REQUEST OR THE DEFENDANT'S NAME, ADDRESS AND TELEPHONE NUMBER (IF AVAILABLE) TO A HOUSING COUNSELING AGENCY OR AGENCIES ON A LIST DESIG- NATED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL FOR THE JUDICIAL DISTRICT IN WHICH THE DEFENDANT RESIDES. SUCH INFORMATION SHALL BE USED BY THE DESIGNATED HOUSING COUNSELING AGENCY OR AGENCIES EXCLUSIVELY FOR THE PURPOSE OF MAKING THE HOMEOWNER AWARE OF HOUSING COUNSELING AND FORECLOSURE PREVENTION SERVICES AND OPTIONS AVAILABLE TO THEM. THE COMMISSIONER OF HOUSING AND COMMUNITY RENEWAL, IN COORDINATION WITH THE SUPERINTENDENT OF BANKS, SHALL PROMULGATE RULES AND REGULATIONS THAT GOVERN THE DISSEMINATION AND USE OF SUCH INFORMATION BY DESIGNATED HOUS- ING COUNSELING AGENCIES. (E) THE COURT SHALL SEND A NOTICE TO PARTIES ADVISING THEM OF THE TIME AND PLACE OF THE SETTLEMENT CONFERENCE, THE PURPOSE OF THE CONFERENCE AND THE REQUIREMENTS OF THIS SECTION. THE NOTICE SHALL BE IN A FORM PRESCRIBED BY THE OFFICE OF COURT ADMINISTRATION, OR, AT THE DISCRETION OF THE OFFICE OF COURT ADMINISTRATION, THE ADMINISTRATIVE JUDGE OF THE JUDICIAL DISTRICT IN WHICH THE ACTION IS PENDING, AND SHALL ADVISE THE PARTIES OF THE DOCUMENTS THAT THEY SHOULD BRING TO THE CONFERENCE. FOR THE PLAINTIFF, SUCH DOCUMENTS SHALL INCLUDE, BUT ARE NOT LIMITED TO, THE PAYMENT HISTORY, AN ITEMIZATION OF THE AMOUNTS NEEDED TO CURE AND PAY OFF THE LOAN, AND THE MORTGAGE NOTE AND RIDER. IF THE PLAINTIFF IS NOT THE OWNER OF THE MORTGAGE NOTE, THE PLAINTIFF SHALL PROVIDE THE NAME, ADDRESS AND TELEPHONE NUMBER OF THE LEGAL OWNER OF THE MORTGAGE NOTE. FOR THE DEFENDANT, SUCH DOCUMENTS SHALL INCLUDE, BUT ARE NOT LIMITED TO, PROOF OF CURRENT INCOME SUCH AS THE TWO MOST RECENT PAY STUBS, MOST RECENT TAX RETURN, AND MOST RECENT PROPERTY TAX STATEMENTS. (F) BOTH THE PLAINTIFF AND DEFENDANT SHALL NEGOTIATE IN GOOD FAITH TO DETERMINE WHETHER A MUTUALLY AGREEABLE RESOLUTION IS POSSIBLE. S. 105 8 (G) THE PLAINTIFF MUST FILE A NOTICE OF DISCONTINUANCE AND VACATUR OF THE LIS PENDENS WITHIN ONE HUNDRED TWENTY DAYS AFTER ANY SETTLEMENT AGREEMENT OR LOAN MODIFICATION IS FULLY EXECUTED. S 7-a. Section 3-a of chapter 472 of the laws of 2008, amending the real property actions and proceedings law and other laws relating to foreclosure actions on home mortgage loans, is amended to read as follows: S 3-a. For any foreclosure action on a [residential mortgage] HOME loan AS DEFINED BY SECTION 1304 OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW, in which the action was initiated prior to September 1, 2008 but where the final order of judgment has not [yet] been issued, the court shall request each plaintiff to identify whether the loan in foreclosure is a subprime home loan as defined in section 1304 of the real property actions and proceedings law AS IN EFFECT ON THE EFFECTIVE DATE OF THIS SECTION or is a high-cost home loan as defined in section 6-l of the banking law. If the loan is a subprime home loan AS THAT TERM IS USED IN THE PRECEDING PARAGRAPH or high-cost home loan, the court shall notify the defendant that if he or she is a resident of such property, he or she may request a settlement conference. FOR ANY FORECLOSURE ACTION ON A HOME LOAN THAT IS NOT A SUBPRIME HOME LOAN OR A HIGH-COST HOME LOAN (AS THOSE TERMS ARE USED IN THE PRECEDING PARAGRAPHS), IN WHICH THE FORECLOSURE ACTION WAS INITIATED PRIOR TO THE DATE THAT SUCH FORECLOSURE ACTION BECAME SUBJECT TO THE PROVISIONS OF RULE 3408 OF THE CIVIL PRACTICE LAW AND RULES BUT WHERE THE FINAL ORDER OF JUDGMENT HAS NOT BEEN ISSUED, THE COURT SHALL NOTIFY THE DEFENDANT THAT IF HE OR SHE IS A RESIDENT OF SUCH PROPERTY, HE OR SHE MAY REQUEST A SETTLEMENT CONFERENCE. If the defendant requests a conference, the court shall hold such conference as soon as practicable for the purpose of holding settlement discussions pertaining to the rights and obligations of the parties under the mortgage loan documents, including but not limited to, deter- mining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home, and evaluating the potential for a resolution in which payment schedules or amounts may be modified or other workout options may be agreed to, and for whatever other purposes the court deems appropriate. At any conference held pursuant to this section, the plaintiff shall appear in person or by counsel, and if appearing by counsel, such coun- sel shall be fully authorized to dispose of the case. The defendant shall appear in person or by counsel. If the defendant is appearing pro se, the court shall advise the defendant of the nature of the action and his or her rights and responsibilities as a defendant. Where appropri- ate, the court may permit a representative of the plaintiff to attend the settlement conference telephonically or by video-conference. S 8. Intentionally omitted. S 9. Paragraph (e) of subdivision 1 of section 6-1 of the banking law, as added by chapter 626 of the laws of 2002 and subparagraph (i) as amended by chapter 552 of the laws of 2007, is amended to read as follows: (e) "Home loan" means a [home] loan, including an open-end credit plan, other than a reverse mortgage transaction, in which: (i) The principal amount of the loan AT ORIGINATION does not exceed the conforming loan size limit for a comparable dwelling as established from time to time by the federal national mortgage association; (ii) The borrower is a natural person; S. 105 9 (iii) The debt is incurred by the borrower primarily for personal, family, or household purposes; (iv) The loan is secured by a mortgage or deed of trust on real estate [upon which there is located or there is to be located a structure or structures intended principally for occupancy of from one to four fami- lies which is or will be occupied by the borrower as the borrower's principal dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELLING, OR BY A CONDOMINIUM UNIT, OR BY ANY CERTIFICATE OF STOCK OR OTHER EVIDENCE OF OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A CORPORATION, PARTNERSHIP OR OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNERSHIP OF REAL ESTATE, IN EITHER CASE USED OR OCCUPIED OR INTENDED TO BE USED OR OCCU- PIED, WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS AND WHICH IS OR WILL BE OCCUPIED BY THE BORROWER AS THE BORROWER'S PRIN- CIPAL DWELLING; and (v) The property is located in this state. S 10. Paragraphs (r) and (s) of subdivision 2 of section 6-l of the banking law, as added by chapter 472 of the laws of 2008, are amended to read as follows: (r) No prepayment penalties. [No] NOTWITHSTANDING PARAGRAPH B OF SUBDIVISION THREE OF SECTION 5-501 OF THE GENERAL OBLIGATIONS LAW, NO prepayment penalties or fees shall be charged or collected on a high- cost home loan. A prepayment penalty in a high-cost home loan shall be unenforceable. (s) No abusive yield spread premiums. In arranging a high-cost home loan, the mortgage broker shall, at the time of application, disclose the exact amount and methodology of DETERMINING total compensation that the broker will receive. Such amount may be paid as direct compensation from the lender, direct compensation from the borrower, or a combination of the two. The provisions of this paragraph shall not restrict the ability of a borrower to utilize a yield spread premium in order to offset any up front costs by accepting a higher interest rate. If the borrower chooses this option, any compensation from the lender [which] THAT exceeds the [exact] amount of total compensation owed to the broker must be credited to the borrower. The superintendent shall prescribe the form that such disclosure shall take. This provision shall not restrict a broker from accepting a lesser amount OF COMPENSATION. S 11. Paragraph (d) of subdivision 1 and paragraphs (l) and (n) of subdivision 2 of section 6-m of the banking law, as added by chapter 472 of the laws of 2008, are amended to read as follows: (d) "Home loan" means a [home] loan, including an open-end credit plan, other than a reverse mortgage transaction, in which: (i) The principal amount of the loan AT ORIGINATION does not exceed the conforming loan size limit for a comparable dwelling as established from time to time by the federal national mortgage association; (ii) The borrower is a natural person; (iii) The debt is incurred by the borrower primarily for personal, family, or household purposes; (iv) The loan is secured by a mortgage or deed of trust on real estate [upon which there is located or there is to be located a structure or structures intended principally for occupancy of from one to four fami- lies which is or will be occupied by the borrower as the borrower's principal dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELLING, OR BY A CONDOMINIUM UNIT, OR BY ANY CERTIFICATE OF STOCK OR OTHER EVIDENCE OF OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A CORPORATION, PARTNERSHIP OR OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNERSHIP OF REAL ESTATE, IN EITHER CASE, USED OR OCCUPIED OR INTENDED TO BE USED OR OCCU- S. 105 10 PIED, WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS AND WHICH IS OR WILL BE OCCUPIED BY THE BORROWER AS THE BORROWER'S PRIN- CIPAL DWELLING; and (v) The property is located in this state. (l) Prohibited payments to mortgage BANKERS AND brokers. In making or arranging a subprime home loan, no lender, MORTGAGE BANKER or mortgage broker shall accept or give any fee, kickback, thing of value, portion, split or percentage of charges, other than as payment for goods or facilities that were actually furnished or services that were actually performed. Such payment must be reasonably related to the value of the goods or facilities that were actually furnished or services that were actually performed. (n) No abusive yield spread premiums. In arranging a subprime home loan, the mortgage broker shall, at the time of application, disclose the exact amount and methodology for determining the total compensation that the broker will receive. Such amount may be paid as direct compen- sation from the lender, direct compensation from the borrower, or a combination of the two. The provisions of this paragraph shall not restrict the ability of a borrower to utilize a yield spread premium in order to offset any upfront costs by accepting a higher interest rate. If the borrower chooses this option, any compensation from the lender [which] THAT exceeds the exact amount of total compensation owed to the broker must be credited to the borrower. The superintendent shall prescribe the form that such disclosure shall take. This paragraph shall not restrict a broker from accepting a lesser amount OF COMPENSATION. S 12. Subdivisions 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 and 14 of section 6-m of the banking law, as added by chapter 472 of the laws of 2008, are amended to read as follows: 3. CERTAIN LOAN PROVISIONS RENDERED VOID. Any provision in a subprime home loan that violates subdivision two of this section shall be rendered void. 4. [No arrangement of certain subprime loans] ABILITY TO REPAY. No lender or mortgage broker shall make or arrange a subprime home loan unless the lender or mortgage broker reasonably and in good faith believes at the time [the loan is consummated] OF THE LOAN CLOSING that one or more of the borrowers, when considered individually or collec- tively, has the ability to repay the loan according to its terms and to pay applicable real estate taxes and hazard insurance premiums. If a lender or mortgage broker making or arranging a subprime home loan knows that one or more home loans secured by the same real property will be made contemporaneously to the same borrower with the subprime home loan being made or arranged by that lender or mortgage broker, the lender or mortgage broker making or arranging the subprime home loan must document the borrower's ability to repay the combined payments of all loans on the same real property. (a) A lender or mortgage broker's analysis of a borrower's ability to repay a subprime home loan according to the loan terms and to pay related real estate taxes and insurance premiums shall be based on a consideration of the borrower's credit history, current and expected income, current obligations, employment status, and other financial resources other than the borrower's equity in the real property that secures repayment of the subprime home loan. (b) In determining a borrower's ability to repay a subprime home loan, the lender or mortgage broker shall take reasonable steps to verify the accuracy and completeness of information provided by or on behalf of the S. 105 11 borrower using tax returns, payroll receipts, bank records, reasonable alternative methods, or reasonable third-party verification. (c) In determining a borrower's ability to repay a subprime home loan according to its terms when the loan has an adjustable rate feature, the lender or mortgage broker shall calculate the monthly payment amount for principal and interest by assuming (i) the loan proceeds are fully disbursed on the date of the loan closing, (ii) the loan is to be repaid in substantially equal monthly amortizing payments of principal and interest over the entire term of the loan, with no balloon payment, and (iii) the interest rate over the entire term of the loan is a fixed rate equal to the fully indexed rate at the time of the loan closing, without considering any initial discounted rate. (d) A lender or mortgage broker's analysis of a borrower's ability to repay a subprime home loan may utilize reasonable commercially recog- nized underwriting standards and methodologies, including automated underwriting systems, provided the standards and methodologies comply with the provisions of this section. 5. REQUIRED LEGEND. Subprime home loan mortgages shall include a legend on top of the mortgage in twelve-point type stating that the mortgage is a subprime home loan subject to this section. 6. EVASION OF STATUTORY REQUIREMENTS. The provisions of this section shall apply to any person who [in bad faith] attempts to avoid the application of this section by any subterfuge, including but not limited to, splitting or dividing any loan transaction into separate parts for the purpose of evading the provisions of this section. 7. GOOD FAITH ERROR. A lender of a subprime home loan that, when acting in good faith, fails to comply with the provisions of this section, shall not be deemed to have violated this section if, prior to the institution of any action and before the borrower is prejudiced, the lender notifies the borrower of the compliance failure, appropriate restitution is made, and whatever adjustments that are necessary are made to the loan to make the loan satisfy the requirements of this section. 8. ENFORCEMENT. The attorney general or the superintendent may enforce the provisions of this section. 9. DAMAGES. Any person found by a preponderance of the evidence to have violated this section shall be liable to the borrower of a subprime home loan for actual damages. 10. ATTORNEYS FEES. A court may also award reasonable attorneys' fees to a prevailing borrower in a foreclosure action. 11. EQUITABLE RELIEF. A borrower may be granted injunctive, declarato- ry and such other equitable relief as the court deems appropriate in an action to enforce compliance with this section. 12. REMEDIES NOT EXCLUSIVE. The remedies provided in this section are not intended to be the exclusive remedies available to a borrower of a subprime home loan. 13. DEFENSE TO FORECLOSURE. In any action by a lender or assignee to enforce a loan against a borrower in default more than sixty days or in foreclosure, a borrower may assert as a defense, any violation of this section. 14. SEVERABILITY. The provisions of this section shall be severable, and if any phrase, clause, sentence, or provision is declared to be invalid, or is preempted by federal law or regulation, the validity of the remainder of this section shall not be affected thereby. If any provision of this section is declared to be inapplicable to any specific category, type, or kind of points and fees with respect to a home loan, S. 105 12 the provisions of this section shall nonetheless continue to apply with respect to all other points and fees. S 13. Paragraphs (a) and (d) of subdivision 1 of section 590 of the banking law, as added by chapter 571 of the laws of 1986, are amended to read as follows: (a) "Mortgage loan" shall mean a loan to a natural person made prima- rily for personal, family or household use, [primarily] secured by either a mortgage OR DEED OF TRUST on residential real property [or certificates], ANY CERTIFICATE of stock or other evidence of ownership [interests] in, and proprietary [leases] LEASE from, [corporations or partnerships] A CORPORATION OR PARTNERSHIP formed for the purpose of cooperative ownership of residential real property OR, IF DETERMINED BY THE BANKING BOARD BY REGULATION, SHALL INCLUDE SUCH A LOAN SECURED BY A SECURITY INTEREST ON A MANUFACTURED HOME; (d) "Soliciting, processing, placing or negotiating a mortgage loan" shall mean for compensation or gain, either directly or indirectly, accepting or offering to accept an application for a mortgage loan, assisting or offering to assist in the processing of an application for a mortgage loan, soliciting or offering to solicit a mortgage loan on behalf of a third party or negotiating or offering to negotiate the terms or conditions of a mortgage loan with a lender on behalf of a third party; PROVIDED THAT, FOR PURPOSES OF THIS SECTION, A BONA FIDE NOT-FOR-PROFIT ORGANIZATION THAT OFFERS COUNSELING OR ADVICE TO HOMEOWN- ERS IN FORECLOSURE OR LOAN DEFAULT WITH A LOAN MODIFICATION OR REFINANC- ING SHALL NOT BE DEEMED TO BE SOLICITING, PROCESSING, PLACING OR NEGOTI- ATING A MORTGAGE LOAN FOR COMPENSATION OR GAIN; S 14. Paragraphs (c) and (d) of subdivision 3 of section 590 of the banking law are relettered paragraphs (d) and (e), and a new paragraph (c) is added to read as follows: (C) SUCH RULES AND REGULATIONS UNDER THIS ARTICLE REGARDING THE ORIGI- NATION, SALE OR SERVICING OF MANUFACTURED HOME LOANS AS MAY BE NECESSARY AND APPROPRIATE FOR THE PROTECTION OF CONSUMERS; S 15. Paragraphs (b) and (b-1) of subdivision 2 of section 590 of the banking law, paragraph (b) as amended and paragraph (b-1) as added by chapter 472 of the laws of 2008, are amended to read as follows: (b) No person, partnership, association, corporation or other entity shall engage in the business of soliciting, processing, placing or nego- tiating a mortgage loan or offering to solicit, process, place or nego- tiate a mortgage loan in this state without first being registered with the superintendent as a mortgage broker in accordance with the registra- tion procedure provided in this article and by such regulations as may be promulgated by the banking board or prescribed by the superintendent. The registration provisions of this subdivision shall not apply to any exempt organization [or], mortgage banker OR MORTGAGE LOAN SERVICER. No real estate broker or salesman, as defined in section four hundred forty of the real property law, shall be deemed to be engaged in the business of a mortgage broker if he does not accept a fee, directly or indirect- ly, for services rendered in connection with the solicitation, process- ing, placement or negotiation of a mortgage loan. No attorney-at-law who solicits, processes, places or negotiates a mortgage loan incidental to his legal practice shall be deemed to be engaged in the business of a mortgage broker. The registration provisions of this subdivision shall not apply to any person or entity which shall be exempted in accordance with regulations promulgated by the banking board hereunder. (b-1) No person, partnership, association, corporation or other entity shall engage in the business of servicing mortgage loans with respect to S. 105 13 any property located in this state without first being registered with the superintendent as a mortgage loan servicer in accordance with the registration procedure provided by such regulations as may be prescribed by the superintendent. The superintendent may refuse to register a mort- gage loan servicer on the same grounds that he or she may refuse to issue a registration certificate to a mortgage broker pursuant to subdi- vision two of section five hundred ninety-two-a of this article. The registration provisions of this subdivision shall not apply to any exempt organization, mortgage banker, or mortgage broker or any person or entity which shall be exempted in accordance with regulations prescribed by the superintendent hereunder; provided that such exempt organization, mortgage banker, mortgage broker, or exempted person noti- fies the superintendent that it is acting as a mortgage loan servicer in this state and complies with any regulation applicable to mortgage loan servicers, promulgated by the banking board or prescribed by the super- intendent with respect to mortgage loan servicers. THE SUPERINTENDENT MAY REQUIRE ALL REGISTRATIONS AND NOTIFICATIONS TO BE MADE THROUGH THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY. AN APPLICATION TO BECOME A REGISTERED MORTGAGE LOAN SERVICER OR ANY APPLICATION WITH RESPECT TO A MORTGAGE LOAN SERVICER SHALL BE ACCOMPANIED BY A FEE AS PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER. ANY FEE ESTABLISHED PURSUANT TO THIS SUBDIVISION MAY BE COLLECTED BY AND INCLUDE A PROCESSING FEE CHARGED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY. ANY SUCH PROCESSING FEES SHALL NOT BE REMITTED TO THE SUPER- INTENDENT AND SHALL NOT BE DEEMED REVENUE PURSUANT TO THIS CHAPTER OR THE STATE FINANCE LAW. S 16. Section 595-a of the banking law is amended by adding a new subdivision 5 to read as follows: 5. NO LICENSEE OR REGISTRANT ENGAGING IN ANY ACTIVITIES CONSTITUTING THE BUSINESS OF A DISTRESSED PROPERTY CONSULTANT, AS DESCRIBED IN SECTION TWO HUNDRED SIXTY-FIVE-B OF THE REAL PROPERTY LAW, SHALL CHARGE FOR OR ACCEPT PAYMENT FOR REAL PROPERTY CONSULTING SERVICES AS DEFINED IN SUCH SECTION BEFORE THE FULL COMPLETION OF SUCH SERVICES. S 17. Subdivisions 1, 2 and 4 of section 187.00 of the penal law, as added by chapter 472 of the laws of 2008, are amended to read as follows: 1. "Person" means any individual or entity[, other than an individual who applies for a residential mortgage loan and intends to occupy such residential property which such mortgage secures unless such person acts as an accessory to an individual or entity in committing any crime defined in this article]. 2. "Residential mortgage loan" means a loan or agreement to extend credit, including the renewal [or], refinancing OR MODIFICATION of any such loan, made to a person, which loan is primarily secured by either A mortgage, deed of trust, or other lien upon any interest in residential real property or ANY certificate of stock or other evidence of ownership in, AND A PROPRIETARY LEASE FROM, a corporation or partnership formed for the purpose of cooperative ownership of residential real property. 4. "Residential mortgage fraud" is committed by [any] A person who, knowingly and with intent to defraud, presents, causes to be presented, or prepares with knowledge or belief that it will be used in soliciting an applicant for [a residential mortgage loan], [or in] applying for, [the] underwriting [of,] or closing [of] a residential mortgage loan, or [in documents filed] FILING with a county clerk of any county in the state arising out of and related to the closing of a residential mort- gage loan, any written statement which [he or she knows to]: S. 105 14 (a) [contain] CONTAINS materially false information concerning any fact material thereto; or (b) [conceal] CONCEALS, for the purpose of misleading, information concerning any fact material thereto. S 18. The penal law is amended by adding a new section 187.01 to read as follows: S 187.01 LIMITATION ON PROSECUTION. NO INDIVIDUAL WHO APPLIES FOR A RESIDENTIAL MORTGAGE LOAN AND INTENDS TO OCCUPY SUCH RESIDENTIAL PROPERTY WHICH SUCH MORTGAGE SECURES SHALL BE HELD LIABLE UNDER THIS ARTICLE PROVIDED, HOWEVER, ANY SUCH INDIVIDUAL WHO ACTS AS AN ACCESSORY TO AN INDIVIDUAL OR ENTITY IN COMMITTING ANY CRIME DEFINED IN THIS ARTICLE MAY BE CHARGED AS AN ACCESSORY TO SUCH CRIME. S 19. Subparagraphs (i) and (vii) of paragraph (e) of subdivision 1 and paragraph (b) of subdivision 2 of section 265-b of the real property law, as added by chapter 472 of the laws of 2008, are amended to read as follows: (i) an attorney admitted to practice in the state of New York WHEN THE ATTORNEY IS DIRECTLY PROVIDING CONSULTING SERVICES TO A HOMEOWNER IN THE COURSE OF HIS OR HER REGULAR LEGAL PRACTICE; (vii) a person licensed as a mortgage banker or registered as a mort- gage broker or registered as a mortgage loan servicer as defined in article twelve-D of the banking law, PROVIDED THAT NO SUCH PERSON SHALL TAKE ANY UPFRONT FEE IN CONJUNCTION WITH ACTIVITIES CONSTITUTING THE BUSINESS OF A DISTRESSED PROPERTY CONSULTANT; (b) charging for or accepting ANY payment for consulting services before the full completion of ALL such services, INCLUDING A PAYMENT TO BE PLACED IN ESCROW PENDING THE COMPLETION OF SUCH SERVICES; S 20. Severability clause. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent juris- diction to be invalid, such judgment shall not affect, impair or invali- date the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered. S 21. This act shall take effect immediately; provided, however, that: a. Section one of this act shall take effect on the thirtieth day after this act shall have become a law and shall apply to legal actions commenced on or after such date; b. Sections two, five and six of this act shall take effect on the thirtieth day after this act shall have become a law and shall apply to residential real property to which title is acquired on or after such date; c. Section three of this act shall take effect on the sixtieth day after this act shall have become a law and shall apply to notices required by section 1304 of the real property actions and proceedings law mailed on or after such date; d. Section four of this act shall take effect on the one hundred twen- tieth day after it shall have become a law; e. Section seven of this act shall take effect on the thirtieth day after this act shall have become a law and shall apply to legal actions filed on or after such date; provided, however that the amendment to subdivision (a) of rule 3408 of the civil practice law and rules, as provided in section seven of this act shall expire and be deemed repealed 5 years after such effective date; S. 105 15 f. Section eleven of this act shall take effect on the sixtieth day after this act shall have become a law; g. Section thirteen of this act shall take effect on the ninetieth day after this act shall have become a law; provided that a person who is not exempt from registration may continue to engage in mortgage loan modification activities after such date if he or she: (i) was engaged in soliciting or negotiating mortgage loan modifications prior to the date this act shall have become a law; (ii) has filed an application for registration with the superintendent of banks; and (iii) has received confirmation that such application is informationally complete, but only until he or she receives notice from the superintendent that such appli- cation has been denied; h. Section fifteen of this act shall take effect on the same date and in the same manner as section 8 of chapter 472 of the laws of 2008, takes effect.
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