senate Bill S3818

2013-2014 Legislative Session

Requires the provision of notice to mortgagors in default for thirty days or more

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Archive: Last Bill Status - In Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to housing, construction and community development
Feb 21, 2013 referred to housing, construction and community development

S3818 - Bill Details

See Assembly Version of this Bill:
A5009
Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Real Property Actions and Proceedings Law
Laws Affected:
Add ยง1304-a, RPAP L

S3818 - Bill Texts

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Requires the provision of notice to mortgagors in default for thirty days or more regarding assistance and the necessity of maintaining their residences.

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BILL NUMBER:S3818

TITLE OF BILL: An act to amend the real property actions and
proceedings law, in relation to requiring the provision of notice to
mortgagors in default for thirty days or more

PURPOSE: To require mortgagors in default be notified of their
default in a timely manner, be provided with information of legal
organizations available to provide assistance and be provided a
reminder of the mortgagor's continuing responsibilities for the
mortgages property.

SUMMARY OF SPECIFIC PROVISIONS:

Section one amends the real property actions and proceedings law by
adding a new section 1304 - a to require that, when a mortgagor is in
default for thirty days or more, the lender, assignee or mortgage loan
servicer must send a notice to the mortgagor. The notification must be
sent by registered or certified mail, no later than forty five (45)
days after the mortgagor defaults. The notice will list the name and
contact information for a legal service provider and a housing
counselor approved by the New York State Attorney General and located
in the same county as the mortgaged property, It also requires that
the notice list the contact information for both the toll-free
foreclosure helpline maintained by the New York State Attorney General
and the toll-free helpline maintained by the New York State Department
of Financial Services, Finally, the notification lists the
responsibilities of a homeowner (i.e., upkeep, property taxes, utility
bills).

JUSTIFICATION: This bill aims to reduce the incidence of foreclosure
by providing sufficient notice of delinquency to property owners who
have fallen behind on mortgages and helpful information of the many
resources and services available to assist them through what can be a
stressful, complicated and often confusing process.

While a mortgagor has options available to prevent foreclosure,
including legal services, housing counselors, and two toll-free
hotlines maintained by New York State, these services are most
effective early in the process. By providing notice no later than
forty five days after a mortgage goes into default, the bill seeks to
address the situation before it is too late.

The notice provided for in this bill also includes the
responsibilities that property owners have even though their property
is in default. When faced with foreclosure, some simply abandon their
property or erroneously assume that they are no longer responsible for
a property in default, As a result, some properties are neglected and
fall into disrepair. Sometimes completely abandoned, properties become
blighted, dilapidated, and unsafe. They can house illegal drug
operations, are a magnet for arsonists and can create death traps for
firefighters and emergency responders. Furthermore, emergency
demolitions of dangerous structures create a huge drain on local
budgets. This bill seeks to avert these potential problems by ensuring
that property owners are aware of their responsibilities, and continue
to safely maintain them.


This bill complements the federal Dodd-Frank act, enacted in response
to the national foreclosure crisis and which contains a similar notice
provision. The federal regulations currently proposed require an oral
notice of delinquency after thirty days, and written notice forty days
after default. The second notice includes information about the
foreclosure process, housing counselors, the mortgagor's state housing
finance authority, and in some cases loss mitigation options that may
be available,. The federal law does not include a description of a
mortgagor's right and responsibilities, and does not take effect until
January 10, 2014.

PRIOR LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: To be determined.

EFFECTIVE DATE: This act shall take effect immediately.

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                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3818

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 21, 2013
                               ___________

Introduced  by  Sen. KENNEDY -- 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 provision of notice to mortgagors in default
  for thirty days or more

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The real property actions and proceedings law is amended by
adding a new section 1304-a to read as follows:
  S  1304-A. NOTICE TO MORTGAGORS IN DEFAULT FOR THIRTY DAYS OR MORE. 1.
WHEN A MORTGAGOR OF RESIDENTIAL REAL PROPERTY, INCLUDING  OWNER-OCCUPIED
ONE-TO-FOUR-FAMILY  DWELLINGS, DEFAULTS ON SUCH MORTGAGE FOR THIRTY DAYS
OR MORE, THE LENDER, ASSIGNEE OR MORTGAGE LOAN  SERVICER  SHALL  PROVIDE
NOTICE  TO  THE MORTGAGOR REGARDING INFORMATION AND ASSISTANCE ABOUT THE
FORECLOSURE PROCESS IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION.
  2. THE NOTICE REQUIRED BY THIS SECTION SHALL BE DELIVERED TO THE MORT-
GAGOR BY REGISTERED OR CERTIFIED MAIL TO  THE  RESIDENCE  WHICH  IS  THE
SUBJECT  OF THE MORTGAGE NO LATER THAN FORTY-FIVE DAYS AFTER THE MORTGA-
GOR DEFAULTS ON HIS OR HER MORTGAGE. THE NOTICE REQUIRED BY THIS SECTION
SHALL BE IN BOLD, FOURTEEN-POINT TYPE AND SHALL BE  PRINTED  ON  COLORED
PAPER THAT IS OTHER THAN THE COLOR OF ANY ADDITIONAL LETTER ACCOMPANYING
THE  NOTICE.  THE  TITLE OF THE NOTICE SHALL BE BOLD, TWENTY-POINT TYPE.
THE NOTICE SHALL BE ON ITS OWN PAGE.
  3. THE NOTICE SHALL LIST THE NAME AND CONTACT INFORMATION FOR NO  LESS
THAN  ONE  LEGAL SERVICE PROVIDER THAT IS APPROVED BY THE NEW YORK STATE
ATTORNEY GENERAL THAT IS LOCATED WITHIN THE COUNTY WHERE SUCH  MORTGAGED
RESIDENTIAL REAL PROPERTY IS LOCATED. THE NOTICE SHALL LIST THE NAME AND
CONTACT INFORMATION FOR NO LESS THAN ONE HOUSING COUNSELOR LOCATED WITH-
IN THE COUNTY OF THE MORTGAGOR AND APPROVED BY THE NEW YORK STATE ATTOR-
NEY GENERAL.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08050-02-3

S. 3818                             2

  4.  THE  NOTICE SHALL LIST CONTACT INFORMATION FOR THE TOLL-FREE FORE-
CLOSURE HELPLINE MAINTAINED BY THE NEW YORK STATE ATTORNEY  GENERAL  AND
THE  TOLL-FREE  HELPLINE  MAINTAINED BY THE NEW YORK STATE DEPARTMENT OF
FINANCIAL SERVICES.
  5.  THE  NOTICE TO ANY MORTGAGOR REQUIRED BY THIS SECTION SHALL APPEAR
AS FOLLOWS:
  "HELP FOR HOMEOWNERS IN DEFAULT ON A MORTGAGE FOR 30 DAYS OR MORE"
  "NEW YORK STATE LAW REQUIRES THAT WE SEND YOU THIS  NOTICE  ABOUT  THE
FORECLOSURE PROCESS. PLEASE READ IT CAREFULLY.
  YOU  ARE  CURRENTLY  IN  DEFAULT ON YOUR MORTGAGE FOR 30 DAYS OR MORE.
THIS IS NOT A FORECLOSURE NOTICE. THERE MAY BE SEVERAL WAYS IN WHICH YOU
CAN SAVE YOUR HOME. WE STRONGLY ENCOURAGE YOU  TO  CONTACT  ONE  OF  THE
HOUSING  COUNSELORS  OR  LOCAL  LEGAL SERVICE AGENCIES LISTED BELOW. THE
CONTACT INFORMATION FOR THE TOLL-FREE HELPLINE  MAINTAINED  BY  THE  NEW
YORK STATE ATTORNEY GENERAL AND THE TOLL-FREE HELPLINE MAINTAINED BY THE
NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES ARE ALSO LISTED BELOW.
  YOU  DO  NOT  NEED  TO  WAIT UNTIL YOUR HOME HAS BEEN FORECLOSED ON TO
RECEIVE HELP. NUMEROUS PROGRAMS MAY BE AVAILABLE TO YOU RIGHT NOW.  SOME
MORTGAGE  ASSISTANCE  PROGRAMS  HAVE STRICT TIME LIMITS. IF YOU WAIT TOO
LONG, THEN YOU MAY BECOME INELIGIBLE FOR ASSISTANCE  BY  SOME  OF  THESE
PROGRAMS.  PROFESSIONAL  HOUSING COUNSELORS AND ATTORNEYS MAY BE ABLE TO
ASSIST YOU IN ACCESSING THESE PROGRAMS FREE OF CHARGE.
  YOU HAVE THE RIGHT TO REMAIN IN YOUR HOME UNTIL A FORECLOSURE SALE  IS
SCHEDULED  AND  YOUR HOUSE IS SOLD AT THE AUCTION. THIS PROCESS MAY TAKE
UP TO SEVERAL YEARS. UNTIL SUCH TIME AS A  JUDGMENT  OF  FORECLOSURE  IS
ENTERED  BY A JUDGE AND THE HOUSE IS SOLD AT THE FORECLOSURE AUCTION, NO
ONE MAY FORCE YOU TO LEAVE YOUR HOME.  THIS  INCLUDES  THE  LENDER  THAT
HOLDS YOUR MORTGAGE.
  UNTIL  A  JUDGMENT  OF FORECLOSURE IS ENTERED, YOU ARE RESPONSIBLE FOR
THE UPKEEP OF YOUR HOME. THIS INCLUDES PAYMENT OF WATER BILLS,  PROPERTY
TAXES  (UNLESS THE LENDER IS PAYING SUCH TAXES), AND UPKEEP OF THE EXTE-
RIOR. IF YOU CHOOSE TO LEAVE YOUR HOME BEFORE A JUDGMENT OF  FORECLOSURE
IS  RENDERED,  YOU  ARE STILL RESPONSIBLE FOR THE UPKEEP OF THE HOME AND
THE EXTERIOR, INCLUDING THE YARD. FAILURE TO MAINTAIN THE  PROPERTY  MAY
RESULT IN ADDITIONAL COSTS ABOVE AND BEYOND THE FORECLOSURE PROCEEDINGS,
AS WELL AS BUILDING CODE VIOLATIONS WHICH, IF NOT ADDRESSED, MAY LEAD TO
AN ARREST WARRANT.
  LEGAL SERVICE PROVIDERS:...........(ENTER NAME AND CONTACT INFORMATION
FOR PROVIDER).
  HOUSING  COUNSELOR:..........(ENTER  NAME  AND CONTACT INFORMATION FOR
HOUSING COUNSELOR).
  NEW YORK  STATE  ATTORNEY  GENERAL'S  TOLL-FREE  HOTLINE........(ENTER
NUMBER)  OR  VISIT  THE ATTORNEY GENERAL'S WEBSITE AT.........(ENTER WEB
ADDRESS)
  NEW  YORK  STATE   DEPARTMENT   OF   FINANCIAL   SERVICES'   TOLL-FREE
HOTLINE..........(ENTER   NUMBER)  OR  VISIT  THE  DEPARTMENT'S  WEBSITE
AT..........(ENTER WEB ADDRESS)"
  6. THE ATTORNEY GENERAL SHALL PRESCRIBE THE TELEPHONE NUMBER  AND  WEB
ADDRESS TO BE INCLUDED IN THE NOTICE.
  7.  THE DEPARTMENT OF FINANCIAL SERVICES SHALL PRESCRIBE THE TELEPHONE
NUMBER AND WEB ADDRESS TO BE INCLUDED IN THE NOTICE.
  S 2. This act shall take effect immediately.

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