senate Bill S3838

2013-2014 Legislative Session

Relates to mortgage foreclosure by power of sale

download bill text pdf

Sponsored By

Archive: Last Bill Status - In Committee


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

do you support this bill?

Actions

view actions (2)
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

S3838 - Bill Details

Current Committee:
Law Section:
Real Property Actions and Proceedings Law
Laws Affected:
Add Art 14 ยงยง1401 - 1421, RPAP L
Versions Introduced in 2011-2012 Legislative Session:
S7240

S3838 - Bill Texts

view summary

Relates to permitting foreclosure of real property improved by a non-residential building or certain multi-family buildings by the power of sale; establishes an effective non-judicial proceeding for uncontested commercial mortgage foreclosure.

view sponsor memo
BILL NUMBER:S3838

TITLE OF BILL: An act to amend the real property actions and
proceedings law, in relation to foreclosure of mortgages by power of
sale

PURPOSE:

This bill would reestablish in state law the option of a non-judicial
proceeding for uncontested commercial mortgage foreclosures.

SUMMARY OF PROVISIONS:

This bill adds a new Article 14 to the RPAPL entitled "Foreclosure of
mortgages by power of sale." These provisions are virtually the same
as the provisions of the previous Article 14, which was originally
enacted in 1998, extended in 2001 and 2005, but expired in 2009. This
Article will provide an alternative, non-judicial mortgage foreclosure
procedure with the following significant provisions:

- the procedure is limited to commercial properties, and generally
excludes residential properties including residential condominium
units and residential buildings owned by a cooperative apartment
corporation; and

- a notice of intention to foreclose must be served upon the mortgagor
and all junior lienors by personal service or by certified mail and
first class mail; and

- a notice of sale must be served upon the mortgagor and other
interested parties at least 30 days before the date of the sale.

The bill contains further provisions governing the conduct of the sale
and the rights of various parties in interest, including the
distribution of the proceeds of the sale, applications for any
surplus, and the pursuit of a deficiency judgment. The bill also
provides a mechanism whereby mortgagors and other interested parties
can seek to convert the proceeding to a contested judicial proceeding
under Article 13 of the RPAPL.

JUSTIFICATION:

The most common procedure for foreclosure of a mortgage in New York
State is set forth in Article 13 of the Real Property Actions and
Proceedings Law. That Article requires judicial action and
intervention at many stages of the process, even when the proceeding
is uncontested. A referee must be appointed, the referee's report must
be approved, and a judgment of foreclosure and sale must be signed and
entered. Due to these many procedural requirements and the substantial
caseload carried by judges in New York State, the various stages of
judicial review can delay such a proceeding, even an uncontested one,
to three years or more.

Such a lengthy and costly process has negative impacts on the court
system. It also has negative impacts on the lending process and the
economy, making credit more costly and more difficult to obtain.
Mortgage lending is vital to the State's real estate industry. That


lending, in turn, is underwritten based on the borrower's ability to
repay the debt and the creditor's ability to obtain prompt, full
repayment in the event of a default. This bill provides a prompt,
economical foreclosure remedy, which will encourage lenders to invest
in real estate in New York.

The bill makes two significant changes from the version of Article 14
that expired in 2009. First, it eliminates the sunset date so that
this nonjudicial option won't suddenly expire when it may be most
needed. Second, during research on the previous law, it was discovered
that a number of commercial lenders were unable to use the law because
title insurance companies would not provide title insurance during the
year-long period after foreclosure when a mortgagor could cause a
court to reconvey property that had been foreclosed on, even when. the
property was sold to an innocent purchaser for value who was neither
the mortgagee nor the mortgagee's nominee and without notice of any
irregularity. This redemption period also made it difficult for
lenders to dispose of foreclosed properties until the one-year period
had expired. Because the bill provides ample opportunities for
mortgagors to challenge the foreclosure, and even convert the
non-judicial process under Article 14 into a judicial process under
Article 13, the redemption period is not needed, is counterproductive
and is not included in this version of Article 14.

New York has long had a nonjudicial process for commercial mortgage
foreclosure. The previous Article 14 was enacted in 1998, and it was
preceded by a different Article 14 which also authorized a nonjudicial
process. However, this nonjudicial process expired on July 1, 2009.
During the twelve years that Chapter 231 of 1998 was in existence, the
law provided legal certainty for both commercial mortgagors and
mortgagees with regard to their respective rights in commercial
foreclosure proceedings. This bill would reestablish a nonjudicial
process and authorize a more timely and more economic alternative for
uncontested foreclosures.

LEGISLATIVE HISTORY:See 5.7240 of 2012. This bill would essentially
reenact into law the previous version of Article 14 RPAPL, which had
been enacted by Chapter 231 of 1998, and extended by Chapters 76 of
2001 and 123 of 2005, but which expired on July 1, 2009.

FISCAL IMPLICATIONS:This bill has no direct fiscal impact to the
state, but should help reduce the burden and costs on the court system
to process these uncontested foreclosures of commercial mortgages.

EFFECTIVE DATE:Immediately, provided however that any proceeding which
commenced following the expiration and repeal of the former Article 14
RPAPL on 7/1/09 shall be eligible under this act, pursuant to an
agreement of both parties.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3838

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 21, 2013
                               ___________

Introduced  by  Sen.  FARLEY -- 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 foreclosure of mortgages by power of sale

  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 article 14 to read as follows:
                                ARTICLE 14
                FORECLOSURE OF MORTGAGE BY POWER OF SALE
SECTION 1401. WHEN MORTGAGE MAY BE FORECLOSED.
        1402. NOTICE OF INTENTION TO FORECLOSE.
        1403. NOTICE OF PENDENCY OF NON-JUDICIAL PROCEEDING FOR FORECLO-
                SURE BY POWER OF SALE.
        1404. CONTENTS OF NOTICE OF SALE.
        1405. NOTICE OF SALE; HOW GIVEN.
        1406. NOTICE OF SALE; HOW SERVED.
        1407. SALE; HOW POSTPONED.
        1408. SALE; HOW CONDUCTED.
        1409. MORTGAGEE OR SUCCESSOR IN INTEREST MAY PURCHASE.
        1410. RIGHT TO REDEEM OF MORTGAGOR, SUBORDINATE LIENOR, OR HOLD-
                ER OF SUBORDINATE INTERESTS.
        1411. EFFECT OF SALE.
        1412. CONVEYANCE.
        1413. DISTRIBUTION OF PROCEEDS OF SALE.
        1414. REPORT OF SALE.
        1415. FILING OF REPORT OF SALE.
        1416.  MULTIPLE  COLLATERAL;  DESIGNATION  OF  ORDER  OF SALE OF
                PARCELS.
        1417. COSTS AND EXPENSES ALLOWED.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08833-01-3

S. 3838                             2

        1418. APPLICATION FOR SURPLUS.
        1419. DEFICIENCY JUDGMENT.
        1420. RECEIVER.
        1421. RIGHT TO SEEK JUDICIAL INTERVENTION; MORTGAGEE'S LIABILITY
                FOR FAILURE TO COMPLY WITH THIS ARTICLE.
  S 1401. WHEN MORTGAGE MAY BE FORECLOSED. 1. A MORTGAGE UPON REAL PROP-
ERTY  SITUATED  WITHIN  THE STATE, EXCEPTING A MORTGAGE ON REAL PROPERTY
IMPROVED SOLELY BY (A) A RESIDENTIAL BUILDING CONTAINING LESS  THAN  SIX
DWELLING UNITS, INCLUDING STRUCTURES AND IMPROVEMENTS APPURTENANT THERE-
TO,  OR  (B)  A  RESIDENTIAL  CONDOMINIUM UNIT IN A RESIDENTIAL BUILDING
OWNED IN A CONDOMINIUM FORM OF OWNERSHIP, OR (C) A RESIDENTIAL BUILDING,
INCLUDING STRUCTURES AND IMPROVEMENTS APPURTENANT THERETO,  OWNED  BY  A
QUALIFIED  COOPERATIVE  APARTMENT CORPORATION, OR (D) A BUILDING LOCATED
IN A CITY WITH A POPULATION OF ONE MILLION OR MORE WHERE THE  NUMBER  OF
UNITS  OCCUPIED  BY  RESIDENTIAL  TENANTS  IS  EQUAL  TO OR GREATER THAN
SIXTY-FIVE PER CENTUM OF THE TOTAL NUMBER  OF  UNITS  IN  THE  BUILDING,
CONTAINING  A  PROVISION  THAT,  UPON  A DEFAULT OF THE MORTGAGE, OR THE
NOTE, BOND OR OTHER OBLIGATION SECURED THEREBY, THE MORTGAGEE SHALL HAVE
THE RIGHT TO SELL THE MORTGAGED  PROPERTY,  MAY  BE  FORECLOSED  IN  THE
MANNER  PRESCRIBED  IN  THIS  ARTICLE  FOR A NON-JUDICIAL PROCEEDING FOR
FORECLOSURE BY POWER OF SALE, WHERE THE FOLLOWING REQUISITES OCCUR:
  (1) DEFAULT HAS  OCCURRED  UNDER  THE  MORTGAGE  AND  THE  OUTSTANDING
INDEBTEDNESS  HAS  BEEN  DECLARED IMMEDIATELY DUE AND PAYABLE BY WRITTEN
NOTICE TO THE MORTGAGOR GIVEN IN THE MANNER REQUIRED BY THE MORTGAGE;
  (2) AN ACTION HAS NOT BEEN BROUGHT TO RECOVER THE DEBT SECURED BY  THE
MORTGAGE,  OR ANY PART THEREOF, OR TO FORECLOSE THE MORTGAGE UNDER ARTI-
CLE THIRTEEN OF THIS CHAPTER; OR, IF AN ACTION  ON  THE  DEBT  HAS  BEEN
BROUGHT, IT HAS BEEN DISCONTINUED OR DISMISSED WITHOUT PREJUDICE AGAINST
THE  PLAINTIFF, OR AN EXECUTION, ISSUED UPON A JUDGMENT RENDERED THEREIN
IN FAVOR OF THE PLAINTIFF, HAS BEEN RETURNED WHOLLY OR  PARTLY  UNSATIS-
FIED;
  (3)  THE  MORTGAGE  HAS  BEEN DULY RECORDED IN ACCORDANCE WITH ARTICLE
NINE OF THE REAL PROPERTY LAW IN THE LAND RECORDS IN  THE  COUNTY  WHERE
THE PROPERTY IS SITUATED; AND
  (4)  THE  FIRST  NOTICE  OF SALE HAS BEEN PUBLISHED WITHIN THE TIME IN
WHICH AN ACTION COULD BE COMMENCED TO FORECLOSE SUCH MORTGAGE.
  2. NON-JUDICIAL FORECLOSURE BY POWER OF SALE PURSUANT TO THIS  ARTICLE
SHALL  NOT  BE  AVAILABLE  TO A MORTGAGEE HOLDING A MORTGAGE ON PROPERTY
CONTAINING RESIDENTIAL APARTMENT UNITS WHERE THE MORTGAGEE SEEKS, IN AND
BY THE NON-JUDICIAL FORECLOSURE OF THE MORTGAGED PROPERTY OR AS A RESULT
THEREOF, TO FORECLOSE, TERMINATE, MODIFY, OR IMPAIR THE TENANT'S  INTER-
ESTS  IN  ANY  LEASES FOR RESIDENTIAL UNITS IN THE MORTGAGED PROPERTY OR
THE TENANT'S POSSESSORY RIGHTS PURSUANT THERETO.
  S 1402. NOTICE OF INTENTION TO FORECLOSE.  1. NOT LATER THAN TEN  DAYS
AFTER  COMMENCING  THE  NON-JUDICIAL  PROCEEDING BY FILING THE NOTICE OF
PENDENCY PURSUANT TO SECTION FOURTEEN HUNDRED THREE OF THIS ARTICLE, AND
NOT LESS THAN TEN DAYS PRIOR TO THE FIRST SERVICE OF THE NOTICE OF  SALE
PURSUANT  TO SECTION FOURTEEN HUNDRED SIX OF THIS ARTICLE, A COPY OF THE
NOTICE OF PENDENCY, TOGETHER WITH A NOTICE OF INTENTION TO FORECLOSE, IN
A WRITING COMPLYING WITH SUBDIVISION TWO OF THIS SECTION, SHALL BE  SENT
TO  THE MORTGAGOR, THE OBLIGOR ON THE NOTE, BOND, OR OTHER OBLIGATION IF
OTHER THAN THE MORTGAGOR, THE OWNER OF THE MORTGAGED PROPERTY, IF  OTHER
THAN  THE MORTGAGOR, AND TO ANY PERSON OR ENTITY HAVING A LIEN OF RECORD
UPON THE MORTGAGED PROPERTY,  OR  INTEREST  IN  THE  MORTGAGED  PROPERTY
SUBORDINATE  TO  THE  MORTGAGE THAT THE MORTGAGEE SEEKS TO FORECLOSE, AT
THE TIME OF THE FILING OF THE NOTICE OF PENDENCY OF WHICH THE  MORTGAGEE

S. 3838                             3

HAS  ACTUAL  KNOWLEDGE  OR IS ON CONSTRUCTIVE NOTICE, BOTH BY (A) REGIS-
TERED MAIL OR CERTIFIED MAIL AND (B) ORDINARY FIRST CLASS  MAIL,  OR  BY
PERSONAL SERVICE IN THE SAME MANNER AS SERVICE OF A SUMMONS. SUCH NOTICE
SHALL  BE  SENT TO THE OWNER OF THE MORTGAGED PROPERTY AT THE ADDRESS OF
THE PROPERTY OR AT SUCH OTHER ADDRESS THAT IS KNOWN TO THE MORTGAGEE, TO
A MORTGAGOR AT THE MORTGAGOR'S ADDRESS SPECIFIED IN THE MORTGAGE  OR  TO
SUCH  OTHER  PLACE AS MAY HAVE BEEN DIRECTED BY THE MORTGAGOR IN WRITING
IN ACCORDANCE WITH THE MORTGAGE, AND TO ANY PERSON OR  ENTITY  HAVING  A
LIEN  OF  RECORD SUBORDINATE TO THE MORTGAGE THAT THE MORTGAGEE SEEKS TO
FORECLOSE AT THE ADDRESS SHOWN ON SUCH LIEN. THE NOTICE SHALL BE SENT TO
A PERSON OR ENTITY HAVING ANY  SUBORDINATE  INTEREST  IN  THE  MORTGAGED
PROPERTY  THAT THE MORTGAGEE SEEKS TO FORECLOSE AND OF WHICH THE MORTGA-
GEE HAS SUCH ACTUAL KNOWLEDGE OR CONSTRUCTIVE NOTICE AT SUCH PERSON'S OR
ENTITY'S LAST KNOWN PERSONAL OR BUSINESS ADDRESS.
  2. THE NOTICE SHALL:
  (A) IDENTIFY THE MORTGAGE BY THE PARTIES THERETO, THE DATE AND RECORD-
ING DATE THEREOF, AND ANY RECORDED AMENDMENTS AND MODIFICATIONS THEREOF;
  (B) (1) IF THERE IS A MONETARY DEFAULT, SET FORTH THE AMOUNTS DUE, THE
DATE DUE AND ANY LATE CHARGES AND DEFAULT INTEREST; (2) IF  THERE  IS  A
NON-MONETARY DEFAULT, SET FORTH THE BASIS THEREOF;
  (C)  STATE THAT THE MORTGAGEE HAS (1) MADE DEMAND TO CURE A DEFAULT IF
SUCH DEMAND IS REQUIRED UNDER THE MORTGAGE OR THE NOTE,  BOND  OR  OTHER
OBLIGATION  SECURED THEREBY, WHICH DEFAULT HAS NOT BEEN CURED WITHIN THE
APPLICABLE CURE PERIOD, AND (2) DECLARED THE ENTIRE  OBLIGATION  SECURED
BY  THE  MORTGAGE TO BE IMMEDIATELY DUE AND PAYABLE BY WRITTEN NOTICE TO
THE MORTGAGOR;
  (D) SET FORTH THE OUTSTANDING PRINCIPAL BALANCE DECLARED DUE AND PAYA-
BLE, TOGETHER WITH THE  AMOUNT  OF  INTEREST  ACCRUED  THEREON  AND  THE
APPROXIMATE AMOUNT OF OTHER SUMS SECURED BY THE MORTGAGE;
  (E) STATE THAT THE INTEREST IN THE MORTGAGED PROPERTY OF THE MORTGAGOR
AND ALL PERSONS OR ENTITIES HAVING AN INTEREST IN THE MORTGAGED PROPERTY
SUBORDINATE TO THE MORTGAGE, WHO ARE SERVED WITH A COPY OF THE NOTICE OF
INTENTION  TO  FORECLOSE AND ANY OTHER NOTICES REQUIRED UNDER THIS ARTI-
CLE, WILL BE TERMINATED BY FORECLOSURE OF THE MORTGAGE BY POWER OF  SALE
PURSUANT  TO  THIS  ARTICLE AND THAT THE MORTGAGOR, OWNER, OR SUCH OTHER
PERSON OR ENTITY HAVING AN INTEREST IN THE MORTGAGED  PROPERTY  SUBORDI-
NATE TO THE MORTGAGE, MAY THEREUPON BE EVICTED BY JUDICIAL PROCESS;
  (F)  SET  FORTH  THE  RIGHT  OF THE MORTGAGOR, OR ANY PERSON OR ENTITY
HAVING AN INTEREST IN THE MORTGAGED PROPERTY SUBORDINATE  TO  THE  MORT-
GAGE,  TO  ANY  SURPLUS MONEYS OUT OF THE PROCEEDS OF SALE IN ACCORDANCE
WITH THE PROVISIONS OF SECTION FOURTEEN HUNDRED EIGHTEEN OF  THIS  ARTI-
CLE;  AND,  IF  A  DEFICIENCY  JUDGMENT IS PERMITTED, THAT THE MORTGAGEE
SHALL HAVE THE RIGHT TO SEEK A DEFICIENCY JUDGMENT PURSUANT  TO  SECTION
FOURTEEN HUNDRED NINETEEN OF THIS ARTICLE;
  (G)  SET  FORTH THE RIGHTS AND REMEDIES, AS SPECIFIED IN SECTION FOUR-
TEEN HUNDRED TWENTY-ONE OF THIS ARTICLE,  WHICH  ARE  AVAILABLE  TO  THE
MORTGAGOR,  OR  ANY  PERSON  OR  ENTITY  CLAIMING UNDER THE MORTGAGOR OR
HAVING AN INTEREST IN OR LIEN  UPON  THE  MORTGAGED  PROPERTY  WHICH  IS
SUBORDINATE TO THE MORTGAGE BEING FORECLOSED; AND
  (H)  WHERE THE UNITED STATES OF AMERICA, THE STATE OF NEW YORK, OR ANY
MUNICIPALITY, AGENCY OR INSTRUMENTALITY OF ANY OF THEM, IS  ENTITLED  TO
NOTICE,  THE  NOTICE  SHALL SPECIFY WITH PARTICULARITY THE NATURE OF THE
INTEREST OR LIEN OF THE GOVERNMENTAL ENTITY. THE NON-JUDICIAL PROCEEDING
UNDER THIS ARTICLE SHALL BE DEEMED TO BE  AN  ACTION,  FOR  PURPOSES  OF
STATUTES CONFERRING JURISDICTION OVER GOVERNMENTAL ENTITIES.

S. 3838                             4

  3.  AFFIDAVITS OF SERVICE OR MAILING UPON EACH OF THE PERSONS OR ENTI-
TIES ENTITLED TO AND SERVED WITH THE NOTICE OF  INTENTION  TO  FORECLOSE
SHALL  BE  FILED PRIOR TO THE DATE OF SALE UNDER THE INDEX NUMBER OF THE
NON-JUDICIAL PROCEEDING WITH THE CLERK OF THE COUNTY IN WHICH  THE  SALE
IS TO TAKE PLACE.
  S  1403. NOTICE OF PENDENCY OF NON-JUDICIAL PROCEEDING FOR FORECLOSURE
BY POWER OF SALE.  1. THE MORTGAGEE SHALL, PRIOR TO THE FIRST SERVICE OF
THE NOTICE OF INTENTION TO FORECLOSE, PURCHASE AN INDEX  NUMBER  IN  THE
OFFICE  OF  THE  COUNTY CLERK OF THE COUNTY IN WHICH THE SALE IS TO TAKE
PLACE AND FILE IN THE CLERK'S OFFICE OF EACH COUNTY WHERE THE  MORTGAGED
PROPERTY  IS  SITUATED  A  NOTICE  OF  THE  PENDENCY OF THE NON-JUDICIAL
PROCEEDING FOR FORECLOSURE BY POWER OF SALE WHICH SHALL, IN ADDITION  TO
THE  APPLICABLE REQUIREMENTS OF ARTICLE SIXTY-FIVE OF THE CIVIL PRACTICE
LAW AND RULES, SPECIFY THE DATE OF THE MORTGAGE,  THE  PARTIES  THERETO,
THE  TIME  AND  PLACE  OF RECORDING, THE NAME OF THE RECORD OWNER OF THE
MORTGAGED PROPERTY, THE NAMES OF ANY SUBORDINATE LIENORS OR  HOLDERS  OF
SUBORDINATE  INTERESTS ENTITLED TO NOTICE OF THE SALE, THE OBJECT OF THE
PROCEEDING FOR FORECLOSURE OF THE MORTGAGE  BY  POWER  OF  SALE,  AND  A
DESCRIPTION  OF  THE  MORTGAGED  PROPERTY,  INCLUDING THE NUMBER OF EACH
BLOCK AND LOT ON THE LAND MAP OF THE COUNTY WHICH  IS  AFFECTED  BY  THE
NOTICE. IF THE NOTICE IS FILED IN MORE THAN ONE COUNTY, THE NOTICE SHALL
DESIGNATE  THE COUNTY IN WHICH THE SALE IS TO TAKE PLACE. THE PROVISIONS
OF ARTICLE SIXTY-FIVE OF THE CIVIL PRACTICE LAW AND RULES REQUIRING  THE
SERVICE  AND  FILING OF A SUMMONS SHALL NOT BE APPLICABLE TO A NON-JUDI-
CIAL PROCEEDING FOR FORECLOSURE BY POWER OF SALE PURSUANT TO THIS  ARTI-
CLE.
  2.  THE  FILING  OF  THE  NOTICE OF PENDENCY SHALL BE DEEMED TO BE THE
COMMENCEMENT OF THE NON-JUDICIAL PROCEEDING FOR FORECLOSURE BY POWER  OF
SALE PURSUANT TO THIS ARTICLE.
  3.  THE  NOTICE  OF  PENDENCY SHALL BE EFFECTIVE FOR A PERIOD OF THREE
YEARS FROM THE DATE OF FILING. BEFORE EXPIRATION OF A PERIOD OR EXTENDED
PERIOD, THE COURT, UPON MOTION OF THE MORTGAGEE AND UPON SUCH NOTICE  AS
THE COURT MAY REQUIRE, MAY, FOR GOOD CAUSE SHOWN, GRANT AN EXTENSION FOR
AN  ADDITIONAL  THREE YEAR PERIOD. AN EXTENSION ORDER SHALL BE FILED AND
INDEXED BEFORE EXPIRATION OF THE NOTICE OF PENDENCY.  IN THE  EVENT  THE
SALE  HAS  NOT TAKEN PLACE PRIOR TO THE EXPIRATION OF A PENDENCY PERIOD,
AND A LAPSE IN EXTENDING THE NOTICE OF  PENDENCY  HAS  OCCURRED,  A  NEW
NOTICE  OF  PENDENCY  MAY  BE  FILED UPON A COURT ORDER FROM THE SUPREME
COURT IN THE COUNTY IN WHICH THE SALE IS TO TAKE  PLACE,  ON  A  SHOWING
THAT  NO  PERSON  OR ENTITY HAS BEEN PREJUDICED BY THE FAILURE TO EXTEND
THE NOTICE OF PENDENCY. IN THE EVENT THAT A PERSON OR ENTITY SHALL  HAVE
ACQUIRED, AFTER THE EXPIRATION OF A NOTICE OF PENDENCY AND BEFORE ANOTH-
ER  SHALL  BE  FILED, AN INTEREST IN OR LIEN UPON THE MORTGAGED PROPERTY
WHICH IS SUBORDINATE TO THE MORTGAGE, SUCH PERSON  OR  ENTITY  SHALL  BE
ENTITLED TO NOTICE OF THE SALE.
  4.  THE FILING OF THE NOTICE OF PENDENCY SHALL BE DEEMED TO BE CONCLU-
SIVE RECORD NOTICE TO ANY TENANT OR OCCUPANT WHO TAKES POSSESSION OF ALL
OR A PART OF THE MORTGAGED PROPERTY, OR ANY PERSON WHO OR  ENTITY  WHICH
ACQUIRES AN INTEREST IN OR LIEN UPON THE MORTGAGED PROPERTY, OR ANY PART
THEREOF, AFTER THE FILING OF THE NOTICE OF PENDENCY AND ALL SUCH PERSONS
OR  ENTITIES  SHALL  BE BOUND THEREBY AND BY THE NON-JUDICIAL PROCEEDING
PURSUANT TO THIS ARTICLE.
  S 1404. CONTENTS OF NOTICE OF SALE. THE NOTICE OF SALE SHALL SPECIFY:
  1. THE NAMES OF THE MORTGAGOR AND RECORD  OWNER,  IF  OTHER  THAN  THE
MORTGAGOR, THE MORTGAGEE, AND OF EACH ASSIGNEE OF THE MORTGAGEE;

S. 3838                             5

  2.  THE DATE OF THE MORTGAGE, THE DATE WHEN AND THE PLACE WHERE IT WAS
RECORDED, AND THE BOOK AND PAGE OR INDEX IN WHICH IT IS RECORDED AND THE
DATES AND RECORDING INFORMATION PERTAINING TO  EACH  ASSIGNMENT  OF  THE
MORTGAGE;
  3.  THE  IDENTITY  OF HOLDERS, IF ANY, OF SUBORDINATE INTERESTS IN THE
MORTGAGED PROPERTY WHICH THE MORTGAGEE  SEEKS  TO  FORECLOSE  WHICH  ARE
RECORDED  OR OF WHICH THE MORTGAGEE HAS ACTUAL OR CONSTRUCTIVE NOTICE AT
THE TIME OF THE FILING OF THE NOTICE OF PENDENCY, AND THE NATURE OF SUCH
SUBORDINATE INTERESTS;
  4. THE OUTSTANDING PRINCIPAL SUM CLAIMED BY THE MORTGAGEE  TO  BE  DUE
UPON THE MORTGAGE, TOGETHER WITH ACCRUED INTEREST THEREON, LATE CHARGES,
OTHER  SUMS  DUE  UNDER THE MORTGAGE, AND SUMS ADVANCED BY THE MORTGAGEE
RECOVERABLE UNDER THE MORTGAGE INCLUDING THE COSTS OF SALE  AND  REASON-
ABLE  ATTORNEYS' FEES AND DISBURSEMENTS, AT THE TIME OF THE FIRST PUBLI-
CATION OF THE NOTICE;
  5. A LEGAL DESCRIPTION OF THE MORTGAGED PROPERTY, THE STREET  ADDRESS,
AND THE BLOCK AND LOT OR OTHER TAX OR TAX MAP IDENTIFICATION;
  6. IF THE MORTGAGED PROPERTY CONSISTS OF TWO OR MORE DISTINCT PARCELS,
UNLESS  THE  MORTGAGE  PROVIDES  THAT  THE  PARCELS SHALL BE SOLD AS ONE
PARCEL, THE NOTICE OF SALE SHALL SPECIFY THE ORDER IN WHICH THE  PARCELS
SHALL BE SOLD;
  7.  THAT  THE OWNER HAS THE RIGHT, UP TO AND INCLUDING THE TIME OF THE
SALE, TO REDEEM THE MORTGAGED PROPERTY UPON PAYMENT TO THE MORTGAGEE  OF
THE OUTSTANDING PRINCIPAL BALANCE SECURED BY THE MORTGAGE, TOGETHER WITH
INTEREST  ACCRUED  THEREON, AND ALL OTHER SUMS DUE THEREUNDER, INCLUDING
THE COSTS OF SALE AND REASONABLE ATTORNEYS' FEES AND DISBURSEMENTS; AND
  8. THE DATE, PLACE AND TIME OF SALE.
  S 1405. NOTICE OF SALE; HOW GIVEN. NOTICE THAT THE  MORTGAGE  WILL  BE
FORECLOSED  BY A SALE OF THE MORTGAGED PROPERTY, OR A PART THEREOF, AT A
TIME AND PLACE SPECIFIED IN THE NOTICE, SHALL BE GIVEN IN THE  FOLLOWING
MANNER:
  1.  A  COPY  OF  THE  NOTICE SHALL BE SERVED, AS PRESCRIBED IN SECTION
FOURTEEN HUNDRED SIX OF THIS ARTICLE, UPON:
  (A) THE MORTGAGOR;
  (B) THE OBLIGOR ON THE NOTE, BOND OR OTHER OBLIGATION, IF  OTHER  THAN
THE MORTGAGOR;
  (C) THE OWNER OF THE MORTGAGED PROPERTY, IF OTHER THAN THE MORTGAGOR;
  (D)  ANY  OTHER PERSON OR ENTITY IN THE MORTGAGE DESIGNATED TO RECEIVE
NOTICE;
  (E) A SUBSEQUENT LIENOR OF THE MORTGAGED PROPERTY THAT  THE  MORTGAGEE
SEEKS TO FORECLOSE WHOSE INTEREST WAS RECORDED OR DOCKETED IN THE PROPER
OFFICE  FOR  RECORDING  OR  FILING  IN THE COUNTY IN WHICH THE MORTGAGED
PROPERTY IS LOCATED AT THE TIME OF THE FILING OF THE NOTICE OF PENDENCY;
AND
  (F) ANY PERSON HAVING A LIEN UPON OR INTEREST IN THE MORTGAGED PROPER-
TY, OR ANY PART THEREOF, AT THE TIME OF THE  FILING  OF  THE  NOTICE  OF
PENDENCY  THAT  IS  SUBORDINATE  TO  THE MORTGAGE AND THAT THE MORTGAGEE
SEEKS TO FORECLOSE. AFFIDAVITS OF SERVICE OR MAILING UPON  EACH  OF  THE
PERSONS  OR ENTITIES ENTITLED TO NOTICE OF THE SALE SHALL BE FILED PRIOR
TO THE DATE OF SALE UNDER THE INDEX NUMBER OF THE NON-JUDICIAL  PROCEED-
ING WITH THE CLERK OF THE COUNTY IN WHICH THE SALE IS TO TAKE PLACE.
  2.  A  COPY  OF  THE NOTICE OF SALE MUST BE PUBLISHED AT LEAST ONCE IN
EACH WEEK DURING THE FIVE SUCCESSIVE  WEEKS  IMMEDIATELY  PRECEDING  THE
DATE  OF SALE, OR AT LEAST TWICE IN EACH WEEK DURING THE FOUR SUCCESSIVE
WEEKS IMMEDIATELY PRECEDING THE DATE OF SALE, IN A NEWSPAPER OF  GENERAL
CIRCULATION  DISTRIBUTED IN THE COUNTY IN WHICH THE PROPERTY TO BE SOLD,

S. 3838                             6

OR ANY PART THEREOF, IS SITUATED, OR IF NO NEWSPAPER IS  DISTRIBUTED  IN
SUCH  COUNTY,  THEN  IN  A NEWSPAPER DISTRIBUTED IN AN ADJOINING COUNTY,
EXCEPT THAT WHERE SUCH PROPERTY IS LOCATED IN A COUNTY WHOLLY  CONTAINED
WITHIN  A  CITY WITH A POPULATION OF ONE MILLION OR MORE, SUCH NOTICE OF
SALE SHALL BE PUBLISHED IN THE SAME  MANNER  AS  A  NOTICE  OF  JUDICIAL
PROCEEDING  IN  A  NEWSPAPER DISTRIBUTED WITHIN SUCH COUNTY TO BE DESIG-
NATED BY THE CLERK OF SUCH COUNTY. ANY PERIOD OF SEVEN  SUCCESSIVE  DAYS
SHALL CONSTITUTE A WEEK UNDER THIS SECTION.
  3.  A COPY OF THE NOTICE OF SALE MUST BE FILED ON OR BEFORE THE DAY OF
FIRST PUBLICATION OF THE NOTICE OF SALE WITH THE CLERK  OF  EACH  COUNTY
WHEREIN THE MORTGAGED PROPERTY, OR ANY PART THEREOF, IS SITUATED.
  4.  THE  PUBLICATION  PROVISIONS  OF THIS SECTION SHALL BE FOLLOWED IN
LIEU OF THE PROVISIONS OF SECTION TWO HUNDRED THIRTY-ONE OF THIS CHAPTER
RESPECTING THE PUBLICATION OF A NOTICE OF SALE.
  S 1406. NOTICE OF SALE; HOW SERVED. SERVICE OF NOTICE OF THE  SALE  AS
PRESCRIBED  IN  SUBDIVISION ONE OF SECTION FOURTEEN HUNDRED FIVE OF THIS
ARTICLE SHALL BE MADE UPON A PERSON OR ENTITY DESCRIBED  IN  SUBDIVISION
ONE  OF SECTION FOURTEEN HUNDRED FIVE OF THIS ARTICLE THAT THE MORTGAGEE
SEEKS TO FORECLOSE AS FOLLOWS:
  1. AT LEAST THIRTY DAYS BEFORE THE DATE OF SALE, BY DELIVERING A  COPY
OF  THE  NOTICE,  IN THE MANNER PRESCRIBED BY ARTICLE THREE OF THE CIVIL
PRACTICE LAW AND RULES FOR PERSONAL SERVICE OF A COPY OF A SUMMONS IN  A
CIVIL ACTION IN A COURT OF RECORD, TO THE PERSON OR ENTITY TO BE SERVED,
AND  BY  MAILING  AN ADDITIONAL COPY THEREOF TO SUCH PERSON OR ENTITY BY
FIRST CLASS MAIL IN AN ENVELOPE BEARING THE LEGEND "PERSONAL AND  CONFI-
DENTIAL" AND NOT INDICATING ON THE OUTSIDE THEREOF, BY RETURN ADDRESS OR
OTHERWISE,  THAT  THE  COMMUNICATION  IS FROM AN ATTORNEY OR CONCERNS AN
ACTION OR PROCEEDING AGAINST THE PERSON OR ENTITY TO BE SERVED. IF  SUCH
PERSON  OR  ENTITY  IS A FOREIGN CORPORATION, OR IS NOT A RESIDENT OF OR
WITHIN THE STATE, THEN SERVICE THEREOF MAY  BE  MADE  UPON  IT  IN  LIKE
MANNER WITHOUT THE STATE, AT LEAST FORTY DAYS BEFORE THE DATE OF SALE.
  2.  SERVICE  OF  A  COPY OF THE NOTICE OF SALE UPON THE MORTGAGOR, THE
MORTGAGOR'S SUCCESSORS OR ASSIGNS, OR A SUBSEQUENT GRANTEE OF THE  PROP-
ERTY  FROM THE MORTGAGOR, IN THE MANNER PRESCRIBED IN THE MORTGAGE SHALL
BE GOOD, VALID AND EFFECTIVE SERVICE HEREUNDER.
  3. SERVICE OF A COPY OF THE NOTICE OF SALE UPON THE UNITED  STATES  OF
AMERICA,  ITS AGENCIES OR INSTRUMENTALITIES, SHALL BE IN ACCORDANCE WITH
APPLICABLE FEDERAL STATUTE.
  S 1407. SALE; HOW POSTPONED.   1. THE SALE MAY  BE  POSTPONED  BY  THE
MORTGAGEE FOR A PERIOD OF TIME NOT TO EXCEED FIVE WEEKS. NOTICE OF POST-
PONEMENT OF THE SALE SHALL BE PUBLISHED AT LEAST ONCE NOT LESS THAN FIVE
DAYS  PRIOR  TO  THE  NEW DATE OF THE SALE IN THE NEWSPAPER IN WHICH THE
ORIGINAL NOTICE WAS PUBLISHED, AND SHALL BE SERVED  IN  THE  MANNER  SET
FORTH  IN  SECTION FOURTEEN HUNDRED SIX OF THIS ARTICLE UPON EACH PERSON
UPON WHOM OR ENTITY UPON WHICH THE ORIGINAL NOTICE OF SALE WAS SERVED.
  2. THE SALE MAY ALSO BE POSTPONED IF THE PERSON DESIGNATED TO  CONDUCT
THE  SALE  DOES  NOT APPEAR ON THE DATE SCHEDULED FOR THE SALE, IN WHICH
CASE NOTICE OF THE ADJOURNED DATE  SHALL  BE  PUBLISHED  AND  SERVED  AS
PROVIDED IN SUBDIVISION ONE OF THIS SECTION.
  3. IF THE SALE IS STAYED BY APPLICATION OF ANY OTHER LAW, THEN AT SUCH
TIME  AS  THE  STAY SHALL BE VACATED OR LIFTED, AN ADJOURNED SALE MAY BE
SCHEDULED BY THE MORTGAGEE AND PUBLICATION OF THE NOTICE OF  SALE  SHALL
BE  MADE  AS  PRESCRIBED  IN SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED
FIVE OF THIS ARTICLE.
  4. THE SALE MAY BE POSTPONED BY THE MORTGAGEE MORE  THAN  ONCE.    THE
MANNER  OF  THE  POSTPONEMENT  AND THE PUBLICATION AND SERVICE OF NOTICE

S. 3838                             7

THEREOF SHALL BE EFFECTED IN ACCORDANCE WITH THE PROVISIONS OF  SUBDIVI-
SION ONE OF THIS SECTION.
  S  1408.  SALE; HOW CONDUCTED.  1. THE SALE SHALL BE AT PUBLIC AUCTION
BY A LICENSED AUCTIONEER, SHERIFF, MARSHAL, OR COURT APPOINTED  OFFICIAL
FOR  SUCH PURPOSE, DURING REASONABLE BUSINESS HOURS, ON A DAY OTHER THAN
SATURDAY, SUNDAY OR A PUBLIC HOLIDAY, IN THE COUNTY IN WHICH  THE  MORT-
GAGED  PROPERTY,  OR  A  PART  THEREOF,  IS  SITUATED, AT ANY COURTHOUSE
LOCATED IN THE COUNTY, OR IF IN A COUNTY WITHIN THE CITY OF NEW YORK, AT
THE COURTHOUSE OF THE SUPREME COURT IN SUCH COUNTY.
  2. IF PUBLICATION OF THE NOTICE OF SALE IS FOR FOUR WEEKS,  SUCH  SALE
SHALL  TAKE PLACE ON ANY DAY ON OR AFTER THE TWENTY-EIGHTH DAY AND ON OR
BEFORE THE THIRTY-FIFTH DAY AFTER THE DAY OF THE FIRST PUBLICATION;  AND
IF  PUBLICATION OF THE NOTICE OF SALE IS FOR FIVE WEEKS, SUCH SALE SHALL
TAKE PLACE ON ANY DAY ON OR AFTER THE THIRTY-FIFTH DAY AND ON OR  BEFORE
THE  FORTY-SECOND DAY AFTER THE DAY OF THE FIRST PUBLICATION. ANY PERIOD
OF SEVEN SUCCESSIVE DAYS SHALL CONSTITUTE A WEEK UNDER THIS SECTION.
  3. THE PERSON CONDUCTING THE SALE SHALL ANNOUNCE THE TERMS THEREOF  AT
THE  OUTSET  OF  THE  AUCTION. A COPY OF THE TERMS OF SALE SHALL BE MADE
AVAILABLE BY THE MORTGAGEE OR PERSON CONDUCTING THE  SALE  AT  OR  PRIOR
THERETO.
  4.  ON  ACCEPTANCE  OF  A  BID AT THE SALE, THE BIDDER, OTHER THAN THE
MORTGAGEE, SHALL DEPOSIT WITH THE PERSON CONDUCTING THE  SALE  AT  LEAST
TEN  PERCENT  OF  THE BID PRICE IN CASH, CERTIFIED CHECK OR A BANK CHECK
DRAWN ON A BANK, TRUST COMPANY, SAVINGS BANK OR SAVINGS AND LOAN ASSOCI-
ATION HAVING OFFICES IN THIS STATE. A  MEMORANDUM  OF  THE  SALE,  WHICH
SHALL INCORPORATE THE TERMS OF THE SALE, SHALL BE EXECUTED BY THE PERSON
CONDUCTING  THE  SALE  AND  THE SUCCESSFUL BIDDER THEREAT, INCLUDING THE
FORECLOSING MORTGAGEE. THE MEMORANDUM SHALL STATE THE  IDENTITY  OF  THE
PURCHASER,  THE  AMOUNT OF THE SUCCESSFUL BID, THE AMOUNT OF THE DEPOSIT
WHICH, PENDING THE CONVEYANCE OF TITLE, SHALL BE RETAINED BY THE  PERSON
CONDUCTING  THE  SALE  IN  A  SEPARATE  ACCOUNT  IN A COMMERCIAL BANK OR
SAVINGS BANK LOCATED IN THE STATE OF NEW YORK, THE DATE, TIME AND  PLACE
OF  CLOSING  OF  TITLE  AND  THAT THE TERMS OF THE SALE ARE INCORPORATED
THEREIN. THE MEMORANDUM OF SALE SHALL NOT BE AMENDED OR MODIFIED.
  5. IF THE SUCCESSFUL BIDDER FAILS TO MAKE THE DEPOSIT  ON  ACCEPTANCE,
OR  TO COMPLETE THE TRANSACTION WITHIN THIRTY DAYS AFTER ACCEPTANCE, THE
MORTGAGEE MAY RESELL THE MORTGAGED PROPERTY. THE BIDDER'S DEPOSIT MAY BE
RETAINED OR RECOVERED BY THE MORTGAGEE AS LIQUIDATED DAMAGES  REGARDLESS
OF THE AMOUNT BID AND PAID ON THE RESALE OF THE MORTGAGED PROPERTY.
  6. IF THE MORTGAGED PROPERTY CONSISTS OF TWO OR MORE DISTINCT PARCELS,
THEY  SHALL  BE  SOLD SEPARATELY IN THE ORDER SPECIFIED IN THE NOTICE OF
SALE UNLESS OTHERWISE PROVIDED IN THE MORTGAGE OR ANY INSTRUMENT EXTEND-
ING, AMENDING OR MODIFYING THE MORTGAGE. AS MANY OF THE PARCELS SHALL BE
SOLD AS IT IS NECESSARY TO SELL IN ORDER TO SATISFY THE  AMOUNT  DUE  AT
THE  TIME  OF  THE  SALE,  AND THE COSTS AND EXPENSES ALLOWED BY SECTION
FOURTEEN HUNDRED SEVENTEEN OF THIS ARTICLE.  WHERE TWO OR MORE BUILDINGS
ARE SITUATED IN THE SAME CITY LOT OR LOCAL TAX LOT, THEY SHALL  BE  SOLD
TOGETHER.
  S  1409.  MORTGAGEE OR SUCCESSOR IN INTEREST MAY PURCHASE. THE MORTGA-
GEE, OR ITS  ASSIGNEE,  OR  THE  LEGAL  REPRESENTATIVE  OF  EITHER,  MAY
PURCHASE  THE  MORTGAGED  PROPERTY, OR ANY PART THEREOF, AT THE SALE AND
SHALL BE ENTITLED TO BID. UPON ANY SUCH BID UP TO THE FULL AMOUNT OF THE
INDEBTEDNESS SECURED BY THE MORTGAGE, INCLUDING  UNPAID  INTEREST,  LATE
CHARGES,  COSTS  OF  SALE, REASONABLE ATTORNEYS' FEES AND DISBURSEMENTS,
AND ADVANCES MADE TO PROTECT THE LIEN OF THE MORTGAGE, THE MORTGAGEE, OR
ITS ASSIGNEE, OR THE  LEGAL  REPRESENTATIVE  OF  EITHER,  SHALL  NOT  BE

S. 3838                             8

REQUIRED TO MAKE ANY DEPOSIT AT THE SALE OR ANY PAYMENT OF THE AMOUNT OF
THE  SUCCESSFUL BID UP TO THE FULL AMOUNT OF THE INDEBTEDNESS SECURED BY
THE MORTGAGE, UPON THE DELIVERY OF THE POWER OF SALE DEED.
  S 1410. RIGHT TO REDEEM OF MORTGAGOR, SUBORDINATE LIENOR, OR HOLDER OF
SUBORDINATE  INTERESTS.    1. AT ANY TIME BEFORE THE COMMENCEMENT OF THE
BIDDING AT THE SALE, THE MORTGAGOR, OR THE RECORD OWNER OF THE MORTGAGED
PROPERTY, OR THE HOLDER OF ANY SUBORDINATE SECURITY INTEREST IN OR OTHER
LIEN UPON THE MORTGAGED PROPERTY, MAY PREVENT THE SALE BY PAYMENT TO THE
MORTGAGEE, IN GOOD FUNDS, OF ALL SUMS DUE UNDER  THE  MORTGAGE,  OR  THE
NOTE,  BOND  OR  OTHER OBLIGATION SECURED THEREBY, TOGETHER WITH ACCRUED
INTEREST THEREON, AND ALL OTHER SUMS DUE THEREUNDER, INCLUDING THE COSTS
OF SALE AND REASONABLE ATTORNEYS' FEES. AS BETWEEN OR AMONG  HOLDERS  OF
SECURITY  INTERESTS,  THE TENDER OF REDEMPTION BY THE HOLDER ENTITLED TO
PRIORITY PREVAILS OVER THE TENDER OF  REDEMPTION  BY  THE  HOLDER  OF  A
SUBORDINATE INTEREST.
  2. IF A MORTGAGOR, RECORD OWNER, OR HOLDER OF ANY SUBORDINATE SECURITY
INTEREST  IN  OR  OTHER  LIEN UPON THE MORTGAGED PROPERTY IS ENTITLED TO
REDEEM UNDER THIS SECTION, THE MORTGAGOR, RECORD OWNER, OR THE HOLDER OF
ANY SUBORDINATE SECURITY INTEREST OR LIEN, MAY,  UPON  SUCH  REDEMPTION,
REQUIRE  THE  MORTGAGEE, UPON FULL PAYMENT OF THE OBLIGATION, IN LIEU OF
THE CERTIFICATE OF DISCHARGE UNDER SECTION TWO HUNDRED  SEVENTY-FIVE  OF
THE  REAL  PROPERTY  LAW,  TO  ASSIGN  THE DEBT AND THE MORTGAGE WITHOUT
RECOURSE OR WARRANTY TO ANY PERSON OR ENTITY  DESIGNATED  BY  THE  PAYOR
PROVIDED  THAT SUCH PERSON OR ENTITY IS NOT THE MORTGAGOR OR A PERSON OR
ENTITY ACTING AS A NOMINEE OF THE MORTGAGOR, AND THE MORTGAGEE IS  OBLI-
GATED TO DO SO, PROVIDED THE PAYOR EXECUTES THE AFFIDAVIT REQUIRED UNDER
SECTION  TWO  HUNDRED  SEVENTY-FIVE OF THE REAL PROPERTY LAW. THE RIGHTS
UNDER THIS SUBDIVISION MAY BE ENFORCED BY THE HOLDER OF ANY  SUBORDINATE
SECURITY  INTEREST IN OR LIEN UPON THE MORTGAGED PROPERTY EVEN THOUGH IT
IS A SUBORDINATE SECURITY INTEREST OR LIEN. THE ASSIGNMENT OF THE  MORT-
GAGE,  AND  THE  INDEBTEDNESS  SECURED THEREBY, SHALL BE DEEMED TO BE AN
ASSIGNMENT OF A BONA FIDE OBLIGATION WITHIN THE MEANING OF  SECTION  TWO
HUNDRED SEVENTY-FIVE OF THE REAL PROPERTY LAW.
  S  1411.  EFFECT OF SALE.  1. A SALE, MADE AND CONDUCTED AS PRESCRIBED
IN THIS ARTICLE, TO A PURCHASER, INCLUDING THE MORTGAGEE OR  THE  PERSON
TO  WHOM  OR  ENTITY TO WHICH THE PURCHASER OR THE MORTGAGEE ASSIGNS THE
TERMS OF SALE AND MEMORANDUM OF SALE BY  ASSIGNMENT  DULY  EXECUTED  AND
RECORDED,  IS  EQUIVALENT TO A SALE PURSUANT TO JUDGMENT IN AN ACTION TO
FORECLOSE THE MORTGAGE UNDER  ARTICLE  THIRTEEN  OF  THIS  CHAPTER,  AND
EXCEPT  AS  RESPECTS THE INTEREST OF THE UNITED STATES OF AMERICA, WHICH
SHALL BE FORECLOSED AS PROVIDED IN SUBDIVISION FOUR OF THIS SECTION,  OR
THOSE  RESIDENTIAL  TENANTS WHOSE INTEREST MAY NOT BE FORECLOSED, TERMI-
NATED, MODIFIED, OR IMPAIRED PURSUANT TO THIS ARTICLE, IMMEDIATELY  UPON
THE  EXECUTION  OF  THE  MEMORANDUM OF SALE OF THE PERSON CONDUCTING THE
AUCTION, SHALL BAR ANY CLAIM OR EQUITY  OF  REDEMPTION,  UPON,  OR  WITH
RESPECT TO, THE PROPERTY SOLD, OF EACH OF THE FOLLOWING PERSONS OR ENTI-
TIES:
  (A)  THE  MORTGAGOR,  OR  THE  MORTGAGOR'S HEIRS, DEVISEES, EXECUTORS,
ADMINISTRATORS, SUCCESSORS OR ASSIGNS;
  (B) EACH PERSON CLAIMING UNDER ANY OF THEM,  BY  VIRTUE  OF  A  TITLE,
LIEN,  TENANCY, INTEREST, ENCUMBRANCE, JUDGMENT OR DECREE, SUBSEQUENT TO
THE MORTGAGE, UPON WHOM THE NOTICE OF SALE WAS SERVED, AS PRESCRIBED  IN
THIS ARTICLE;
  (C)  EACH  PERSON SO CLAIMING, WHOSE ASSIGNMENT, MORTGAGE, CONVEYANCE,
TENANCY, OR OTHER INTEREST WAS NOT DULY RECORDED IN THE PROPER  BOOK  OR
INDEX  FOR  RECORDING  THE  SAME  IN THE COUNTY IN WHICH THE PROPERTY IS

S. 3838                             9

SITUATED, OR WHOSE JUDGMENT OR DECREE WAS NOT DULY DOCKETED IN THE COUN-
TY CLERK'S OFFICE, AT THE TIME OF THE FILING OF THE NOTICE  OF  PENDENCY
OF  THE  SALE PURSUANT TO THIS ARTICLE, AND THE EXECUTOR, ADMINISTRATOR,
SUCCESSOR OR ASSIGNEE OF SUCH A PERSON;
  (D)  EVERY  OTHER  PERSON,  CLAIMING  UNDER A STATUTORY LIEN OR ENCUM-
BRANCE, CREATED, RECORDED OR FILED  SUBSEQUENT  TO  THE  FILING  OF  THE
NOTICE  OF  PENDENCY,  ATTACHING TO THE TITLE OR INTEREST OF ANY PERSON,
DESIGNATED IN ANY OF THE FOREGOING SUBDIVISIONS OF THIS SECTION.
  2. NOTHING IN THIS ARTICLE SHALL BAR OR FORECLOSE ANY  CLAIM  UPON  OR
INTEREST  IN  THE  MORTGAGED PROPERTY SOLD OF ANY PERSON OR ENTITY WHOSE
INTEREST IN OR LIEN UPON THE  MORTGAGED  PROPERTY  AROSE  PRIOR  TO  THE
FILING OF THE NOTICE OF PENDENCY AND WHO HAS NOT BEEN SERVED WITH A COPY
OF THE NOTICE OF SALE IN THE MANNER PRESCRIBED IN THIS ARTICLE.
  3.  A  CONVEYANCE  MADE  IN  ACCORDANCE  WITH SECTION FOURTEEN HUNDRED
TWELVE OF THIS ARTICLE TO A PURCHASER AT THE FORECLOSURE SALE, INCLUDING
THE MORTGAGEE, IS NOT A FRAUDULENT TRANSFER BY REASON OF THE VALUE GIVEN
BEING LESS THAN THE VALUE OF THE MORTGAGOR'S INTEREST IN  THE  MORTGAGED
PROPERTY.
  4.  WHERE  THE  UNITED  STATES  OF  AMERICA, OR ANY OF ITS AGENCIES OR
INSTRUMENTALITIES, HAS A SUBORDINATE LIEN OR INTEREST OF RECORD  IN  THE
MORTGAGED PROPERTY AND IS ENTITLED TO NOTICE, THE MORTGAGEE SHALL OBTAIN
AN  ORDER  FROM  THE SUPREME COURT IN THE COUNTY IN WHICH THE SALE IS TO
TAKE PLACE, AFTER THE TIME FOR THE UNITED STATES OF  AMERICA  TO  APPEAR
HAS EXPIRED, FORECLOSING THE LIEN OR INTEREST OF THE UNITED STATES. UPON
SUCH  ORDER,  THE SALE SHALL BE DEEMED TO BE A JUDICIAL SALE FORECLOSING
THE LIEN OR INTEREST OF THE UNITED STATES  OF  AMERICA  SUBJECT  TO  THE
RIGHTS OF THE UNITED STATES OF AMERICA PURSUANT TO APPLICABLE STATUTES.
  S  1412.  CONVEYANCE.    1.  THE PERSON AUTHORIZED TO CONDUCT THE SALE
PURSUANT TO SUBDIVISION ONE OF SECTION FOURTEEN HUNDRED  EIGHT  OF  THIS
ARTICLE SHALL, AT THE CLOSING OF TITLE HELD IN ACCORDANCE WITH THE TERMS
OF  SALE,  EXECUTE  AND DELIVER A DEED TO THE PURCHASER IN THE FOLLOWING
FORM:
                           POWER OF SALE DEED
  THIS DEED, MADE AS OF THE _______ DAY OF ___________,  _____,  BETWEEN
______________,  IN  THE CAPACITY OF AUCTIONEER/SHERIFF/MARSHAL/REFEREE,
HAVING AN OFFICE AT _________, ______________, NEW YORK ("GRANTOR")  AND
______________,     A     ____________     HAVING    AN    ADDRESS    AT
____________________, ______________, _____________ ("GRANTEE"),
                               WITNESSETH:
  THAT __________________("MORTGAGEE"), THE  OWNER  AND  HOLDER  OF  THE
MORTGAGE DESCRIBED IN EXHIBIT A ATTACHED HERETO ENCUMBERING THE PROPERTY
DESCRIBED  HEREINBELOW  (THE  "PROPERTY"),  AND  THE NOTE, BOND OR OTHER
OBLIGATION SECURED THEREBY, HAS FORECLOSED THE  LIEN  OF  SAID  MORTGAGE
PURSUANT   TO   ARTICLE  FOURTEEN  OF  THE  REAL  PROPERTY  ACTIONS  AND
PROCEEDINGS LAW OF THE STATE OF NEW YORK;
  THAT GRANTOR HAS BEEN DESIGNATED BY MORTGAGEE OR BY THE COURT  IN  THE
COUNTY  IN  WHICH  THE  SALE  HAS TAKEN PLACE TO CONDUCT THE SALE OF THE
PROPERTY;
  THAT THE SALE WAS DULY HELD ON  _______________  ___,  ____,  AND  THE
MEMORANDUM  OF  SALE  ATTACHED  HERETO  AS EXHIBIT B WAS EXECUTED AT THE
CONCLUSION OF THE SALE;
  AND THAT PURSUANT THERETO AND IN CONSIDERATION  OF  ___________DOLLARS
($_____________) PAID BY GRANTEE, BEING THE HIGHEST SUM BID AT THE SALE,
  GRANTOR DOES HEREBY GRANT AND CONVEY TO GRANTEE:
(LAND DESCRIPTION OF THE PROPERTY)

S. 3838                            10

  TOGETHER WITH ALL RIGHT, TITLE AND INTEREST, IF ANY, OF THE GRANTOR IN
AND  TO  ANY  STREETS AND ROADS ABUTTING THE ABOVE-DESCRIBED PREMISES TO
THE CENTER LINES THEREOF; TOGETHER WITH THE APPURTENANCES  AND  ALL  THE
ESTATE AND RIGHTS OF THE GRANTOR IN AND TO SAID PREMISES; TO HAVE AND TO
HOLD THE PREMISES HEREIN GRANTED TO THE GRANTEE, THE HEIRS OR SUCCESSORS
AND ASSIGNS OF THE GRANTEE FOREVER.
  IN  WITNESS  WHEREOF,  GRANTOR HAS HEREUNTO SET THE GRANTOR'S HAND AND
SEAL THE DATE FIRST ABOVE WRITTEN.
  ________________ (ACKNOWLEDGEMENT)
  2. BEFORE THE DEED IS EXECUTED AND DELIVERED  TO  THE  PURCHASER,  THE
MORTGAGEE  SHALL  FILE THE MORTGAGE AND ANY ASSIGNMENT NOT SHOWN TO HAVE
BEEN LOST OR DESTROYED IN THE OFFICE OF THE CLERK, UNLESS  IT  IS  IN  A
FORM  WHICH  CAN  BE RECORDED; IN WHICH CASE IT SHALL BE RECORDED IN THE
COUNTY OR COUNTIES WHERE THE MORTGAGED PROPERTY OR PROPERTIES ARE  SITU-
ATED;  THE  EXPENSE OF FILING OR RECORDING AND ENTRY SHALL BE ALLOWED IN
THE COSTS TO BE RECOVERED BY THE MORTGAGEE  PURSUANT  TO  THIS  ARTICLE;
AND,  IF FILED WITH THE CLERK, HE SHALL ENTER IN THE MINUTES THE TIME OF
FILING.
  3. THE PURCHASER OF THE MORTGAGED PROPERTY, UPON A SALE  CONDUCTED  AS
PRESCRIBED  IN THIS ARTICLE, THEREUPON OBTAINS MARKETABLE TITLE THERETO,
IN THE SAME MANNER AS A PURCHASER IN A JUDICIAL FORECLOSURE SALE  PURSU-
ANT TO ARTICLE THIRTEEN OF THIS CHAPTER AGAINST ALL PERSONS BOUND BY THE
SALE.
  S 1413. DISTRIBUTION OF PROCEEDS OF SALE.  1. THE PROCEEDS OF THE SALE
SHALL  BE  DISTRIBUTED AND PAID BY THE PERSON CONDUCTING THE SALE IN THE
FOLLOWING ORDER:
  (A) ALL TAXES, WATER RATES, SEWER RENTS AND ASSESSMENTS THAT ARE LIENS
UPON THE REAL PROPERTY SOLD, AND ANY LIENS OR ENCUMBRANCES PLACED  BY  A
CITY  AGENCY OR A MUNICIPALITY UPON THE REAL PROPERTY THAT HAVE PRIORITY
OVER THE FORECLOSED MORTGAGE.
  (B) THE COSTS AND EXPENSES OF THE SALE, PURSUANT TO  SECTION  FOURTEEN
HUNDRED SEVENTEEN OF THIS ARTICLE.
  (C)  TO THE MORTGAGEE, THE AMOUNT OF THE DEBT, ACCRUED INTEREST THERE-
ON, LATE CHARGES, AND ALL OTHER SUMS ADVANCED BY THE MORTGAGEE WHICH ARE
RECOVERABLE UNDER THE MORTGAGE, INCLUDING THE COSTS OF SALE AND  REASON-
ABLE  ATTORNEYS'  FEES  AND  DISBURSEMENTS,  OR  SO  MUCH THEREOF AS THE
PROCEEDS WILL PAY. THE PERSON CONDUCTING THE SALE SHALL TAKE THE AFFIDA-
VIT OF THE MORTGAGEE AS TO ALL OF THE FOREGOING AMOUNTS BEING  DUE,  AND
THE  RECEIPT  OF THE MORTGAGEE FOR THE AMOUNT SO PAID, AND FILE THE SAME
WITH THE REPORT OF SALE.
  (D) UPON ENTRY OF AN ORDER PURSUANT TO SECTION FOURTEEN HUNDRED  EIGH-
TEEN  OF  THIS ARTICLE PROVIDING FOR SAME, TO THE HOLDER OF ANY SUBORDI-
NATE MORTGAGE OR LIEN, OR TO THE OWNER OF THE EQUITY  OF  REDEMPTION  OR
ANY  PERSON OR ENTITY HAVING FILED A NOTICE OF CLAIM AGAINST THE PROPER-
TY, FROM THE THEN REMAINING PROCEEDS THE AMOUNT THEN DUE TO SUCH  PERSON
OR  ENTITY,  IN  THE  PRIORITY THEREOF, OR SO MUCH AS THE THEN REMAINING
PROCEEDS WILL PAY.
  2. ALL SURPLUS MONEYS ARISING FROM  THE  SALE  AFTER  PAYMENT  OF  THE
AMOUNTS DUE UNDER PARAGRAPHS (A), (B) AND (C) OF SUBDIVISION ONE OF THIS
SECTION  SHALL  BE  PAID TO THE COUNTY TREASURER FOR THE COUNTY IN WHICH
THE SALE TOOK PLACE BY THE PERSON CONDUCTING THE SALE WITHIN  FIVE  DAYS
AFTER THE SAME SHALL BE RECEIVED, IN LIKE MANNER AND WITH LIKE EFFECT AS
IF THE PROCEEDING TO FORECLOSE THE MORTGAGE OCCURRED PURSUANT TO ARTICLE
THIRTEEN OF THIS CHAPTER.

S. 3838                            11

  S  1414.  REPORT OF SALE.  1. WITHIN FIFTEEN DAYS AFTER COMPLETING THE
SALE AND EXECUTING THE PROPER CONVEYANCE TO THE  PURCHASER,  THE  PERSON
CONDUCTING THE SALE SHALL MAKE A REPORT OF THE SALE, WHICH SHALL STATE:
  (A) THE TIME WHEN AND THE PLACE WHERE THE SALE WAS MADE;
  (B) THE SUM BID FOR EACH DISTINCT PARCEL SEPARATELY SOLD;
  (C) THE NAME OF THE PURCHASER OF EACH DISTINCT PARCEL; AND
  (D) THE NAME OF EACH PERSON OR ENTITY, COURT OFFICER OR OTHER OFFICER,
TO WHOM PROCEEDS OF THE SALE WAS PAID, AND THE SUM THEREOF.
  2. THE REPORT OF SALE SHALL CONTAIN:
  (A)  AFFIDAVIT  OF  THE  PUBLICATION OF THE NOTICE OF SALE, AND OF THE
NOTICE OR NOTICES OF POSTPONEMENT, IF ANY, BY THE PUBLISHER  OR  PRINTER
OF  THE  NEWSPAPER  IN  WHICH THEY WERE PUBLISHED, OR BY THE PUBLISHER'S
FOREMAN OR PRINCIPAL CLERK;
  (B) COPIES OF THE AFFIDAVIT OR AFFIDAVITS, OF THE SERVICE OF COPIES OF
THE NOTICE OF INTENTION TO FORECLOSE AND THE NOTICE OF PENDENCY THERETO-
FORE FILED WITH THE CLERK OF THE COURT; AND
  (C) THE TERMS OF SALE AND EXECUTED MEMORANDUM OF SALE.
  3. THE REPORT SHALL SPECIFY THE AMOUNT CLAIMED TO BE DUE BY THE  MORT-
GAGEE  ON  THE  INDEBTEDNESS  SECURED BY THE MORTGAGE, TOGETHER WITH ALL
OTHER SUMS RECOVERABLE UNDER SECTION FOURTEEN HUNDRED SEVENTEEN OF  THIS
ARTICLE, THE AMOUNT DISTRIBUTED BY THE PERSON CONDUCTING THE SALE PURSU-
ANT  TO  SECTION FOURTEEN HUNDRED THIRTEEN OF THIS ARTICLE, AND TO WHOM,
AND THE AMOUNT OF THE DEFICIENCY OR SURPLUS  AFTER  APPLICATION  OF  THE
PROCEEDS OF SALE THERETO. THE REPORT SHALL CONTAIN THE MORTGAGEE'S AFFI-
DAVIT  SPECIFYING THE AMOUNT CLAIMED DUE BY THE MORTGAGEE ON THE INDEBT-
EDNESS SECURED BY THE MORTGAGE, TOGETHER WITH ALL OTHER SUMS RECOVERABLE
UNDER SECTION FOURTEEN HUNDRED SEVENTEEN OF THIS ARTICLE.
  4. THE MATTERS REQUIRED TO BE CONTAINED IN ANY OR ALL OF  THE  AFFIDA-
VITS  SPECIFIED HEREIN MAY BE CONTAINED IN ONE AFFIDAVIT, WHERE THE SAME
PERSON DEPOSES WITH RESPECT TO THEM. A COPY OF THE NOTICE OF SALE  SHALL
BE ANNEXED TO EACH AFFIDAVIT.
  S 1415. FILING OF REPORT OF SALE.  1. THE REPORT AND AFFIDAVITS SPECI-
FIED  IN  SECTION  FOURTEEN  HUNDRED  FOURTEEN  OF THIS ARTICLE SHALL BE
FILED, IN THE SAME MANNER AS THE FILING OF THE NOTICE OF PENDENCY PURSU-
ANT TO SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED THREE OF  THIS  ARTI-
CLE,  IN  THE  COUNTY  CLERK'S  OFFICE IN THE COUNTY WHERE THE SALE TOOK
PLACE WITHIN THIRTY DAYS AFTER THE COMPLETION OF THE SALE AND  EXECUTION
OF  THE  PROPER  CONVEYANCE  TO  THE PURCHASER, AND, AS SUCH, CONSTITUTE
PRESUMPTIVE EVIDENCE OF THE MATTERS OF FACT THEREIN STATED, WITH RESPECT
TO ANY MORTGAGED PROPERTY SOLD WHICH IS SITUATED IN THAT COUNTY.
  2. EACH COUNTY CLERK IN THIS STATE IN  WHOSE  OFFICE  REPORTS  OF  THE
FORECLOSURE  OF  MORTGAGES  BY POWER OF SALE HAVE BEEN OR SHALL BE FILED
PURSUANT TO THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION, IS HEREBY
AUTHORIZED TO DELIVER CERTIFIED COPIES OF THE SAME TO THE  PURCHASER  OF
THE  MORTGAGED  PROPERTY  ON  THE  FORECLOSURE SALE OR TO ANY MORTGAGOR,
OBLIGOR ON THE NOTE OR BOND, OWNER OF, OR ANY  OTHER  PERSON  OR  ENTITY
HAVING  A  SUBORDINATE  INTEREST IN OR LIEN UPON, THE MORTGAGED PROPERTY
WHICH WAS FORECLOSED BY THE SALE, UPON REQUEST THEREFORE.
  S 1416. MULTIPLE COLLATERAL; DESIGNATION OF ORDER OF SALE OF  PARCELS.
WHERE THE INDEBTEDNESS IS SECURED BY MORE THAN ONE MORTGAGE ON MORTGAGED
PROPERTY  CONSISTING OF MORE THAN ONE FUNCTIONALLY SEPARATE AND DISTINCT
PROPERTY, UNLESS OTHERWISE PROVIDED IN THE MORTGAGE OR IN ANY EXTENSION,
AMENDMENT OR MODIFICATION THEREOF OR INSTRUMENT AMENDATORY THERETO, EACH
PROPERTY SHALL BE SOLD EITHER (A) SEPARATELY IN THE ORDER DESIGNATED  BY
THE  MORTGAGEE (WHICH MAY BE ON A SINGLE SALE DATE, OR ON SEPARATE DATES
AS PROVIDED IN THE NOTICE OF SALE), OR  (B)  AS  OTHERWISE  DIRECTED  BY

S. 3838                            12

ORDER  OF  THE SUPREME COURT FOR THE COUNTY IN WHICH THE SALE IS TO TAKE
PLACE, PURSUANT TO A MOTION MADE UNDER THE INDEX NUMBER OF THE NON-JUDI-
CIAL PROCEEDING FOR FORECLOSURE OF POWER OF SALE.  THE  MORTGAGEE  SHALL
NOT  SCHEDULE  OR  CONDUCT THE SALE OF THE SUBSEQUENT PROPERTY SO DESIG-
NATED UNTIL AFTER THE DEFICIENCY HAS BEEN DETERMINED IN ACCORDANCE  WITH
SECTION  FOURTEEN  HUNDRED  NINETEEN  OF  THIS ARTICLE, WHEREUPON IN THE
EVENT A DEFICIENCY EXISTS, THE MORTGAGEE MAY SCHEDULE  AND  CONDUCT  THE
SALE OF THE SUBSEQUENT PROPERTY IN THE ORDER DESIGNATED BY THE MORTGAGEE
UNLESS  THE COURT ORDERS OTHERWISE, SUCH SALE TO BE CONDUCTED IN ACCORD-
ANCE WITH THE PROVISIONS OF THIS ARTICLE.
  S 1417. COSTS AND EXPENSES ALLOWED.  THE MORTGAGEE SHALL  BE  ENTITLED
TO  RECOVER OUT OF THE PROCEEDS OF SALE, OR UPON APPLICATION FOR A DEFI-
CIENCY JUDGMENT, THE COSTS AND EXPENSES OF:
  1. ADVERTISEMENT OF THE NOTICE OF SALE, AS DETERMINED BY PAID RECEIPTS
THEREFOR;
  2. SERVICE OF THE NOTICE OF INTENTION TO FORECLOSE AND THE  NOTICE  OF
SALE;
  3.  PREPARATION AND FILING OF THE AFFIDAVITS REQUIRED UNDER THIS ARTI-
CLE, THE POWER OF SALE DEED, AND REPORT OF SALE;
  4. THE CONDUCT OF THE SALE, INCLUDING THE FEE OF THE OFFICER  CONDUCT-
ING THE SALE, WHICH, EXCEPT AS SHALL BE DIRECTED BY THE COURT, SHALL NOT
EXCEED ONE THOUSAND DOLLARS;
  5.  RECORDING  OF  THE  DEED  IF THE MORTGAGEE IS THE PURCHASER AT THE
SALE;
  6. FILING OR RECORDING THE MORTGAGE IF NOT THERETOFORE PAID FOR BY THE
MORTGAGOR; AND
  7. THE REASONABLE ATTORNEYS' FEES  INCURRED  IN  CONNECTION  WITH  THE
NON-JUDICIAL  PROCEEDING  UNDER  THIS  ARTICLE WHICH, EXCEPT AS SHALL BE
DIRECTED BY THE COURT, SHALL NOT EXCEED THE SUM OF  TWENTY-FIVE  HUNDRED
DOLLARS.
  FEES  DESIGNATED IN THIS SECTION IN DOLLAR AMOUNTS SHALL BE INDEXED IN
ACCORDANCE WITH CHANGES IN  THE  FEDERAL  CONSUMER  PRICE  INDEX  -  ALL
CONSUMERS, OVER BASE YEAR TWO THOUSAND THIRTEEN.
  S 1418. APPLICATION FOR SURPLUS.  1. ANY PERSON OR ENTITY CLAIMING THE
SURPLUS  MONEYS  ARISING  FROM  THE SALE OF THE MORTGAGED PROPERTY, OR A
PART THEREOF, MAY, WITHIN TWENTY DAYS AFTER THE FILING OF THE REPORT  OF
THE  SALE,  FILE  UNDER  THE  INDEX  NUMBER ASSIGNED TO THE NON-JUDICIAL
PROCEEDING IN THE OFFICE OF THE CLERK OF THE COUNTY WHERE THE SALE  TOOK
PLACE,  A  WRITTEN NOTICE OF THE CLAIM, STATING THE NATURE AND EXTENT OF
THE CLAIM. THEREAFTER, AN APPLICATION, WITH PROOF OF  SERVICE  UPON  THE
MORTGAGOR,  THE  RECORD  OWNER  OF THE MORTGAGED PROPERTY, AND ANY OTHER
PERSON WHO OR ENTITY WHICH HAS FILED A CLAIM TO THE SURPLUS  MONEYS  MAY
BE  MADE  BY  ANY  PERSON  WHO  OR ENTITY WHICH HAS FILED A CLAIM TO THE
SURPLUS MONEYS, SEEKING AN ORDER DIRECTING PAYMENT THEREOF  OUT  OF  THE
SURPLUS MONEYS.
  2. UPON SUCH APPLICATION, OR AT ANY TIME WITHIN THREE MONTHS THEREAFT-
ER, ON NOTICE TO ALL PERSONS WHO OR ENTITIES WHICH HAVE BEEN SERVED WITH
THE  NOTICE  OF  SALE  OR FILED CLAIMS TO THE SURPLUS MONEY, OR ANY PART
THEREOF, ON MOTION OF ANY PERSON WHO OR ENTITY WHICH HAS FILED A  NOTICE
OF CLAIM TO THE SURPLUS MONEY, OR ANY PART THEREOF, THE COURT, BY REFER-
ENCE  OR  OTHERWISE,  SHALL  ASCERTAIN  AND REPORT THE AMOUNT DUE TO THE
APPLICANT, OR TO ANY PERSON WHO OR ENTITY WHICH HAS A LIEN ON  OR  CLAIM
TO  SUCH  SURPLUS  MONEY,  OR  ANY PART THEREOF, AND THE PRIORITY OF THE
SEVERAL LIENS OR CLAIMS THEREON, AND SHALL  ORDER  DISTRIBUTION  OF  THE
SURPLUS MONEYS BY THE COUNTY TREASURER.

S. 3838                            13

  3.  THE OWNER OF THE EQUITY OF REDEMPTION, OR ANY PERSON WHO OR ENTITY
WHICH HAS RESPONDED TO THE APPLICATION, OR  ANY  PERSON  WHO  OR  ENTITY
WHICH  FILES  A NOTICE OF CLAIM OR HAS A RECORDED LIEN AGAINST THE MORT-
GAGED PROPERTY SHALL BE GIVEN NOTICE BY MAIL OR IN SUCH OTHER MANNER  AS
THE  COURT  SHALL  DIRECT,  TO  ATTEND ANY HEARING ON DISPOSITION OF THE
SURPLUS MONEYS AND SHALL HAVE THE RIGHT TO RECEIVE DISTRIBUTION  OF  THE
SURPLUS  MONEYS,  OR  ANY PORTION THEREOF, IN ANY MANNER DIRECTED BY THE
COURT.
  S 1419. DEFICIENCY JUDGMENT.  1. UNLESS OTHERWISE AGREED BY THE  MORT-
GAGOR  AND  THE  MORTGAGEE IN THE MORTGAGE, A PERSON WHO OR ENTITY WHICH
OWES PAYMENT OF AN OBLIGATION SECURED BY THE MORTGAGE  FORECLOSED  UNDER
THIS  ARTICLE IS LIABLE FOR THE WHOLE RESIDUE, OR SO MUCH THEREOF AS THE
COURT MAY DETERMINE, OF THE DEBT REMAINING UNSATISFIED, AFTER  THE  SALE
OF  THE  MORTGAGED  PROPERTY  AND  THE  APPLICATION OF THE PROCEEDS, THE
AMOUNT OF THE DEBT REMAINING UNSATISFIED TO BE DETERMINED BY  THE  COURT
AS HEREIN PROVIDED.
  2.  NOT  LATER THAN NINETY DAYS AFTER THE DELIVERY TO THE PURCHASER OF
THE POWER OF SALE DEED TO THE MORTGAGED PROPERTY, THE PERSON TO WHOM  OR
ENTITY  TO  WHICH  SUCH  RESIDUE  SHALL BE OWING MAY MAKE AN APPLICATION
UNDER THE INDEX NUMBER ASSIGNED  THE  NON-JUDICIAL  PROCEEDING,  IN  THE
SUPREME COURT FOR THE COUNTY IN WHICH THE MORTGAGED PROPERTY IS LOCATED,
OR  IN A COUNTY IN WHICH THE SALE HAS TAKEN PLACE FOR A DEFICIENCY JUDG-
MENT AGAINST THE PERSONS OR ENTITIES LIABLE THEREFOR UPON NOTICE TO SUCH
PERSONS OR ENTITIES. SUCH NOTICE SHALL BE SERVED PERSONALLY OR  IN  SUCH
OTHER  MANNER AS THE COURT MAY DIRECT. UPON SUCH APPLICATION, THE COURT,
WHETHER OR NOT THE PERSON OR ENTITY CLAIMED TO BE LIABLE FOR THE RESIDUE
APPEARS, SHALL DETERMINE, UPON REASONABLE APPRAISAL  BY  A  REAL  ESTATE
APPRAISER  LICENSED  IN  THE STATE OF NEW YORK, OR OTHERWISE AS IT SHALL
DIRECT, THE FAIR AND REASONABLE MARKET VALUE OF THE  MORTGAGED  PROPERTY
AS  OF  THE  DATE  THE  MORTGAGED PROPERTY WAS BID ON AT AUCTION OR SUCH
NEAREST EARLIER DATE AS THERE SHALL HAVE BEEN ANY MARKET  VALUE  THEREOF
AND  SHALL  MAKE  AN  ORDER DIRECTING THE ENTRY OF A DEFICIENCY JUDGMENT
AGAINST THE PERSON OR ENTITY LIABLE THEREFOR. SUCH  DEFICIENCY  JUDGMENT
SHALL BE FOR AN AMOUNT EQUAL TO THE AGGREGATE AMOUNT OF THE INDEBTEDNESS
DUE  TO  THE  MORTGAGEE,  TOGETHER WITH ALL OTHER SUMS RECOVERABLE UNDER
SECTION FOURTEEN HUNDRED SEVENTEEN OF THIS ARTICLE AS SUCH SHALL BE  SET
FORTH  IN  THE  REPORT  OF SALE PURSUANT TO SUBDIVISION THREE OF SECTION
FOURTEEN HUNDRED FOURTEEN OF THIS ARTICLE  LESS  THE  HIGHER  OF:    (A)
MARKET VALUE OF THE MORTGAGED PROPERTY AS DETERMINED BY THE COURT OR (B)
THE SALES PRICE OF THE MORTGAGED PROPERTY AT THE PUBLIC SALE.
  3. IF NO APPLICATION FOR A DEFICIENCY JUDGMENT SHALL BE MADE AS HEREIN
PRESCRIBED,  THE  PROCEEDS  OF THE SALE REGARDLESS OF THE AMOUNT THEREOF
SHALL BE DEEMED TO BE IN FULL SATISFACTION OF THE MORTGAGE DEBT, AND  NO
RIGHT TO RECOVER ANY DEFICIENCY IN ANY ACTION OR PROCEEDING SHALL EXIST.
  S 1420. RECEIVER. 1. WHERE THE MORTGAGE PROVIDES THAT THE MORTGAGEE IS
ENTITLED  TO  THE  APPOINTMENT OF A RECEIVER FOR THE MORTGAGED PROPERTY,
THE MORTGAGEE SHALL HAVE THE RIGHT AT ANY TIME AFTER THE FILING  OF  THE
NOTICE  OF  PENDENCY  PURSUANT TO SECTION FOURTEEN HUNDRED THREE OF THIS
ARTICLE TO MAKE AN APPLICATION UNDER THE INDEX NUMBER  ASSIGNED  TO  THE
NON-JUDICIAL PROCEEDING, IN THE SUPREME COURT IN THE COUNTY IN WHICH THE
SALE TAKES PLACE, FOR THE APPOINTMENT OF A RECEIVER.
  2.  WHERE THE MORTGAGE PROVIDES THAT A RECEIVER MAY BE APPOINTED WITH-
OUT NOTICE OR CONTAINS THE COVENANT SET  FORTH  IN  SUBDIVISION  TEN  OF
SECTION  TWO  HUNDRED  FIFTY-FOUR OF THE REAL PROPERTY LAW, NOTICE OF AN
APPLICATION FOR SUCH APPOINTMENT SHALL NOT BE REQUIRED AND THE  RECEIVER
SHALL  BE  APPOINTED  BY THE COURT PURSUANT TO AN ORDER SUBMITTED BY THE

S. 3838                            14

MORTGAGEE SIMULTANEOUSLY WITH, OR AT ANY TIME AFTER, THE FILING  OF  THE
APPLICATION THEREFOR.
  3.  WHERE  A  RECEIVER HAS BEEN APPOINTED, UPON THE APPLICATION OF THE
MORTGAGEE, THE COURT MAY DIRECT THAT THE RECEIVER OF THE RENTS APPLY THE
RENTS RECEIVED BY THE RECEIVER TOWARDS THE PAYMENT OF  ACCRUED  INTEREST
ON  THE  MORTGAGE,  PROVIDED  DUE PROVISION SHALL HAVE BEEN MADE FOR THE
PAYMENT OF TAXES AND ORDINARY AND NECESSARY EXPENSES FOR THE  OPERATION,
REPAIR AND MAINTENANCE OF THE MORTGAGED PROPERTY AND SUCH OTHER EXPENSES
AS  THE  COURT MAY DIRECT. ANY MONEYS SO PAID OVER BY THE RECEIVER SHALL
BE DEDUCTED FROM THE AMOUNT DUE ON THE MORTGAGE, OR THE  NOTE,  BOND  OR
OBLIGATION SECURED THEREBY, AND THE MORTGAGEE'S AFFIDAVIT OF THE INDEBT-
EDNESS  FILED  WITH  THE  REPORT  OF  SALE  PURSUANT TO SECTION FOURTEEN
HUNDRED FOURTEEN OF THIS ARTICLE SHALL SO STATE THE AMOUNTS THEREOF.
  4. IN A CITY WITH A POPULATION OF ONE  MILLION  OR  MORE  PERSONS,  AN
ORDER APPOINTING A RECEIVER TO RECEIVE THE RENTS AND PROFITS OF A MULTI-
PLE DWELLING SHALL PROVIDE THAT THE RECEIVER:
  (A)  REGISTER  WITH ANY MUNICIPAL DEPARTMENT AS PROVIDED BY APPLICABLE
LAW; AND
  (B) EXPEND RENTS AND INCOME AND PROFITS AS  DESCRIBED  IN  SUBDIVISION
THREE  OF  THIS  SECTION,  EXCEPT  THAT A PRIORITY SHALL BE GIVEN TO THE
CORRECTION OF IMMEDIATELY HAZARDOUS AND HAZARDOUS VIOLATIONS OF  HOUSING
MAINTENANCE  LAWS WITHIN THE TIME SET BY ORDERS OF ANY MUNICIPAL DEPART-
MENT, OR, IF NOT FEASIBLE, SEEK A POSTPONEMENT OF THE TIME  FOR  COMPLI-
ANCE.
  5.  THE  RECEIVER SHALL BE ENTITLED TO SUCH COMMISSIONS, NOT EXCEEDING
FIVE PERCENT OF THE GREATER OF (A) THE SUMS RECEIVED BY THE RECEIVER  OR
(B)  THE  SUMS  DISBURSED  BY  THE  RECEIVER,  AS THE COURT BY WHICH THE
RECEIVER IS APPOINTED ALLOWS.
  S 1421. RIGHT TO SEEK JUDICIAL INTERVENTION; MORTGAGEE'S LIABILITY FOR
FAILURE TO COMPLY WITH THIS  ARTICLE.  1.  IF  THE  MORTGAGEE  COMMENCES
PROCEEDINGS  UNDER  THIS  ARTICLE TO FORECLOSE A MORTGAGE, OR EXTENSION,
AMENDMENT, MODIFICATION OR CONSOLIDATION THEREOF, EXECUTED PRIOR TO  THE
EFFECTIVE  DATE  OF THIS ARTICLE, THE MORTGAGOR MAY BY WRITTEN NOTICE TO
THE MORTGAGEE REQUIRE THAT FURTHER FORECLOSURE PROCEEDINGS BE  CONDUCTED
JUDICIALLY  AS PROVIDED IN ARTICLE THIRTEEN OF THIS CHAPTER. SUCH NOTICE
MUST BE DELIVERED TO THE MORTGAGEE BY REGISTERED OR CERTIFIED  MAIL,  OR
SUCH  OTHER  METHOD  AS MAY BE SPECIFIED IN THE MORTGAGE, POSTMARKED NOT
LATER THAN FORTY DAYS AFTER THE DATE THE MORTGAGOR RECEIVES  THE  NOTICE
OF  INTENTION  TO FORECLOSE AS PROVIDED IN THIS ARTICLE, AND SHALL STATE
(A) THE DATE ON WHICH THE MORTGAGE, OR EXTENSION,  AMENDMENT,  MODIFICA-
TION OR CONSOLIDATION THEREOF, THAT THE MORTGAGEE SEEKS TO FORECLOSE WAS
EXECUTED,  AND (B) THAT THE MORTGAGOR IS EXERCISING ITS RIGHT UNDER THIS
SECTION TO REQUIRE THAT THE FORECLOSURE OF  THE  MORTGAGE  BE  CONDUCTED
THROUGH THE JUDICIAL PROCESS.
  2.  IF THE MORTGAGEE COMMENCES PROCEEDINGS UNDER THIS ARTICLE TO FORE-
CLOSE A MORTGAGE, OR EXTENSION, AMENDMENT, MODIFICATION OR CONSOLIDATION
THEREOF, EXECUTED AFTER THE EFFECTIVE DATE OF THIS ARTICLE, THE  MORTGA-
GOR,  NOT LATER THAN FORTY DAYS AFTER THE DATE IT RECEIVES THE NOTICE OF
INTENTION TO FORECLOSE AS PROVIDED IN THIS ARTICLE, MAY APPLY, BY  ORDER
TO SHOW CAUSE, TO THE SUPREME COURT IN THE COUNTY IN WHICH THE MORTGAGED
PROPERTY  IS  LOCATED FOR AN ORDER DIRECTING THAT FURTHER PROCEEDINGS BE
CONDUCTED PURSUANT TO ARTICLE THIRTEEN OF THIS CHAPTER, AND FOR A TEMPO-
RARY RESTRAINING ORDER STAYING FURTHER PROCEEDINGS  UNDER  THIS  ARTICLE
PENDING  A HEARING OF THE APPLICATION. THE APPLICATION SHALL INCLUDE ONE
OR MORE AFFIDAVITS (A) STATING WHETHER A PREVIOUS  APPLICATION  FOR  THE

S. 3838                            15

SAME OR SIMILAR RELIEF HAS BEEN MADE, AND IF SO THE OUTCOME THEREOF, AND
(B) STATING FACTS TO SUPPORT ONE OR MORE OF THE FOLLOWING ALLEGATIONS:
  (1)  THAT  THE  MORTGAGE,  OR  EXTENSION,  AMENDMENT,  MODIFICATION OR
CONSOLIDATION THEREOF, SOUGHT  TO  BE  FORECLOSED  DOES  NOT  CONTAIN  A
PROVISION  PERMITTING  THE FORECLOSURE THEREOF BY POWER OF SALE OR OTHER
NON-JUDICIAL MEANS;
  (2) THAT THE OBLIGATION SECURED BY THE  MORTGAGE  IS  INVALID  OR  NOT
OTHERWISE DUE;
  (3)  THAT THE MORTGAGOR IS NOT IN DEFAULT UNDER THE MORTGAGE OR OTHER-
WISE HAS A MERITORIOUS DEFENSE TO THE FORECLOSURE THEREOF;
  (4) THAT THE MORTGAGEE HAS NOT COMPLIED WITH THE TERMS AND  CONDITIONS
OF THIS ARTICLE; OR
  (5)  THAT  UNDER THE FACTS AND CIRCUMSTANCES, ALLOWING THE FORECLOSURE
TO PROCEED UNDER THIS ARTICLE WOULD CAUSE AN UNDUE HARDSHIP TO THE MORT-
GAGOR.
  3. IF THE APPLICATION IS GRANTED, THE FORECLOSURE  SHALL,  UNLESS  THE
COURT  SUBSEQUENTLY  ORDERS OTHERWISE, PROCEED PURSUANT TO ARTICLE THIR-
TEEN OF THIS CHAPTER FOR THE JUDICIAL FORECLOSURE OF THE MORTGAGE.
  4. IF THE APPLICATION IS DENIED, THE SALE MAY PROCEED PURSUANT TO THIS
ARTICLE.
  5. AT ANY TIME  THE  MORTGAGEE  MAY,  WITHOUT  PREJUDICE,  VOLUNTARILY
DISCONTINUE  PROCEEDINGS  UNDER  THIS ARTICLE AND PURSUE SUCH RIGHTS AND
REMEDIES AS MAY BE AVAILABLE TO IT UNDER ARTICLE THIRTEEN OF THIS  CHAP-
TER.
  6. AFTER RECEIVING THE NOTICE OF INTENTION TO FORECLOSE, AN INTERESTED
PARTY  OTHER  THAN  THE MORTGAGOR MAY PETITION THE COURT FOR RELIEF ONLY
PURSUANT TO THE PROVISIONS OF ARTICLE SIXTY-THREE OF THE CIVIL  PRACTICE
LAW  AND  RULES.  THE  COURT  SHALL  APPLY THE STANDARDS FOR PRELIMINARY
INJUNCTIVE  RELIEF  AND  SHALL  CONSIDER  WHETHER  GRANTING  THE  RELIEF
REQUESTED  WILL  PREJUDICE THE SUBSTANTIAL RIGHTS OF ANY PARTY OR UNDULY
DELAY THE ADJUDICATION OF SUCH RIGHTS.
  7. ANY PERSON ENTITLED TO RECEIVE NOTICE OF THE INTENTION TO FORECLOSE
OR NOTICE OF SALE UNDER THIS ARTICLE MAY RECOVER FROM THE MORTGAGEE  ANY
DAMAGES CAUSED BY THE FAILURE OF THE MORTGAGEE TO COMPLY WITH THE PROCE-
DURES AND CONDITIONS SET FORTH IN THIS ARTICLE.
  S  2.  This act shall take effect immediately; provided, however, that
any proceeding commenced following the expiration and repeal  of  former
article  14  of the real property actions and proceedings law on July 1,
2009, which otherwise would have been eligible under such article  shall
be  eligible under this act, pursuant to an agreement of both parties to
the proceeding, upon the effective date of this act.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.