|Assembly Actions - Lowercase
Senate Actions - UPPERCASE
|Jan 08, 2014||referred to housing, construction and community development|
|Jan 09, 2013||referred to housing, construction and community development|
senate Bill S523
Relates to the failure of auction and requirements for sale of real estate owned property
Archive: Last Bill Status - In Committee
- In Committee
- On Floor Calendar
- Passed Senate
- Passed Assembly
- Delivered to Governor
- Signed/Vetoed by Governor
view actions (2)
S523 - Bill Details
S523 - Bill Texts
Relates to the failure of auction and requirements for sale of real estate owned property; defines terms; describes requirements for sale and penalties.
view sponsor memo
TITLE OF BILL:
to amend the real property actions and proceedings law, in relation to
the failure of auction and requirements for sale of real estate owned
PURPOSE OR GENERAL IDEA:
To create a transparent process by which banks contract with service
providers for an REO transaction.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1. Amends the Real Property Actions and Proceedings Law to
define real estate owned property, registered real estate owned
property lawyer, registered real estate owned property agent or
broker and registered real estate owned property maintenance company.
This section also requires the secretary of state to post and maintain
on its website or otherwise make available a list of registered real
estate owned property lawyers, a list of registered real estate owned
property agents or brokers and a list of registered real estate owned
property maintenance companies along with their contact information.
The secretary of state shall also consult with the Division of
Minority and Women's Business Development to ensure that businesses
certified under article fifteen-A of the executive law are included
on these lists.
It also amends the Real Property Actions and Proceedings Law by
creating a process by which the New York State Secretary of State
shall post a list of the registered real estate owned lawyers,
agents, brokers and maintenance companies and denote which
individuals or entities are minority- or women-owned, and amends the
Real Property Actions and Proceedings Law by requiring that any
state-chartered banks under the supervision of the New York State
Banking Department choose an attorney, agent, broker or maintenance
company to represent them in a transaction involving real estate
owned property from the list of registered real estate owned
lawyers, agents, brokers and maintenance companies.
Finally, this section amends the Real Property Actions and Proceedings
Law to impose penalties incurred for violation of this section,
including penalties incurred by repeat offenders.
Section 2. Provides for an effective date 90 days after it shall have
Real estate owned or REO is a class of property owned by a lender,
typically a bank or mortgage company, after an unsuccessful sale at a
foreclosure auction. A bank typically sets the opening bid at a
foreclosure auction for at least the outstanding loan amount; if
there are no bidders that are interested, then the bank will legally
repossess the property. As soon as the bank repossesses the property,
it is listed on their books as REO - Real Estate Owned - and is
categorized as an asset. Once a property has been repossessed and it
becomes classified as REO, the bank will go through the process of
trying to sell the property on its own. The bank will attempt to
remove some of the liens and other expenses on the home and try to
resell it to the public. Generally, bank REO properties are in poor
condition in terms of repairs and maintenance, but are nonetheless
appealing to real estate investors looking for an attractive deal
that compensates for the condition of the property
When an investor or purchaser contracts to buy a REO property, an
attorney is needed to represent the bank in a real estate
transaction, an agent or broker is needed to list the property and a
maintenance company is needed to maintain the condition of the
property under the new foreclosure laws. At the present time, no
guidelines exist to dictate the attorney chosen by the bank in these
transactions, and they are often funneled to an attorney the bank has
a pre-existing relationship with. This bill would create a more
transparent and accessible mechanism by which individuals and
businesses in New York State could become the contracted or
affiliated attorney, agent, broker or maintenance company assigned to
real estate transactions involving, REO property.
05/03/10 REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
05/05/10 COMMITTEE DISCHARGED AND COMMITTED TO JUDICIARY
01/11/11 REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
01/04/12 REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT
To be determined.
This act shall take effect ninety days after it shall have become a law.
view full text
S T A T E O F N E W Y O R K ________________________________________________________________________ 523 2013-2014 Regular Sessions I N S E N A T E (PREFILED) January 9, 2013 ___________ Introduced by Sen. SAMPSON -- 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 the failure of auction and requirements for sale of real estate owned property 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 1355-a to read as follows: S 1355-A. FAILURE OF AUCTION: REQUIREMENTS FOR SALE OF REAL ESTATE OWNED PROPERTY. 1. DEFINITIONS. (A) "REAL ESTATE OWNED PROPERTY" SHALL MEAN A CLASS OF PROPERTY OWNED BY A LENDER, TYPICALLY A BANK OR MORTGAGE COMPANY, AFTER AN UNSUCCESSFUL SALE AT A FORECLOSURE AUCTION; THIS CLASS OF PROPERTY IS CATEGORIZED AS AN ASSET. (B) "REGISTERED REAL ESTATE OWNED PROPERTY LAWYER" SHALL MEAN ANY ATTORNEY WHO HAS REGISTERED WITH THE SECRETARY OF STATE PURSUANT TO SUBDIVISION TWO OF THIS SECTION TO CONDUCT A SALE OR OTHER TRANSACTION OF REAL ESTATE OWNED PROPERTY; THIS SECTION SHALL NOT BE CONSTRUED TO MEAN ANY ATTORNEY ON RETAINER BY THE BANK TO HANDLE REAL ESTATE TRANS- ACTIONS OR ANYONE DEEMED IN-HOUSE COUNSEL. (C) "REGISTERED REAL ESTATE OWNED PROPERTY AGENT OR BROKER" SHALL MEAN ANY INDIVIDUAL INVOLVED IN REAL ESTATE BROKERAGE ACTIVITY AS DEFINED IN SECTION FIVE HUNDRED NINETY-NINE-B OF THE BANKING LAW WHO HAS REGISTERED WITH THE SECRETARY OF STATE PURSUANT TO SUBDIVISION TWO OF THIS SECTION TO LIST FOR SALE ANY REAL ESTATE OWNED PROPERTY; THIS SECTION SHALL NOT BE CONSTRUED TO MEAN ANY AGENT OR BROKER ON RETAINER BY A BANK TO HANDLE REAL ESTATE SALES OR PURCHASES OR ANY AGENT OR BROKER EMPLOYED BY A BANK OR MORTGAGE COMPANY'S SUBSIDIARY. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02184-01-3 S. 523 2 (D) "REGISTERED REAL ESTATE OWNED PROPERTY MAINTENANCE COMPANY" SHALL MEAN ANY INDIVIDUAL OR COMPANY WHO HAS REGISTERED WITH THE SECRETARY OF STATE PURSUANT TO SUBDIVISION TWO OF THIS SECTION TO MAINTAIN FORECLOSED PROPERTIES PURSUANT TO SECTION THIRTEEN HUNDRED SEVEN OF THIS ARTICLE. 2. REGISTRATION. (A) THE SECRETARY OF STATE SHALL POST AND MAINTAIN ON ITS WEBSITE OR OTHERWISE MAKE READILY AVAILABLE A LIST OF REGISTERED REAL ESTATE OWNED PROPERTY LAWYERS, A LIST OF REGISTERED REAL ESTATE OWNED PROPERTY AGENTS OR BROKERS AND A LIST OF REGISTERED REAL ESTATE OWNED PROPERTY MAINTENANCE COMPANIES ALONG WITH COMPREHENSIVE CONTACT INFORMATION, INCLUDING, BUT NOT LIMITED TO, FULL NAME, NAME OF ANY ASSO- CIATED LAW FIRM, LEGAL PRACTICE OR PARENT COMPANY, ADDRESS, PHONE NUMBER, AND ANY KNOWN AFFILIATION WITH ANY STATE-CHARTERED BANK. (I) THE SECRETARY OF STATE SHALL CONSULT WITH THE HEAD OF THE DIVISION OF MINORITY AND WOMEN'S BUSINESS DEVELOPMENT TO USE REASONABLE MEASURES TO ENSURE THAT BUSINESSES CERTIFIED UNDER ARTICLE FIFTEEN-A OF THE EXEC- UTIVE LAW, WHICH TRADITIONALLY HAVE BEEN WOMEN AND MINORITIES ARE AFFORDED EQUAL OPPORTUNITY TO PARTICIPATE IN AND BE INCLUDED ON THE LISTS ALLOWED UNDER THIS SECTION. (II) THE SECRETARY OF STATE SHALL DENOTE ON THE LIST CREATED UNDER THIS SECTION THAT AN ATTORNEY, BROKER OR MAINTENANCE COMPANY IS A MINOR- ITY OR WOMEN-OWNED BUSINESS OR ENTERPRISE, AND SHALL ENSURE THAT, AT ALL TIMES, FIVE TO TEN PERCENT OF THE LIST IS MADE UP OF MINORITY AND WOMEN-OWNED BUSINESSES. (B) ANY ATTORNEY, REAL ESTATE BROKER OR PROPERTY MAINTENANCE COMPANY INTENDING TO BE PART OF THE LIST MAINTAINED PURSUANT TO THIS SECTION SHALL MAKE APPLICATION TO THE SECRETARY OF STATE. (C) SUCH APPLICATION SHALL BE IN A FORM AND MANNER PRESCRIBED BY THE SECRETARY OF STATE AND SHALL CONTAIN SUCH INFORMATION AS, IN THE SECRE- TARY OF STATE'S JUDGMENT, IS REASONABLE AND NECESSARY TO DETERMINE THE QUALIFICATIONS FOR LICENSING OF THE APPLICANT, EXCEPT THAT THE SECRETARY OF STATE SHALL AUTOMATICALLY DISQUALIFY ANY INDIVIDUAL OR COMPANY AFFIL- IATED WITH OR RETAINED BY ANY STATE-CHARTERED BANK. (D) THE APPLICATION SHALL BE SUBSCRIBED BY THE APPLICANT AND AFFIRMED UNDER PENALTY OF PERJURY. (E) THERE SHALL BE NO APPLICATION FEE ASSOCIATED WITH THE APPLICATION DESCRIBED IN THIS ARTICLE. (F) EACH APPLICATION SHALL BE ACCOMPANIED BY SATISFACTORY EVIDENCE OF GOOD STANDING AND LEGITIMATE LICENSING WITH THE NEW YORK STATE BAR, OR BY THE SECRETARY OF STATE OR DEPARTMENT OF STATE. (G) ANY APPLICANT FOR INCLUSION ON THIS LIST MAY SUBMIT SATISFACTORY EVIDENCE OF LICENSURE TO PRACTICE AN EQUIVALENT OCCUPATION ISSUED BY ANY OTHER STATE, TERRITORY, PROTECTORATE OR DEPENDENCY OF THE UNITED STATES OR ANY OTHER COUNTRY IN LIEU OF THE EVIDENCE REQUIRED BY THIS SUBDIVI- SION, PROVIDED THAT SUCH LICENSE WAS GRANTED IN COMPLIANCE WITH STAND- ARDS WHICH WERE, IN THE JUDGMENT OF THE SECRETARY OF STATE, NOT LOWER THAN THOSE OF THIS STATE AND PROVIDED THAT SUCH STATE, TERRITORY, PROTECTORATE, DEPENDENCY, OR COUNTRY EXTENDS SIMILAR RECIPROCITY TO THE LICENSEES OF THIS STATE OR THE APPLICANT PRACTICED AN EQUIVALENT OCCUPA- TION IN SUCH STATE, TERRITORY, PROTECTORATE, DEPENDENCY OR COUNTRY FOR A MINIMUM OF FIVE YEARS. (H) IN ADDITION TO THE POWERS AND DUTIES ELSEWHERE PRESCRIBED IN NEW YORK STATE LAW, THE SECRETARY OF STATE SHALL HAVE THE POWER TO: (I) APPOINT A SUFFICIENT NUMBER OF ASSISTANTS, INSPECTORS AND OTHER EMPLOYEES AS MAY BE NECESSARY TO CARRY OUT THE PROVISIONS OF THIS ARTI- CLE, TO PRESCRIBE THEIR DUTIES, AND TO FIX THEIR COMPENSATION WITHIN THE AMOUNT APPROPRIATED THEREFOR; S. 523 3 (II) EXAMINE THE QUALIFICATIONS AND FITNESS OF APPLICANTS FOR REGIS- TRATION; (III) KEEP RECORDS OF ALL APPLICANTS APPROVED OR DENIED REGISTRATION; AND (IV) ADOPT SUCH RULES AND REGULATIONS NOT INCONSISTENT WITH THE PROVISIONS OF THIS SECTION, AS MAY BE NECESSARY WITH RESPECT TO THE FORM AND CONTENT OF APPLICATIONS FOR REGISTRATION, THE RECEPTION THEREOF, THE INVESTIGATION AND EXAMINATION OF APPLICANTS AND PROSPECTIVE APPLICANTS AS NEEDED, AND OTHER MATTERS INCIDENTAL OR APPROPRIATE TO THE POWERS AND DUTIES OF THE SECRETARY OF STATE AS PRESCRIBED BY THIS SECTION AND FOR THE PROPER ADMINISTRATION AND ENFORCEMENT OF THE PROVISIONS OF THIS SECTION. 3. REQUIREMENTS OF SALE. (A) ANY STATE-CHARTERED BANK UNDER THE SUPER- VISION OF THE DEPARTMENT OF FINANCIAL SERVICES MAY NOT CONSULT WITH, CONTRACT WITH, OR AFFILIATE ITSELF WITH ANY ATTORNEY, AGENT, BROKER OR MAINTENANCE COMPANY IN A TRANSACTION INVOLVING A REAL ESTATE OWNED PROP- ERTY UNLESS SUCH INDIVIDUAL OR BUSINESS IS ON THE LIST PRESCRIBED BY PARAGRAPH (A) OF SUBDIVISION TWO OF THIS SECTION. (B) STATE-CHARTERED BANKS UNDER THE SUPERVISION OF THE DEPARTMENT OF FINANCIAL SERVICES MUST SELECT AN ATTORNEY, AGENT, BROKER OR MAINTENANCE COMPANY DENOTED AS A MINORITY OR WOMEN-OWNED BUSINESS ENTERPRISE AND INCLUDED ON THE LIST PRESCRIBED BY PARAGRAPH (A) OF SUBDIVISION TWO OF THIS SECTION WHENEVER FEASIBLE IN TRANSACTIONS INVOLVING A REAL ESTATE OWNED PROPERTY. 4. PENALTIES. (A) EACH VIOLATION OF THIS ARTICLE BY ANY STATE-CHAR- TERED BANK UNDER THE SUPERVISION OF THE DEPARTMENT OF FINANCIAL SERVICES SHALL BE A VIOLATION SUBJECT TO A FINE OF NOT MORE THAN FIVE HUNDRED DOLLARS, UNLESS SUCH VIOLATION SHALL BE KNOWING AND WILLFUL, IN WHICH EVENT THE FINE IMPOSED SHALL BE ONE THOUSAND DOLLARS. (B) IF A STATE-CHARTERED BANK UNDER THE SUPERVISION OF THE DEPARTMENT OF FINANCIAL SERVICES HAS THREE OR MORE PREVIOUS CONVICTIONS IN A FIVE- YEAR PERIOD FOR VIOLATIONS OF THIS SECTION, SUCH CURRENT VIOLATION SHALL BE SUBJECT TO A FINE OF NOT LESS THAN ONE THOUSAND FIVE HUNDRED DOLLARS. S 2. This act shall take effect on the ninetieth day after it shall have become a law.
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