senate Bill S6243

2013-2014 Legislative Session

Relates to modifying delinquent mortgage loans and single point of contact

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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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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to banks

Co-Sponsors

S6243 - Bill Details

Current Committee:
Law Section:
Banking Law
Laws Affected:
Add §96-e, Bank L

S6243 - Bill Texts

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Relates to modifying delinquent mortgage loans and single point of contact.

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BILL NUMBER:S6243

TITLE OF BILL: An act to amend the banking law, in relation to
modifying delinquent mortgage loans and single point of contact

PURPOSE OR GENERAL IDEA OF BILL:

The bill requires creditors to provide a single point of contact to
borrowers in the foreclosure process who will be responsible for
providing accurate account and other information related to the
foreclosure process and loss mitigation efforts. The bill requires
creditors to provide a dedicated electronic mail address, facsimile
number and mailing address for borrowers to submit information
requested as part of a loan modification, short sale or other loss
mitigation option.

SUMMARY OF SPECIFIC PROVISIONS:

§ 96-e of the banking law provides that mortgage servicers, as defined
in that section, shall designate a person responsible for
communications if said borrower's mortgage becomes sixty days or more
delinquent.

If a borrower who becomes delinquent by sixty days or more, a mortgage
servicer shall designate a single point of contact for the borrower in
the event he or she wishes to pursue a loan modification or
foreclosure prevention program.

The single point of contact shall be responsible for all of the
following:

(a) Communicating the options available to the borrower, the actions
the borrower must take to be considered for those options and the
status of the mortgage servicer's evaluation of the borrower for those
options.

(b) Coordinating receipt of all documents associated with loan
modification or loss mitigation activities and notifying the borrower
of any missing documents.

(c) Maintaining and providing accurate information about the
borrower's situation and current status in the loss mitigation
process.

(d) Ensuring that a borrower, who is not eligible for a federal making
home affordable program, is considered for proprietary or other
investor loss mitigation options.

(e) Having access to individuals with the ability to stop foreclosure
proceedings when necessary to comply with the making home affordable
program or New York law.

The single point of contact shall remain assigned to the borrower's
account until the mortgage services determines that all loss
mitigation options have been exhausted, the borrower's account becomes
current, or, in the case of a borrower in bankruptcy, the borrower has


exhausted all loss mitigation options for which the borrower is
potentially eligible and has applied.

§ 2 provides that this act shall take effect immediately.

JUSTIFICATION:

As our state and our nation slowly recover from the nation's financial
crisis, many homeowners are still trying to recover from the financial
impact of the crisis. Massive foreclosures have crippled our economy
and have made the recovery from the crisis very slow. While the
economy strengthens and employment grows, many citizens are trying to
rebuild their lives.

One way many homeowners have tried to rebuild their lives is to work
to save the largest asset many of them own: their home. As the bottom
dropped out of the economy, many citizens lost their jobs and fell
behind on their mortgages. Many people who had owned their homes for
years or even decades found themselves unable to keep up with their
payments even though they may have never missed a payment before the
crisis.

As the job market has strengthened and people returned to work,
homeowners have reached out to their mortgage servicers to determine
if there are any federal, state or investor foreclosure mitigation
program available to them. Many homeowners were told of these programs
and were encouraged to apply. Many homeowners tried to apply for these
mitigation programs only to find out that the programs were nearly
impossible to gain approval.

On February 9, 2012, the U.S. Attorney General announced that the
federal government and 49 states had reached a settlement agreement
with the nation's five largest mortgage servicers to address mortgage
servicing, foreclosure, and bankruptcy abuses (the "National Mortgage
Settlement"). The National Mortgage Settlement is the largest consumer
financial protection settlement in United States history. The
National Mortgage Settlement was made after state and federal
investigations into mortgage foreclosure activities revealed extensive
mortgage servicing misconduct, including not limited to, deceptive
practices in the loan modification process such as telling borrowers
that a loan modification was imminent while simultaneously
foreclosing, repeatedly asking for the same documents, denying a
modification and not informing the borrowers and giving the borrower
incorrect information regarding their modification application.

This bill will require a mortgagor to appoint to the borrower one
contact person who will be responsible for all communications with the
borrower and who will be responsible for the entire process. Having
one person responsible will make it less likely that a borrower who is
trying to save his or her home will fall victim to the bureaucracy of
the foreclose mitigation process and of the very large mortgage
servicers.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.


FISCAL IMPLICATIONS FOR STATE & LOCAL.GOVERNMENTS:

No cost.

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
________________________________________________________________________

                                  6243

                            I N  S E N A T E

                               (PREFILED)

                             January 8, 2014
                               ___________

Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

AN ACT to amend the banking law, in  relation  to  modifying  delinquent
  mortgage loans and single point of contact

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

  Section 1. The banking law is amended by adding a new section 96-e  to
read as follows:
  S  96-E. SINGLE POINT OF CONTACT; MODIFYING DELINQUENT MORTGAGE LOANS.
1. FOR THE PURPOSES OF THIS SECTION, "MORTGAGE SERVICER"  SHALL  MEAN  A
PERSON OR ENTITY RESPONSIBLE FOR THE DAY TO DAY MANAGEMENT OF A MORTGAGE
LOAN  ACCOUNT,  INCLUDING COLLECTING AND CREDITING PERIOD LOAN PAYMENTS,
MANAGING ANY ESCROW ACCOUNT, OR ENFORCING MORTGAGE LOAN TERMS EITHER  AS
THE HOLDER OF THE LOAN NOTE OR ON BEHALF OF THE HOLDER OF THE LOAN NOTE.
  2. IF A BORROWER IS SIXTY OR MORE DAYS DELINQUENT, THE MORTGAGE SERVI-
CER  SHALL  INFORM  THE BORROWER THAT IF THE BORROWER WISHES TO PURSUE A
LOAN MODIFICATION OR OTHER FORECLOSURE PREVENTION ALTERNATIVE, THE MORT-
GAGE SERVICER SHALL ESTABLISH A SINGLE POINT OF CONTACT FOR THE  BORROW-
ER.
  3.  UPON  WRITTEN  OR  TELEPHONIC COMMUNICATION FROM A BORROWER WHO IS
SIXTY OR MORE DAYS DELINQUENT AND WHO REQUESTS LOSS  MITIGATION  ASSIST-
ANCE,  THE  IDENTITY  OF  AND  CONTACT INFORMATION FOR A SINGLE POINT OF
CONTACT SHALL BE PROVIDED TO THE BORROWER WITHIN TEN BUSINESS DAYS.  THE
MORTGAGE  SERVICER  SHALL  PROVIDE  UPDATED  CONTACT  INFORMATION TO THE
BORROWER IF THE DESIGNATED SINGLE POINT OF CONTACT IS CHANGED  NO  LATER
THAN FIVE BUSINESS DAYS AFTER THE CHANGE.
  4.  THE  SINGLE  POINT  OF CONTACT SHALL BE RESPONSIBLE FOR ALL OF THE
FOLLOWING:
  (A) COMMUNICATING THE OPTIONS AVAILABLE TO THE BORROWER,  THE  ACTIONS
THE  BORROWER  MUST  TAKE  TO  BE  CONSIDERED FOR THOSE OPTIONS, AND THE
STATUS OF THE MORTGAGE SERVICER'S EVALUATION OF THE BORROWER  FOR  THOSE
OPTIONS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13330-01-3

S. 6243                             2

  (B) COORDINATING RECEIPT OF ALL DOCUMENTS ASSOCIATED WITH LOAN MODIFI-
CATION  OR  LOSS MITIGATION ACTIVITIES AND NOTIFYING THE BORROWER OF ANY
MISSING DOCUMENTS.
  (C)  MAINTAINING  AND PROVIDING ACCURATE INFORMATION ABOUT THE BORROW-
ER'S SITUATION AND CURRENT STATUS IN THE LOSS MITIGATION PROCESS.
  (D) ENSURING THAT A BORROWER, WHO IS NOT ELIGIBLE FOR A FEDERAL MAKING
HOME AFFORDABLE PROGRAM, IS CONSIDERED FOR PROPRIETARY OR OTHER INVESTOR
LOSS MITIGATION OPTIONS.
  (E) HAVING ACCESS TO INDIVIDUALS WITH THE ABILITY TO STOP  FORECLOSURE
PROCEEDINGS  WHEN  NECESSARY  TO  COMPLY WITH THE MAKING HOME AFFORDABLE
PROGRAM OR NEW YORK LAW.
  5. THE SINGLE POINT OF CONTACT SHALL REMAIN ASSIGNED TO THE BORROWER'S
ACCOUNT UNTIL THE MORTGAGE SERVICER DETERMINES THAT ALL LOSS  MITIGATION
OPTIONS  HAVE  BEEN  EXHAUSTED, THE BORROWER'S  ACCOUNT BECOMES CURRENT,
OR, IN THE CASE OF A BORROWER IN BANKRUPTCY, THE BORROWER HAS  EXHAUSTED
ALL LOSS MITIGATION OPTIONS FOR WHICH THE BORROWER IS POTENTIALLY ELIGI-
BLE AND HAS APPLIED.
  S 2. This act shall take effect immediately.

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