senate Bill S7035

2013-2014 Legislative Session

Relates to prohibiting robosigned documents in foreclosure actions

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 (1)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Apr 21, 2014 referred to housing, construction and community development

S7035 - Bill Details

Current Committee:
Senate Housing, Construction And Community Development
Law Section:
Real Property Actions and Proceedings Law
Laws Affected:
Add ยง1392, RPAP L

S7035 - Bill Texts

view summary

Relates to prohibiting robosigned documents in foreclosure actions.

view sponsor memo
BILL NUMBER:S7035

TITLE OF BILL: An act to amend the real property actions and
proceedings law, in relation to foreclosure actions and robosigned
documents

PURPOSE:

Would provide that any entity which records a robosigned document or
files a robosigned document in any court, relative to a foreclosure
proceeding, is liable for a civil penalty of $10,000 per robosigned
document.

SUMMARY OF PROVISIONS:

Section 1392 of the real property law added to the Real Property law
as follows:

1. Sets forth the definition of a "robosigned document."

2. States that any entity that files a robosigned document in any
court relative to a foreclosure proceeding shall be subject to a civil
penalty of $10,000 per robosigned document.

3. Allows a borrower to seek an order in any court of competent
jurisdiction if the borrower reasonably believes that the foreclosing
party used robosigned documents.

4. Following a trustee's sale, a borrower may recover the greater of
actual damages or $10,000 plus attorney's fees if the foreclosing
party used robosigned documents.

5. A court may award the borrower the greater of $50,000 plus
attorney's fees or treble damages if the use of robosigned documents
was intentional.

6. A violation of this section shall not affect the validity of any
sale of the property without notice.

7. The borrower may not obtain relief under this section if the
violation was technical or de minimis.

8. It shall be an affirmative defense for a violation of this section
if the entity violating this section is a signatory to the settlement
between the attorney generals of several states including New York.

9. A third party encumbrancer shall not be relieved of liability under
this section that occurred prior to the sale of the property.

Section 2. This act shall take effect immediately.

JUSTIFICATION: As our nation makes its way through the foreclosure
crisis that has beset it for many years, the abuse of many banks and
mortgage servicers have come to light. One of the most egregious
abuses by the banks and mortgage servicers has been "robo-signing."


In a foreclosure preceding a bank or mortgage servicer must provide
documentation and affidavits to, among other things, prove that the
party actually owns the mortgage and that the owner is in default. As
the mortgage crisis expanded, banks and mortgage servicers routinely
used affidavits signed by employees who did not personally review the
documents. These employees also had no basis for believing that the
homeowner was in default or that the bank owned the loan.

While several banks have entered into agreements with several states'
attorneys general, many banks and mortgage servicers who have not
entered into a settlement have committed the same offense. This bill
will create a civil penalty for those banks and mortgage servicers.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: No cost but state may receive civil penalties.

EFFECTIVE DATE: This act shall take effect immediately.

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

                                  7035

                            I N  S E N A T E

                             April 21, 2014
                               ___________

Introduced  by  Sen. SANDERS -- 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 actions and robosigned documents

  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 1392 to read as follows:
  S  1392.  ROBOSIGNED  DOCUMENTS.  1.  FOR  THE PURPOSE OF THIS SECTION
"ROBOSIGNED DOCUMENT" SHALL MEAN  ANY  DOCUMENT  THAT  CONTAINS  FACTUAL
ASSERTIONS  THAT ARE NOT ACCURATE, ARE INCOMPLETE, OR ARE UNSUPPORTED BY
COMPETENT, RELIABLE EVIDENCE. A "ROBOSIGNED  DOCUMENT"  ALSO  MEANS  ANY
DOCUMENT  THAT  HAS  NOT BEEN REVIEWED BY ITS SIGNER TO SUBSTANTIATE THE
FACTUAL ASSERTIONS CONTAINED IN THE DOCUMENT. FOR PURPOSES OF THIS DEFI-
NITION, MULTIPLE PEOPLE MAY VERIFY THE DOCUMENT OR STATEMENT SO LONG  AS
THE  DOCUMENT OR STATEMENT SPECIFIES THE PORTIONS VERIFIED BY EACH SIGN-
ER.
  2. ANY ENTITY THAT RECORDS A ROBOSIGNED DOCUMENT OR FILES A ROBOSIGNED
DOCUMENT IN ANY COURT RELATIVE TO  A  FORECLOSURE  PROCEEDING  SHALL  BE
LIABLE  FOR A CIVIL PENALTY OF TEN THOUSAND DOLLARS PER ROBOSIGNED DOCU-
MENT. THE CIVIL PENALTIES UNDER  THIS  SECTION  ARE  SEPARATE  FROM  AND
EXCLUSIVE  OF  ANY  OTHER  REMEDIES  OR LIABILITIES THAT MAY APPLY. THIS
SECTION IS NOT INTENDED TO LIMIT THE TYPE  OF  ACTIONS  REGARDING  ROBO-
SIGNED DOCUMENTS THAT MAY BE FILED BY ANY GOVERNMENTAL ENTITY.
  3.  A  BORROWER  MAY SEEK AN ORDER IN ANY COURT HAVING JURISDICTION TO
ENJOIN ANY PENDING  TRUSTEE'S  SALE,  IF  A  NOTICE  OF  SALE  HAS  BEEN
RECORDED, AND THE BORROWER REASONABLY BELIEVES THAT THE MORTGAGEE, TRUS-
TEE, BENEFICIARY, OR AUTHORIZED AGENT FAILED TO COMPLY WITH THE REQUIRE-
MENTS  OF  THIS  SECTION.  A BORROWER WHO OBTAINS AN INJUNCTION SHALL BE
AWARDED REASONABLE ATTORNEY'S FEES AND COSTS.
  4. FOLLOWING A TRUSTEE'S SALE, A BORROWER MAY RECOVER THE  GREATER  OF
ACTUAL  DAMAGES  OR TEN THOUSAND DOLLARS PLUS REASONABLE ATTORNEY'S FEES
AND COSTS IN ANY  COURT  OF  COMPETENT  JURISDICTION,  IF  THE  BORROWER

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13334-01-3

S. 7035                             2

REASONABLY BELIEVES THAT THE MORTGAGEE, TRUSTEE, BENEFICIARY, OR AUTHOR-
IZED AGENT FAILED TO COMPLY WITH THE REQUIREMENTS OF THIS SECTION.
  5.  A  COURT MAY AWARD A BORROWER THE GREATER OF TREBLE ACTUAL DAMAGES
OR STATUTORY DAMAGES OF FIFTY THOUSAND DOLLARS, PLUS ATTORNEY'S FEES AND
COSTS, IF IT FINDS THAT THE VIOLATION OF THIS SECTION  WAS  INTENTIONAL,
RECKLESS,  OR  RESULTED FROM WILLFUL MISCONDUCT BY A MORTGAGEE, TRUSTEE,
BENEFICIARY, OR AUTHORIZED AGENT.
  6. A VIOLATION OF THIS ARTICLE SHALL NOT AFFECT THE VALIDITY OF A SALE
IN FAVOR OF A BONA FIDE PURCHASER AND ANY OF ITS ENCUMBRANCERS FOR VALUE
WITHOUT NOTICE.
  7. NOTWITHSTANDING SUBDIVISIONS THREE AND  FOUR  OF  THIS  SECTION,  A
BORROWER MAY NOT OBTAIN RELIEF UNDER THIS SECTION FOR ANY VIOLATION THAT
WAS TECHNICAL OR DE MINIMIS IN NATURE THAT DID NOT IMPACT THE BORROWER'S
ABILITY  TO  PURSUE  AN  ALTERNATIVE  TO FORECLOSURE AS PROVIDED BY THIS
ARTICLE.
  8. IT SHALL BE AN AFFIRMATIVE DEFENSE TO ANY LIABILITY  FOR  VIOLATION
OF  THIS  SECTION  THAT A SIGNATORY TO A CONSENT JUDGMENT ENTERED IN THE
CASE ENTITLED UNITED STATES OF AMERICA V. BANK OF  AMERICA  CORPORATION,
FILED  IN  THE  FEDERAL  DISTRICT  COURT FOR THE DISTRICT OF WASHINGTON,
D.C., CASE NUMBER 1:12-CV-00361 RMC, IS IN COMPLIANCE WITH THAT  CONSENT
JUDGMENT WHILE THE CONSENT JUDGMENT IS IN EFFECT.
  9.  A  THIRD-PARTY  ENCUMBRANCER  SHALL NOT BE RELIEVED FROM LIABILITY
RESULTING FROM A VIOLATION OF THIS SECTION COMMITTED BY THAT THIRD-PARTY
ENCUMBRANCER, THAT OCCURRED PRIOR TO THE SALE OF THE SUBJECT PROPERTY TO
THE BONA FIDE PURCHASER.
  S 2. This act shall take effect immediately.

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.