S T A T E O F N E W Y O R K
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10553--B
I N A S S E M B L Y
May 29, 2020
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Introduced by COMMITTEE ON RULES -- (at request of M. of A. Hyndman) --
read once and referred to the Committee on Judiciary -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee -- again reported from said committee with amend-
ments, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the real property actions and proceedings law, in
relation to imposing a temporary ban on the commencement of mortgage
foreclosure actions and the sale of foreclosed properties; and provid-
ing for the repeal of such provisions upon expiration thereof
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 1393 to read as follows:
§ 1393. TEMPORARY BAN ON FORECLOSURE ACTIONS AND SALES OF FORECLOSED
PROPERTIES. 1. EXCEPT WITH RESPECT TO A VACANT OR ABANDONED PROPERTY,
STATE REGULATED SERVICERS, BANKS AND/OR CREDIT UNIONS OF A MORTGAGE LOAN
MAY NOT INITIATE ANY JUDICIAL PROCESS, MOVE FOR A FORECLOSURE JUDGMENT
OR EXECUTE A FORECLOSURE-RELATED EVICTION OR FORECLOSURE SALE OF REAL
PROPERTIES FOR TWELVE MONTHS AFTER THE DATE THAT THE COVERED PERIOD
ENDS.
2. (A) DURING SUCH MORATORIUM PERIOD, STATE REGULATED MORTGAGEES,
LENDERS OR SERVICERS ARE REQUIRED TO EITHER: (I) SEND THE BORROWER A
NOTICE OF DEFAULT IN ACCORDANCE WITH THE TERM OF THE MORTGAGE LOAN,
WHICH SHALL INCLUDE A LIST OF STATE CERTIFIED HOUSING COUNSELING AGEN-
CIES AND A LIST OF STATE FUNDED LEGAL SERVICES WHERE THE PROPERTY IS
LOCATED. THIS REQUIREMENT IS NOT A SUBSTITUTE FOR THE NOTICE REQUIRED
UNDER SECTION THIRTEEN HUNDRED FOUR OF THIS ARTICLE; (II) PARTICIPATE IN
THE MANDATORY SETTLEMENT CONFERENCE PURSUANT TO RULE THIRTY-FOUR HUNDRED
EIGHT OF THE CIVIL PRACTICE LAW AND RULES FOR ALL PENDING FORECLOSURE
ACTIONS INCLUDING ACTIONS WHERE THE MORTGAGOR APPEARED AT A PRIOR
SETTLEMENT CONFERENCE AND THE CASE WAS MARKED UNSETTLED. THIS REQUIRE-
MENT SHALL NOT APPLY TO PENDING FORECLOSURE ACTIONS WHERE A MORTGAGOR
HAS NOT APPEARED AT A PRIOR SETTLEMENT CONFERENCE; OR (III) ENGAGE THE
MORTGAGORS IN A PRE-FORECLOSURE WORKOUT TO NEGOTIATE IN GOOD FAITH A
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16379-06-0
A. 10553--B 2
MODIFICATION OR FORBEARANCE AGREEMENTS IN ACCORDANCE WITH RULE THIRTY-
FOUR HUNDRED EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
(B) THE MORTGAGORS MUST DEMONSTRATE COMPLIANCE WITH THIS REQUIREMENT
IN ORDER TO COMMENCE OR PROCEED WITH A FORECLOSURE ACTION AFTER THE
COVERED PERIOD HAS EXPIRED. FAILURE TO DEMONSTRATE COMPLIANCE SHALL BE
AN AFFIRMATIVE DEFENSE TO THE FORECLOSURE ACTION AND/OR THE BORROWER MAY
REQUEST A BAD FAITH HEARING FOR THE LENDER OR SERVICER NON-COMPLIANCE
WITH SECTION THIRTY-FOUR HUNDRED EIGHT OF THE CIVIL PRACTICE LAW AND
RULES. SHOULD THE COURT FIND THE LENDER OR SERVICER FAILED TO NEGOTIATE
A MODIFICATION OR FORBEARANCE AGREEMENT IN GOOD FAITH, THE COURT MAY
WAIVE ALL INTEREST ACCRUED ON THE LOAN DURING THE MORATORIUM.
3. FOR THE PURPOSES OF THIS SECTION, THE TERM "THE COVERED PERIOD"
SHALL MEAN FROM THE DATE THE GOVERNOR DECLARED A STATE OF DISASTER EMER-
GENCY OR MARCH SEVENTH, TWO THOUSAND TWENTY UNTIL THREE HUNDRED SIXTY-
FIVE DAYS AFTER THE DATE THE LAST REGION AND/OR COUNTY OF NEW YORK STATE
ENTERED PHASE THREE OF THE GOVERNOR'S REOPENING PLAN FOR THE STATE
RELATING TO THE COVID-19 PANDEMIC.
§ 2. This act shall take effect immediately and shall expire and be
deemed repealed 1 year after such effective date.