NY State Senate Bill 2019-S5017A

Senate Bill S5017A

Signed By Governor

2019-2020 Legislative Session

Relates to the obligations of banks and financial institutions during the sale of a mortgage subject to an application for modification

download bill text pdf

Archive: Last Bill Status Via A92 - Signed by Governor

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Aug 14, 2019	signed chap.166
Aug 13, 2019	delivered to governor
Jun 20, 2019	returned to assembly passed senate 3rd reading cal.1819 substituted for s5017a
Jun 20, 2019	substituted by a92a ordered to third reading cal.1819 committee discharged and committed to rules
May 23, 2019	print number 5017a
May 23, 2019	amend (t) and recommit to banks
Apr 03, 2019	referred to banks

Votes

- Jun 20, 2019 - Floor Vote
  A92
  
  62
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jun 20, 2019
      
      aye (62)
      
      Addabbo Jr.
      
      Akshar
      
      Amedore
      
      Antonacci
      
      Bailey
      
      Benjamin
      
      Biaggi
      
      Boyle
      
      Breslin
      
      Brooks
      
      Carlucci
      
      Comrie
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hoylman-Sigal
      
      Jackson
      
      Jacobs
      
      Jordan
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      LaValle
      
      Lanza
      
      Little
      
      Liu
      
      Martinez
      
      May
      
      Mayer
      
      Metzger
      
      Montgomery
      
      Myrie
      
      O'Mara
      
      Ortt
      
      Parker
      
      Persaud
      
      Ramos
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Salazar
      
      Sanders Jr.
      
      Savino
      
      Sepúlveda
      
      Serino
      
      Serrano
      
      Seward
      
      Skoufis
      
      Stavisky
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
  Jun 20, 2019 - Rules Committee Vote
  S5017A
  
  17
  
  Aye
  
  1
  
  Nay
  
  1
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 20, 2019
      
      aye (17)
      
      Benjamin
      
      Breslin
      
      Comrie
      
      Flanagan
      
      Gianaris
      
      Hoylman-Sigal
      
      Kennedy
      
      Krueger
      
      LaValle
      
      Lanza
      
      Liu
      
      Martinez
      
      Parker
      
      Robach
      
      Savino
      
      Seward
      
      Stewart-Cousins
      
      nay (1)
      
      Little
      
      aye wr (1)
      
      Griffo

Bill Amendments

Original

A (Active)

2019-S5017 - Details

See Assembly Version of this Bill:: A92
Law Section:: Banking Law
Laws Affected:: Add §6-n, Bank L
Versions Introduced in Other Legislative Sessions:: 2011-2012: A7954
2013-2014: S5496, A4784
2015-2016: S2752, A6391
2017-2018: S2223, A722

2019-S5017 - Summary

Requires a bank or financial institution selling or transferring a mortgage during a modification process to provide the borrower with a written list of all documents relating to such application for modification that were provided to the bank or financial institution to which such mortgage was sold or transferred; and relates to the obligations of subsequent mortgage servicer shall assume all duties and obligations related to any previously approved first lien loan modification or other foreclosure prevention alternative.

2019-S5017 - Sponsor Memo

                                
 
BILL NUMBER: S5017

SPONSOR: PARKER
 
TITLE OF BILL:  An act to amend the banking law, in relation to
requiring banks and financial institutions entering into negotiations to
modify a mortgage on real property located in this state to be responsi-
ble for the continuation of the modification process until its
completion regardless of whether the mortgage is sold

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill will amend the banking law to require that a bank or financial
institution entering into negotiation to modify a mortgage shall be
responsible for the continuation of the modification process until its
completion.

 
SUMMARY OF SPECIFIC PROVISIONS:

This bill amends the banking law by adding a new section 6-n to require
that a bank or financial institution entering into negotiations to modi-
fy a mortgage on real property in this state shall be responsible for

the continuation of the modification process until its completion
regardless of whether the mortgage is sold, transferred or bundled into
a security package for provision to a third party during the modifica-
tion process.

Additionally, if a mortgage is in the process of negotiation or applica-
tion for modification of the mortgage terms and is sold, transferred or
bundled into a security package for provision to a third party during
the modification process, such mortgage shall be automatically deemed to
have been modified and the purchaser of such mortgage must accept any
decision rendered and be bound by the terms of the modification agree-
ment, including the interest rate in effect at the time of processing.
The purchaser also assumes ail rights and responsibilities necessary to
comply with this modified loan.

 
JUSTIFICATION:

This legislation is necessary in light of the growing loan modification
crisis sweeping across New York State. It will helm stabilize the hous-
ing industry and provide much needed protection for homeowners. The
modification process is difficult enough, so we must provide a mechanism
to ensure that banks and financial institutions deal with homeowners in
a fair and equitable manner during the course of this grueling process.

In many instances, homeowners have complained of having sent documenta-
tion, as requested and later being told that such documents were missing
or not received or that certain page(s) had not been signed, contrary to
the homeowner's assertions.  Additionally, many homeowners complained of
having been notified that their loan had been sold to another lender,
while the modification was pending, yet they were notified after the
fact.

This legislation will address situations such as these by requiring that
negotiations to modify a mortgage will continue to its completion,
whether it is sold, transferred or bundled for provision to a third
party. Furthermore, this mortgage will be deemed to have been modified
as specified in the modification application and the purchaser of said
mortgage is determined to have accepted the interest rate in effect at
the time of processing and all other rights and responsibilities accom-
panying the loan as modified.

 
PRIOR LEGISLATIVE HISTORY:

2017-18: S2223 - REFERRED TO BANKS
2015-16: S.2752 - Referred to Banks
2013-14: S.5496 - Referred to Banks
2011-2012: A.7954

 
FISCAL IMPLICATIONS:

NONE.

 
EFFECTIVE DATE:
The act shall take effect on the ninetieth day after it shall have
become a law.

2019-S5017 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5017
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               April 3, 2019
                                ___________
 
 Introduced  by  Sen.  PARKER -- 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  requiring  banks  and
   financial institutions entering into negotiations to modify a mortgage
   on  real  property  located  in  this  state to be responsible for the
   continuation of the modification process until its completion  regard-
   less of whether the mortgage is sold
 
   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  6-n  to
 read as follows:
   §  6-N.  RESPONSIBILITY  OF  BANKS  FOR  MORTGAGES BEING PROCESSED FOR
 MODIFICATION. 1. NOTWITHSTANDING ANY PROVISIONS OF LAW TO THE  CONTRARY,
 ANY  BANK OR FINANCIAL INSTITUTION ENTERING INTO NEGOTIATIONS, INCLUDING
 BUT NOT LIMITED TO PROCESSING AN APPLICATION, TO MODIFY  A  MORTGAGE  ON
 REAL PROPERTY LOCATED IN THIS STATE SHALL BE RESPONSIBLE FOR THE CONTIN-
 UATION  OF  THE  MODIFICATION PROCESS UNTIL ITS COMPLETION REGARDLESS OF
 WHETHER THE MORTGAGE IS SOLD, TRANSFERRED OR  BUNDLED  INTO  A  SECURITY
 PACKAGE FOR PROVISION TO A THIRD PARTY DURING THE MODIFICATION PROCESS.
   2.  IF  A  MORTGAGE THAT IS THE SUBJECT OF NEGOTIATIONS OR APPLICATION
 FOR A MODIFICATION OF THE MORTGAGE TERMS IS SOLD, TRANSFERRED OR BUNDLED
 INTO A SECURITY PACKAGE FOR  PROVISION  TO  A  THIRD  PARTY  DURING  THE
 MODIFICATION  PROCESS,  SUCH  MORTGAGE  SHALL BE AUTOMATICALLY DEEMED TO
 HAVE BEEN MODIFIED AS SPECIFIED IN THE MORTGAGE MODIFICATION APPLICATION
 AND THE PURCHASER OF SUCH MORTGAGE MUST  ACCEPT  ANY  DECISION  RENDERED
 WITH  REGARD  TO  SUCH  MODIFICATION  AND  BE  BOUND BY THE TERMS OF THE
 MODIFICATION AGREEMENT, INCLUDING THE INTEREST RATE  IN  EFFECT  AT  THE
 TIME  OF PROCESSING. THE PURCHASER SHALL ASSUME ALL RIGHTS AND RESPONSI-
 BILITIES NECESSARY TO COMPLY WITH THE MODIFIED LOAN.
   3. THE PROVISIONS OF THIS SECTION SHALL APPLY  TO  ANY  MORTGAGE  LOAN
 WHICH IS THREE MONTHS OR OLDER AT THE TIME OF THE MODIFICATION PROCESS.
   §  2.  This  act shall take effect on the ninetieth day after it shall
 have become a law.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05248-01-9

2019-S5017A (ACTIVE) - Details

See Assembly Version of this Bill:: A92
Law Section:: Banking Law
Laws Affected:: Add §6-n, Bank L
Versions Introduced in Other Legislative Sessions:: 2011-2012: A7954
2013-2014: S5496, A4784
2015-2016: S2752, A6391
2017-2018: S2223, A722

2019-S5017A (ACTIVE) - Summary

2019-S5017A (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S5017A

SPONSOR: PARKER
 
TITLE OF BILL:  An act to amend the banking law, in relation to
requiring a bank or financial institution selling or transferring a
mortgage during a modification process to provide the borrower with a
written list of all documents relating to such application for modifica-
tion that were provided to the bank or financial institution to which
such mortgage was sold or transferred; and relating to the obligations
of subsequent mortgage servicer shall assume all duties and obligations
related to any previously approved first lien loan modification or other
foreclosure prevention alternative

 
PURPOSE:

To provide homeowners who are in negotiations to modify the terms of
their mortgage with a written list of documents relating to the modifi-
cation which were provided to the bank or financial institution who
acquired the loan when was sold or transferred and to ensure that if the
loan is sold or transferred after a homeowner has been approved for a
modification of their mortgage that the subsequent mortgage servicer
honor the terms and conditions of the approval.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section one of the bill adds § 6-n to the banking law. Subdivision one
requires that a bank or financial institution who enters into negoti-
ations to modify a mortgage and sells or transfers the mortgage during
the modification process be responsible for providing the borrower with
a written list of all the documents relating to the loan modification
that were furnished to the bank of financial institution to which the
mortgage was sold or transferred.

Subdivision two provides that if a borrower has been approved in writing
for a first lien loan modification or other modification to avoid fore-
closure and the servicing of the borrower's loan is sold or transferred
to another mortgage servicer that the subsequent mortgage servicer be
required to assume all duties and obligations related to any previously
approved first lien loan modification or other foreclosure alternative.

Section two of the bill provides the effective date.

 
JUSTIFICATION:

This legislation is necessary in light of the growing loan modification
crisis enveloping New York State. The modification process is difficult
enough, so New York State must provide a mechanism to ensure that banks
and financial institutions treat homeowners in a fair and equitable
manner during the course of this difficult process.

In many instances, homeowners have complained of having sent requested
documentation and later being told that the same documents were not
received or that specific pages were unsigned by the homeowners.  Home-
owners report that this problem is exasperated when their loan is sold
to another lender during the course of a pending modification.

This legislation seeks to assist homeowners whose mortgage has been sold
or transferred while they are in the midst of a loan modification by
requiring that when negotiations to modify a mortgage take place and the
loan is sold, transferred, or bundled for provision to a third party
that the bank or financial institution that sold or transferred the
mortgage provide the homeowner a written list of documents that were
provided to the third party. Furthermore, if the homeowner has been
approved for a loan modification in writing and the loan is subsequently
sold or transferred, the bank or financial institution to which the
mortgage has been sold or transferred to will be required to honor the
terms and conditions of the approved loan modification.

 
PRIOR LEGISLATIVE HISTORY:

2017-18: S2223 - REFERRED TO BANKS

2015-16: S.2752 - Referred to Banks

2013-14: S.5496 - Referred to Banks

 
FISCAL IMPLICATIONS::

None.

 
EFFECTIVE DATE::

Ninety days after becoming a law.

2019-S5017A (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  5017--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                               April 3, 2019
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be  committed  to  the  Committee  on  Banks  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN  ACT  to  amend  the  banking law, in relation to requiring a bank or
   financial institution selling or  transferring  a  mortgage  during  a
   modification  process  to  provide the borrower with a written list of
   all documents relating to such application for modification that  were
   provided  to  the bank or financial institution to which such mortgage
   was sold or transferred; and relating to the obligations of subsequent
   mortgage servicer shall assume all duties and obligations  related  to
   any previously approved first lien loan modification or other foreclo-
   sure prevention alternative
 
   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  6-n  to
 read as follows:
   §  6-N.  RESPONSIBILITY  OF  BANKS  FOR  MORTGAGES BEING PROCESSED FOR
 MODIFICATION. 1. IF A MORTGAGE THAT IS THE SUBJECT OF AN APPLICATION FOR
 A MODIFICATION OF THE MORTGAGE TERMS IS SOLD OR TRANSFERRED  DURING  THE
 MODIFICATION  PROCESS,  THE  BANK  OR  FINANCIAL  INSTITUTION SELLING OR
 TRANSFERRING SUCH MORTGAGE SHALL PROVIDE THE  BORROWER  WITH  A  WRITTEN
 LIST OF ALL DOCUMENTS RELATING TO SUCH APPLICATION FOR MODIFICATION THAT
 WERE  PROVIDED  TO THE BANK OR FINANCIAL INSTITUTION TO WHICH SUCH MORT-
 GAGE WAS SOLD OR TRANSFERRED.
   2. IF A BORROWER HAS BEEN APPROVED IN WRITING FOR A  FIRST  LIEN  LOAN
 MODIFICATION OR OTHER MODIFICATION TO AVOID FORECLOSURE, AND THE SERVIC-
 ING  OF  SUCH BORROWER'S LOAN IS TRANSFERRED OR SOLD TO ANOTHER MORTGAGE
 SERVICER, THE SUBSEQUENT MORTGAGE SERVICER SHALL ASSUME ALL  DUTIES  AND
 OBLIGATIONS RELATED TO ANY PREVIOUSLY APPROVED FIRST LIEN LOAN MODIFICA-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05248-06-9

 S. 5017--A                          2
 
 TION  OR OTHER FORECLOSURE PREVENTION ALTERNATIVE IN ACCORDANCE WITH THE
 PROVISIONS OF THIS SECTION.
   §  2.  This  act shall take effect on the ninetieth day after it shall
 have become a law and shall apply to all mortgages entered  into  on  or
 after such date.

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