NY State Senate Bill 2021-S1599

Senate Bill S1599

2021-2022 Legislative Session

Imposes a temporary ban on the commencement of mortgage foreclosure actions and the sale of foreclosed properties

download bill text pdf

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

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
Jan 05, 2022	referred to housing, construction and community development
Jan 14, 2021	referred to housing, construction and community development

2021-S1599 (ACTIVE) - Details

See Assembly Version of this Bill:: A2456
Current Committee:: Senate Housing, Construction And Community Development
Law Section:: Real Property Actions and Proceedings Law
Laws Affected:: Add §1393, RPAP L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S8445, A10553
2023-2024: A4273

2021-S1599 (ACTIVE) - Summary

Imposes a temporary ban on the commencement of mortgage foreclosure actions and the sale of foreclosed properties for 365 days after the last region or county enters into phase 3 of the governor's reopening plan relating to the COVID-19 pandemic.

2021-S1599 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S1599

SPONSOR: SANDERS
 
TITLE OF BILL:

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 providing
for the repeal of such provisions upon expiration thereof

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill would provide relief to distressed residential or commercial
property owners by imposing a temporary ban on the commencement of mort-
gage foreclosure actions, on pending foreclosure actions and the sale of
foreclosed properties. During the moratorium, the lenders/servicers are
required to negotiate in good faith a modification or forbearance agree-
ments with the borrowers to resolve the default

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1: Provides for a temporary ban on the commencement of mortgage
foreclosure actions, proceeding with a pending foreclosure action or the
sale of foreclosed properties for the covered period beginning March 7,
2020 and ending 12 months from the date the last region/county of New
York State enters Phase 3 of the state's reopening plan.

Section 2 requires lenders/servicers to negotiate in good faith a
modification or forbearance to resolve the borrowers' default during the
moratorium, and establishes penalties for lenders or servicers who fails
to negotiate in good faith with the borrowers during the moratorium.

Section 3 sets the effective date.

 
JUSTIFICATION:

The federal government and New York State have declared emergencies over
the coronavirus (COVID-19) pandemic. This bill would provide relief to
distressed residential or commercial property owners by imposing a
temporary ban on the commencement of mortgage foreclosure actions,
proceeding with pending foreclosure actions or the sale of foreclosed
properties.

This bill also requires lenders or servicers to negotiate in good faith
a modification or forbearance to resolve the borrowers' default during
the moratorium to avoid the next foreclosure crisis from occurring in
this state and overburdening the courts. This bill was amended to mirror
the language contained in the Health and Economic Recovery Omnibus Emer-
gencies Solutions (HEROES) act, Division K, Title II entitled "Protect-
ing Renters and Homeowners from Evictions and Foreclosures" that was
passed by the House of Representatives on May 15, 2020.

 
PRIOR LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

None to the State.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall expire and be deemed
repealed one year after the covered period.

2021-S1599 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1599
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 14, 2021
                                ___________
 
 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 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD06026-01-1

 S. 1599                             2
 
 MORTGAGORS IN A PRE-FORECLOSURE WORKOUT TO NEGOTIATE  IN  GOOD  FAITH  A
 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 RULE 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.

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