NY State Senate Bill 2021-S7637

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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to housing, construction and community development

co-Sponsors

2021-S7637 (ACTIVE) - Details

See Assembly Version of this Bill:: A9076
Current Committee:: Senate Housing, Construction And Community Development
Law Section:: Real Property
Versions Introduced in 2023-2024 Legislative Session:: A1827

2021-S7637 (ACTIVE) - Summary

Requires a stay of certain foreclosure proceedings where the mortgagor has applied for coverage under the New York state homeowner assistance fund or any local program administering federal emergency mortgage assistance program funds; allows such foreclosure proceedings to proceed against a mortgagor who has caused significant damage to the property.

2021-S7637 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S7637

SPONSOR: MAY
 
TITLE OF BILL:

An act to stay certain foreclosure proceedings

 
PURPOSE:

To prevent foreclosure proceedings from being commenced until a determi-
nation of eligibility for the New York state homeowner assistance fund
or any local program administering federal funding for emergency mort-
gage assistance has been made if the mortgagor has applied for such
assistance.

 
SUMMARY OF PROVISIONS:

Section 1 prohibits the commencement of foreclosure proceedings for
non-payment of mortgage payments that would be eligible for mortgage
assistance funding if the mortgagor has applied for such assistance.  If
the mortgagor is approved, foreclosure proceedings may not be commenced,
if the mortgagor is determined to be ineligible, the foreclosure

proceedings may be filed and continue. If a mortgagor presents evidence
of a payment made from a mortgage assistance fund, such evidence creates
a presumption that the obligation for the time period covered by the
payment is fully satisfied.

Section 2 establishes that this bill does not apply when a mortgagor
causes significant property damage to the subject of the action, subject
to the following caveats. First petitioner must file an affidavit under
penalty of perjury that says that mortgagor intentionally caused such
damage and a specific description of the damages. Second, a previously
filed foreclosure proceeding did not claim significant property damage,
the petitioner must file a new petition with those allegations and the
petition must be served and filed according to article 13 of the Real
Property Actions and Proceedings Law. Third, a mere allegation of behav-
ior does not establish that the mortgagor intentionally caused such
damage.  Fourth, if the petitioner fails to establish that the mortgagor
intentionally caused significant damage, a pending foreclosure action
will be stayed, and a foreclosure action where the mortgagee has
accepted past-due payments and agreed not to foreclose on the property
will be dismissed with prejudice. Fifth, if the petitioner has estab-
lished that the mortgagor has intentionally caused significant damage to
the property, the action may continue according to RPAPL section 13.

Section 3 is the effective date.

 
JUSTIFICATION:

Matthew Desmond, acclaimed sociologist and Pulitzer Prize winning author
of Evicted: Poverty and Profit in the American City, has said that the
next housing crisis is upon us. He claimed that all it would take was
one monumental event, and we would be seeing that crisis in real time.
The COVID-19 pandemic has been that cataclysmic event; millions of
people lost their jobs two years ago, and as a result, Congress passed
aid packages to help homeowners and renters during the pandemic. The
state has received federal approval to distribute $539m for eligible New
York homeowners, but this program will take time to roll out and fully
catch up. In the meantime, mortgage payments are slated to start again
in January, leaving thousands of New York homeowners in difficult waters
to navigate during the coldest months of the year.

To prevent New Yorkers who have applied for aid or may be eligible for
aid from losing their homes, it is necessary to put a temporary stay on
foreclosure proceedings until either mortgage assistance has been
distributed to the homeowner, or a determination that the homeowner is
ineligible for the assistance has been made. As a result, it is imper-
ative that New York work to make sure that the legal system does not
work ahead of the distribution system for the mortgage assistance that
New Yorkers need and are qualified for.

This bill helps to slow a legal system that does not have any off-ramps
to slow foreclosure if a homeowner has applied for mortgage assistance.
By requiring a stay until a determination or distribution is made,
people will be allowed to keep their houses. However, such a stay may
not be applicable where the homeowner has intentionally caused signif-
icant damage to the property, and this bill provides those guard rails.

 
LEGISLATIVE HISTORY:

New bill

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
Immediately

2021-S7637 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7637
 
                             I N  S E N A T E
 
                              January 5, 2022
                                ___________
 
 Introduced  by  Sen.  MAY  --  read  twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN ACT to stay certain foreclosure proceedings
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. Except as provided in section two of this act,  foreclosure
 proceedings  for non-payment of mortgage payments that would be eligible
 for coverage under the New York state homeowner assistance fund adminis-
 tered by the division of housing and  community  renewal  shall  not  be
 commenced  against  a mortgagor who has applied for such coverage or any
 local  program  administering  federal  emergency  mortgage   assistance
 program  funds unless or until a determination of ineligibility is made.
 Except as provided in section two of this act, in any  pending  foreclo-
 sure proceeding, whether filed prior to, on, or after the effective date
 of this act, against a mortgagor who has applied or subsequently applies
 for  benefits  under the New York state homeowner assistance fund or any
 local  program  administering  federal  emergency  mortgage   assistance
 program  funds  to cover all or part of the arrears claimed by the peti-
 tioner, all proceedings shall  be  stayed  pending  a  determination  of
 eligibility.  Evidence  of  a  payment received pursuant to the New York
 state homeowner assistance fund or a local program administering federal
 emergency mortgage assistance program funds may  be  presented  in  such
 proceeding  and create a presumption that the mortgagor's obligation for
 the time period covered by the payment has been fully satisfied.
   § 2. Section one of this act shall not apply  if  a  mortgagor  inten-
 tionally  causes  significant damage to the property that is the subject
 of the mortgage agreement, provided:
   1. If a foreclosure proceeding is not pending on the effective date of
 this act, the petitioner shall file an affidavit under penalty of perju-
 ry with the petition attesting that the respondent intentionally  caused
 significant  damage  to the property, with a specific description of the
 damages alleged.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD14121-01-1

 S. 7637                             2
 
   2. If a foreclosure proceeding is pending on  the  effective  date  of
 this act, but the petitioner has not previously alleged that the mortga-
 gor  intentionally  caused significant damage to the property, the peti-
 tioner shall be required to submit a new petition with such  allegations
 and  comply with all notice and service requirements under article thir-
 teen of the real property actions and proceedings law.
   3. For the purposes of this act, a mere allegation of the behavior  by
 the  petitioner  or  an  agent  of the petitioner alleging such behavior
 shall not be sufficient evidence to establish  that  the  mortgagor  has
 intentionally caused significant damage to the property.
   4.  If  the  petitioner  fails  to establish that the mortgagor inten-
 tionally  caused  significant  damage  to  the  property:  (i)  if   the
 mortgagor's  application  is  still  pending,  the  court  shall stay or
 continue to stay any further  proceedings  pending  a  determination  of
 eligibility  pursuant to section one of this act; or (ii) if the mortga-
 gee has accepted payment of mortgage arrears and agreed not to foreclose
 the mortgage, the court shall dismiss the proceeding with prejudice.
   5. If the petitioner  establishes  that  the  mortgagor  intentionally
 caused  significant  damage to the property, the proceeding may continue
 pursuant  to  article  thirteen  of  the  real  property   actions   and
 proceedings law.
   § 3. This act shall take effect immediately.

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Senate Bill S7637

Sponsored By

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

co-Sponsors

2021-S7637 (ACTIVE) - Details

2021-S7637 (ACTIVE) - Summary

2021-S7637 (ACTIVE) - Sponsor Memo

2021-S7637 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S7637

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Sponsored By

Rachel May

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

co-Sponsors

Michelle Hinchey

2021-S7637 (ACTIVE) - Details

2021-S7637 (ACTIVE) - Summary

2021-S7637 (ACTIVE) - Sponsor Memo

2021-S7637 (ACTIVE) - Bill Text download pdf

Comments