S T A T E O F N E W Y O R K
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6363
2025-2026 Regular Sessions
I N S E N A T E
March 11, 2025
___________
Introduced by Sen. BAILEY -- read twice and ordered printed, and when
printed to be committed to the Committee on Judiciary
AN ACT to amend the real property law and the real property actions and
proceedings law, in relation to discharge of a mortgage
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivisions 2 and 3 of section 275 of the real property
law, as added by chapter 748 of the laws of 1990, is amended to read as
follows:
2. (A) For purposes of this section, the full amount of principal and
interest due on a mortgage shall not be considered to be paid whenever
such mortgage continues to secure a bona fide debt and an enforceable
lien continues to exist, such as may occur in the following situations:
[(a)] (I) the commercial practice of lenders trading or selling mort-
gages on the secondary market;
[(b)] (II) the replacement of a construction loan with permanent
financing;
[(c)] (III) the refinancing of an existing loan with a new lender,
such as where the original lender assigns a note and the mortgage secur-
ing its payment to another lender in return for consideration and such
mortgage is consolidated with another mortgage which secures any funds
advanced by the new lender to the mortgagor;
[(d)] (IV) the modification of the terms of a loan by a mortgagor and
mortgagee in order to avoid foreclosure; and
[(e)] (V) a refinancing that occurs in conjunction with the sale of
property such that the seller conveys property to the purchaser subject
to the lien of the mortgage and the original lender assigns its note and
mortgage on the property to the purchaser's lender.
(B) NOTWITHSTANDING ANY PROVISION OF THIS SECTION TO THE CONTRARY, IF
PAYMENT IS RECEIVED AT THE LOCATION AND IN THE MANNER SPECIFIED BY THE
MORTGAGEE, THE MORTGAGEE MUST ACCEPT AND MAY NOT RETURN OR DESTROY ANY
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05468-01-5
S. 6363 2
PAYMENT RECEIVED IN RELIANCE ON A PAYOFF STATEMENT AND MUST PROMPTLY
APPLY SUCH PAYMENT TO THE UNPAID PRINCIPAL, INTEREST OR ANY OTHER
AMOUNTS DUE UNDER THE MORTGAGE.
3. Except with respect to the assignment of a mortgage in connection
with a transaction described in SUBPARAGRAPH (I) OF paragraph (a) of
subdivision two of this section, in order to record an assignment of a
mortgage there must be set forth in the assignment document or attached
thereto and recorded as part thereof a statement under oath signed by
the mortgagor or any other party to the transaction having knowledge of
the facts (provided such other party asserts such knowledge), that the
assignee is not acting as a nominee of the mortgagor and that the mort-
gage continues to secure a bona fide obligation. With respect to the
assignment of a mortgage in connection with a transaction described in
SUBPARAGRAPH (I) OF paragraph (a) of subdivision two of this section,
such assignment shall contain the following statement: "This assignment
is not subject to the requirements of section two hundred seventy-five
of the Real Property Law because it is an assignment within the second-
ary mortgage market."
§ 2. Subdivision 1 of section 1921 of the real property actions and
proceedings law, as amended by chapter 467 of the laws of 2005, is
amended to read as follows:
1. (A) After payment of authorized principal, interest and any other
amounts due thereunder or otherwise owed by law has actually been made,
and in the case of a credit line mortgage as defined in section two
hundred eighty-one of the real property law on written request, a mort-
gagee of real property situate in this state, unless otherwise requested
in writing by the mortgagor or the assignee of such mortgage, must
execute and acknowledge before a proper officer, in like manner as to
entitle a conveyance to be recorded, a satisfaction of mortgage, and
thereupon within thirty days arrange to have the satisfaction of mort-
gage: [(a)] (I) presented for recording to the recording officer of the
county where the mortgage is recorded, or [(b)] (II) if so requested by
the mortgagor or the mortgagor's designee, to the mortgagor or the
mortgagor's designee. Failure by a mortgagee to present a certificate of
discharge for recording shall result in the mortgagee being liable to
the mortgagor in the amount of five hundred dollars if [he or she] SUCH
MORTGAGEE fails to present such certificate within thirty days, shall
result in the mortgagee being liable to the mortgagor in the amount of
one thousand dollars if [he or she] SUCH MORTGAGEE fails to present a
certificate of discharge for recording within sixty days or shall result
in the mortgagee being liable to the mortgagor in the amount of one
thousand five hundred dollars if [he or she] SUCH MORTGAGEE fails to
present a certificate of discharge for recording within ninety days. For
the purposes of such liability under this subdivision, the term "mortga-
gee" shall not include a person, partnership, association, corporation
or other entity which makes less than five mortgage loans in any calen-
dar year. The mortgagee shall within forty-five days deliver the note
and the mortgage and where a title is registered under article twelve of
the real property law, the registration copy of the mortgage and any
registration certificates in the mortgagee's possession to the mortgagor
or the mortgagor's designee making such payment and request if required
as aforesaid. Delivery of a satisfaction of mortgage in accordance with
the terms of section two hundred seventy-five of the real property law
shall be deemed to satisfy the requirements of this section regarding
the satisfaction of mortgage.
S. 6363 3
(B) NOTWITHSTANDING ANY PROVISION OF THIS SECTION OR SECTION NINETEEN
HUNDRED TWENTY-ONE-A OF THIS ARTICLE TO THE CONTRARY, IF PAYMENT IS
RECEIVED AT THE LOCATION AND IN THE MANNER SPECIFIED BY THE MORTGAGEE,
THE MORTGAGEE MUST ACCEPT AND MAY NOT RETURN OR DESTROY ANY PAYMENT
RECEIVED IN RELIANCE ON A PAYOFF STATEMENT AND MUST PROMPTLY APPLY SUCH
PAYMENT TO THE UNPAID PRINCIPAL, INTEREST OR ANY OTHER AMOUNTS DUE UNDER
THE MORTGAGE.
§ 3. This act shall take effect immediately.