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This entry was published on 2022-06-03
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Notification Before Disposition of Collateral
Uniform Commercial Code (UCC) CHAPTER 38, ARTICLE 9, PART 6, SUBPART 1
Section 9--611. Notification Before Disposition of Collateral.

(a) "Notification date." In this section, "notification date" means
the earlier of the date on which:

(1) a secured party sends to the debtor and any secondary obligor

an authenticated notification of disposition; or

(2) the debtor and any secondary obligor waive the right to


(b) Notification of disposition required. Except as otherwise provided
in subsection (d), a secured party that disposes of collateral under
Section 9--610 shall send to the persons specified in subsection (c) a
reasonable authenticated notification of disposition.

(c) Persons to be notified. To comply with subsection (b), the secured
party shall send an authenticated notification of disposition to:

(1) the debtor;

(2) any secondary obligor; and

(3) if the collateral is other than consumer goods:

(A) any other person from which the secured party has

received, before the notification date, an authenticated

notification of a claim of an interest in the collateral;

(B) any other secured party or lienholder that, 10 days

before the notification date, held a security interest in

or other lien on the collateral perfected by the filing

of a financing statement that:

(i) identified the collateral;

(ii) was indexed under the debtor's name as of that date;


(iii) was filed in the office in which to file a

financing statement against the debtor covering the

collateral as of that date; and

(C) any other secured party that, 10 days before the

notification date, held a security interest in the

collateral perfected by compliance with a statute,

regulation, or treaty described in Section 9--311(a).

(d) Subsection (b) inapplicable: perishable collateral; recognized
market. Subsection (b) does not apply if the collateral is perishable or
threatens to decline speedily in value or is of a type customarily sold
on a recognized market.

(e) Compliance with subsection (c) (3) (B). A secured party complies
with the requirement for notification prescribed by subsection (c)
(3) (B) if:

(1) not later than twenty days or earlier than thirty days before

the notification date, the secured party requests, in a

commercially reasonable manner, information concerning

financing statements indexed under the debtor's name in the

office indicated in subsection (c) (3) (B); and

(2) before the notification date, the secured party:

(A) did not receive a response to the request for

information; or

(B) received a response to the request for information and

sent an authenticated notification of disposition to each

secured party or other lienholder named in that response

whose financing statement covered the collateral.

(f) Additional pre-disposition notice for cooperative interests.

(1) In addition to such other notification as may be required pursuant
to subsection (b) of this section and section 9-613 of this article, a
secured party whose collateral consists of a residential cooperative
interest used by the debtor and whose security interest in such
collateral secures an obligation incurred in connection with financing
or refinancing of the acquisition of such cooperative interest and who
proposes to dispose of such collateral after a default with respect to
such obligation, shall send to the debtor, not less than ninety days
prior to the date of the disposition of the cooperative interest, an
additional pre-disposition notice as provided herein.

(1-a) Notwithstanding any other provision of law, with regard to a
reverse cooperative apartment unit loan, at least forty-five days before
a secured party, as defined under Section 9-102(a)(73), or its agent
takes any steps to dispose of its collateral, as provided for in Section
9-610, the secured party or its agent shall give notice to the borrower,
and separate notice to the borrower's designated third-party if one has
been designated in at least fourteen-point type except for the heading
which shall be in at least sixteen-point type. The notice shall include
the following:


Borrower's address
Loan Number:
Property Address:
Dear Borrower(s) {or heirs of Debtor?}:
As of ___________, your reverse cooperative apartment unit loan is in
default. Under New York State Law, we are required to send you this
notice to inform you that you may be at risk of losing your home.
Your reverse loan is in default because you have not complied with the
following conditions of your loan:
_____ You are not occupying your cooperative apartment unit as your
primary residence
_____ You did not submit the required annual certificate of occupancy
_____ The named borrower on the reverse loan has died
_____ You did not pay maintenance on your unit to the cooperative
corporation, and {servicer} paid your maintenance for you on the
following date(s) in the following
_____ You did not make required repairs to your unit
If the claim is based on your failure to pay maintenance to the
cooperative corporation, you can cure this default by making the payment
of $____________ for the advances we made towards these payments on your
You have the right to dispute the claims listed above by contacting us,
by calling ___________ or sending a letter to __________________. This
may include proof of payments made for water and sewer charges or a
current declaration page from your insurance company, or any other proof
to dispute the servicer's claim.
If you are in default for failure to pay maintenance, you may qualify
for a re-payment plan to cure the default balance owed.
Attached to this notice is a list of New York approved housing
counseling agencies and legal services in your area which provide free
counseling. A statewide listing by county is also available at
profit_housing_counseling_agencies. You may also call your local
Department of Aging for a referral or call 311 if you live in New York
Qualified free help is available; watch out for companies or people who
charge a fee for these services.
You may also contact {SERVICER} directly at __________ and ask to
discuss all possible options to allow you to cure your default and
prevent the foreclosure of your home. While we cannot ensure that a
resolution is possible, we encourage you to take immediate steps to try
to achieve a resolution. The longer you wait, the fewer options you may
If you have not taken any actions to resolve this matter within ninety
days from the date this notice was mailed, we will have the right to
take your cooperative shares from you.
If you need further information, please call the New York State
Department of Financial Services' toll-free helpline at 877-226-5697 or
visit the Department's website at http://www.dfs.ny.gov.
IMPORTANT: You have the right to remain in your unit until you receive a
court order telling you to leave the property. If a foreclosure action
is filed against you in court, you still have the right to remain in the
unit until a court orders you to leave. You legally remain the owner of
your cooperative shares and are responsible for the unit until the
shares are transferred to a new owner through a sale. However, there
will be no court proceeding before the shares are transferred to a new
owner. After the shares are transferred, the new owner may begin a court
proceeding to evict you from the unit.
This notice is not an eviction notice.

(2) The notice required by this subsection shall be in bold,
fourteen-point type and shall be printed on colored paper that is other
than the color of the notice required by subsection (b) of this section,
and the title of the notice shall be in bold, twenty-point type. The
notice shall be on its own page.

(3) The notice required by this subsection shall appear as follows:

Help for Homeowners at Risk of Foreclosure
New York State Law requires that we send you this information about the
foreclosure process. Please read it carefully.

You are in danger of losing your home. You are in default of your
obligations under the loan secured by your rights to your cooperative
apartment. It is important that you take action, if you wish to avoid
losing your home.
Sources of Information and Assistance

The State encourages you to become informed about your options, by
seeking assistance from an attorney, a legal aid office, or a government
agency or non-profit organization that provides counseling with respect
to home foreclosures.

To locate a housing counselor near you, you may call the toll-free
helpline maintained by the New York State Department of Financial
Services at (enter number) or visit the Department's
website at (enter web address).
One of these persons or organizations may be able to help you, including
trying to work with your lender to modify the loan to make it more
Foreclosure rescue scams

Be careful of people who approach you with offers to "save" your home.
There are individuals who watch for notices of foreclosure actions or
collateral sales in order to unfairly profit from a homeowner's
distress. You should be extremely careful about any such promises and
any suggestions that you pay them a fee or sign any papers that transfer
rights of any kind to your cooperative apartment. State law requires
anyone offering such services for profit to enter into a contract which
fully describes the services they will perform and fees they will
charge, and which prohibits them from taking any money from you until
they have completed all such promised services.

(4) The department of financial services shall prescribe the telephone
number and web address to be included in the notice.

(5) The department of financial services shall post on its website or
otherwise make readily available the name and contact information of
government agencies or non-profit organizations that may be contacted
for information about the foreclosure process, including maintaining a
toll-free helpline to disseminate the information required by this