More New York Mortgage Foreclosure Legislation

On Monday November 16 Governor Patterson and Legislative Leaders jointly announced the passage of Program Bill No. 46 to significantly expand the scope of the mortgage foreclosure legislation enacted in 2008 that pertained to subprime loans.

Also known as S66007/and A40007, the legislation has not yet formally been submitted to the Governor for his signature and assignment of a Chapter Number. However, the delay appears merely procedural rather than over any substantive issue.

You may access the Bill’s status, text, a brief summary and the Sponsors’ Memos (which contain a longer summary) at http://public.leginfo.state.ny.us/menugetf.cgi . ( note, in some instances you may be required to insert the Bill Number in the second box for Legislative Information, IE, either S66007 or A40007 and then adjust the year in the next box to 2009 before hitting “Search” )

Here are some of the major points covered by the legislation

• Requires the 90-day foreclosure notice currently sent for subprime loans to be expanded to include all home loans. This measure allows additional time for many more homeowners to work with their lender to try to find an affordable solution to prevent unnecessary foreclosures.

• Requires lenders who serve a 90-day notice on a homeowner to within three days of that service make a regulatory filing with the Banking Department with specified information. This regulatory filing will allow the Banking Department and the Division of Housing and Community Renewal (DHCR) to provide targeted assistance to distressed homeowners during the critical pre-foreclosure timeframe and closely monitor foreclosure statistics.

• Expands the scope of early mandatory settlement conferences to include borrowers of all home loans and not just borrowers with subprime loans.

• Establishes protections for tenants in foreclosed properties by requiring that they receive written notification of the change in ownership of the property and be permitted to remain in their home for the remainder of their lease term or 90 days, whichever is longer.

• Requires plaintiffs in a foreclosure action who obtain a judgment of foreclosure and sale to maintain the foreclosed property.

• Prevents brokers who perform distressed property consulting services from accepting upfront fees.

Hat tip to Harry Meyer of the Real Property Law Section for this post

The legislation had the support of New Yorkers for Responsible Lending, a state-wide coalition of 149 non-profit groups http://www.nedap.org/programs/nyrl.html

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