Bill S317-2013

Prohibits mortgagee from refusing to accept partial mortgage payments

Prohibits mortgagee from refusing to accept partial mortgage payments.






TITLE OF BILL: An act to amend the real property law, in relation to prohibiting mortgagee from refusing to accept partial mortgage payments

PURPOSE: To require that banks, lenders and mortgagees accept partial mortgage payments which represent at a minimum a mortgage payment but not the total arrearages that may be due and owing.

SUMMARY OF PROVISIONS: Section 1. Amends the Real Property Tax law by adding a new section 254-e. Provides that no mortgagee shall refuse to accept partial payment on a mortgage which does not bring the mortgagor current on the mortgage debt.

Section 2. Effective Date


JUSTIFICATION: Due to the state of the economy, many people may find themselves in dire straits, due to loss of employment, under-employment, or illness. Despite these circumstances, many people are still attempting to pay their mortgage obligations and many may fall into arrears.

The banks, lenders or mortgagees have taken the position that they will only accept the total amount of the arrearages or if they do take a payment, they will not apply it to the outstanding indebtedness while placing it into a special account which gains interest; but neither the payment or interest is credited to the mortgagor's arrearages on their mortgage.

The provisions of this proposed section will allow payments to be received and credited and will not act as a bar to any procedural rights of the banks, lenders or mortgagees.

The aim of this bill is to forestall foreclosures and give mortgagors an incentive and opportunity to redeem their property; and limit the destructive effects of foreclosure and its concomitant societal concerns.

LEGISLATIVE HISTORY: 2012: S.6541 - Referred to Judiciary/A.8040 - Referred to Judiciary 2011: A.8040 - Referred to Banks, Reference changed to Judiciary


EFFECTIVE DATE: Takes effect on the thirtieth day after it shall become a law.


STATE OF NEW YORK ________________________________________________________________________ 317 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sen. DIAZ -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the real property law, in relation to prohibiting mort- gagee from refusing to accept partial mortgage payments THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property law is amended by adding a new section 254-e to read as follows: S 254-E. REFUSAL BY MORTGAGEE TO ACCEPT PARTIAL MORTGAGE PAYMENTS. 1. NO MORTGAGEE SHALL REFUSE TO ACCEPT A PARTIAL PAYMENT OF AN ENTIRE AMOUNT DUE FROM A MORTGAGOR WHICH DOES NOT BRING THE MORTGAGOR CURRENT ON HIS OR HER MORTGAGE DEBT. 2. THE PROVISIONS OF THIS SECTION SHALL NOT BAR ANY OTHER CONTRACTUAL OR STATUTORY RIGHTS OR REMEDIES AVAILABLE TO A MORTGAGOR. S 2. This act shall take effect on the thirtieth day after it shall have become a law.


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