Requires the provision of notice to mortgagors in default for thirty days or more regarding assistance and the necessity of maintaining their residences.
TITLE OF BILL: An act to amend the real property actions and proceedings law, in relation to requiring the provision of notice to mortgagors in default for thirty days or more
PURPOSE: To require mortgagors in default be notified of their default in a timely manner, be provided with information of legal organizations available to provide assistance and be provided a reminder of the mortgagor's continuing responsibilities for the mortgages property.
SUMMARY OF SPECIFIC PROVISIONS:
Section one amends the real property actions and proceedings law by adding a new section 1304 - a to require that, when a mortgagor is in default for thirty days or more, the lender, assignee or mortgage loan servicer must send a notice to the mortgagor. The notification must be sent by registered or certified mail, no later than forty five (45) days after the mortgagor defaults. The notice will list the name and contact information for a legal service provider and a housing counselor approved by the New York State Attorney General and located in the same county as the mortgaged property, It also requires that the notice list the contact information for both the toll-free foreclosure helpline maintained by the New York State Attorney General and the toll-free helpline maintained by the New York State Department of Financial Services, Finally, the notification lists the responsibilities of a homeowner (i.e., upkeep, property taxes, utility bills).
JUSTIFICATION: This bill aims to reduce the incidence of foreclosure by providing sufficient notice of delinquency to property owners who have fallen behind on mortgages and helpful information of the many resources and services available to assist them through what can be a stressful, complicated and often confusing process.
While a mortgagor has options available to prevent foreclosure, including legal services, housing counselors, and two toll-free hotlines maintained by New York State, these services are most effective early in the process. By providing notice no later than forty five days after a mortgage goes into default, the bill seeks to address the situation before it is too late.
The notice provided for in this bill also includes the responsibilities that property owners have even though their property is in default. When faced with foreclosure, some simply abandon their property or erroneously assume that they are no longer responsible for a property in default, As a result, some properties are neglected and fall into disrepair. Sometimes completely abandoned, properties become blighted, dilapidated, and unsafe. They can house illegal drug operations, are a magnet for arsonists and can create death traps for firefighters and emergency responders. Furthermore, emergency demolitions of dangerous structures create a huge drain on local budgets. This bill seeks to avert these potential problems by ensuring that property owners are aware of their responsibilities, and continue to safely maintain them.
This bill complements the federal Dodd-Frank act, enacted in response to the national foreclosure crisis and which contains a similar notice provision. The federal regulations currently proposed require an oral notice of delinquency after thirty days, and written notice forty days after default. The second notice includes information about the foreclosure process, housing counselors, the mortgagor's state housing finance authority, and in some cases loss mitigation options that may be available,. The federal law does not include a description of a mortgagor's right and responsibilities, and does not take effect until January 10, 2014.
PRIOR LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: To be determined.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 3818 2013-2014 Regular Sessions IN SENATE February 21, 2013 ___________Introduced by Sen. KENNEDY -- read twice and ordered printed, and when printed to be committed to the Committee on Housing, Construction and Community Development AN ACT to amend the real property actions and proceedings law, in relation to requiring the provision of notice to mortgagors in default for thirty days or more THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property actions and proceedings law is amended by adding a new section 1304-a to read as follows: S 1304-A. NOTICE TO MORTGAGORS IN DEFAULT FOR THIRTY DAYS OR MORE. 1. WHEN A MORTGAGOR OF RESIDENTIAL REAL PROPERTY, INCLUDING OWNER-OCCUPIED ONE-TO-FOUR-FAMILY DWELLINGS, DEFAULTS ON SUCH MORTGAGE FOR THIRTY DAYS OR MORE, THE LENDER, ASSIGNEE OR MORTGAGE LOAN SERVICER SHALL PROVIDE NOTICE TO THE MORTGAGOR REGARDING INFORMATION AND ASSISTANCE ABOUT THE FORECLOSURE PROCESS IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION. 2. THE NOTICE REQUIRED BY THIS SECTION SHALL BE DELIVERED TO THE MORT- GAGOR BY REGISTERED OR CERTIFIED MAIL TO THE RESIDENCE WHICH IS THE SUBJECT OF THE MORTGAGE NO LATER THAN FORTY-FIVE DAYS AFTER THE MORTGA- GOR DEFAULTS ON HIS OR HER MORTGAGE. THE NOTICE REQUIRED BY THIS SECTION SHALL BE IN BOLD, FOURTEEN-POINT TYPE AND SHALL BE PRINTED ON COLORED PAPER THAT IS OTHER THAN THE COLOR OF ANY ADDITIONAL LETTER ACCOMPANYING THE NOTICE. THE TITLE OF THE NOTICE SHALL BE BOLD, TWENTY-POINT TYPE. THE NOTICE SHALL BE ON ITS OWN PAGE. 3. THE NOTICE SHALL LIST THE NAME AND CONTACT INFORMATION FOR NO LESS THAN ONE LEGAL SERVICE PROVIDER THAT IS APPROVED BY THE NEW YORK STATE ATTORNEY GENERAL THAT IS LOCATED WITHIN THE COUNTY WHERE SUCH MORTGAGED RESIDENTIAL REAL PROPERTY IS LOCATED. THE NOTICE SHALL LIST THE NAME AND CONTACT INFORMATION FOR NO LESS THAN ONE HOUSING COUNSELOR LOCATED WITH- IN THE COUNTY OF THE MORTGAGOR AND APPROVED BY THE NEW YORK STATE ATTOR- NEY GENERAL.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08050-02-3 S. 3818 2
4. THE NOTICE SHALL LIST CONTACT INFORMATION FOR THE TOLL-FREE FORE- CLOSURE HELPLINE MAINTAINED BY THE NEW YORK STATE ATTORNEY GENERAL AND THE TOLL-FREE HELPLINE MAINTAINED BY THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES. 5. THE NOTICE TO ANY MORTGAGOR REQUIRED BY THIS SECTION SHALL APPEAR AS FOLLOWS: "HELP FOR HOMEOWNERS IN DEFAULT ON A MORTGAGE FOR 30 DAYS OR MORE" "NEW YORK STATE LAW REQUIRES THAT WE SEND YOU THIS NOTICE ABOUT THE FORECLOSURE PROCESS. PLEASE READ IT CAREFULLY. YOU ARE CURRENTLY IN DEFAULT ON YOUR MORTGAGE FOR 30 DAYS OR MORE. THIS IS NOT A FORECLOSURE NOTICE. THERE MAY BE SEVERAL WAYS IN WHICH YOU CAN SAVE YOUR HOME. WE STRONGLY ENCOURAGE YOU TO CONTACT ONE OF THE HOUSING COUNSELORS OR LOCAL LEGAL SERVICE AGENCIES LISTED BELOW. THE CONTACT INFORMATION FOR THE TOLL-FREE HELPLINE MAINTAINED BY THE NEW YORK STATE ATTORNEY GENERAL AND THE TOLL-FREE HELPLINE MAINTAINED BY THE NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES ARE ALSO LISTED BELOW. YOU DO NOT NEED TO WAIT UNTIL YOUR HOME HAS BEEN FORECLOSED ON TO RECEIVE HELP. NUMEROUS PROGRAMS MAY BE AVAILABLE TO YOU RIGHT NOW. SOME MORTGAGE ASSISTANCE PROGRAMS HAVE STRICT TIME LIMITS. IF YOU WAIT TOO LONG, THEN YOU MAY BECOME INELIGIBLE FOR ASSISTANCE BY SOME OF THESE PROGRAMS. PROFESSIONAL HOUSING COUNSELORS AND ATTORNEYS MAY BE ABLE TO ASSIST YOU IN ACCESSING THESE PROGRAMS FREE OF CHARGE. YOU HAVE THE RIGHT TO REMAIN IN YOUR HOME UNTIL A FORECLOSURE SALE IS SCHEDULED AND YOUR HOUSE IS SOLD AT THE AUCTION. THIS PROCESS MAY TAKE UP TO SEVERAL YEARS. UNTIL SUCH TIME AS A JUDGMENT OF FORECLOSURE IS ENTERED BY A JUDGE AND THE HOUSE IS SOLD AT THE FORECLOSURE AUCTION, NO ONE MAY FORCE YOU TO LEAVE YOUR HOME. THIS INCLUDES THE LENDER THAT HOLDS YOUR MORTGAGE. UNTIL A JUDGMENT OF FORECLOSURE IS ENTERED, YOU ARE RESPONSIBLE FOR THE UPKEEP OF YOUR HOME. THIS INCLUDES PAYMENT OF WATER BILLS, PROPERTY TAXES (UNLESS THE LENDER IS PAYING SUCH TAXES), AND UPKEEP OF THE EXTE- RIOR. IF YOU CHOOSE TO LEAVE YOUR HOME BEFORE A JUDGMENT OF FORECLOSURE IS RENDERED, YOU ARE STILL RESPONSIBLE FOR THE UPKEEP OF THE HOME AND THE EXTERIOR, INCLUDING THE YARD. FAILURE TO MAINTAIN THE PROPERTY MAY RESULT IN ADDITIONAL COSTS ABOVE AND BEYOND THE FORECLOSURE PROCEEDINGS, AS WELL AS BUILDING CODE VIOLATIONS WHICH, IF NOT ADDRESSED, MAY LEAD TO AN ARREST WARRANT. LEGAL SERVICE PROVIDERS:...........(ENTER NAME AND CONTACT INFORMATION FOR PROVIDER). HOUSING COUNSELOR:..........(ENTER NAME AND CONTACT INFORMATION FOR HOUSING COUNSELOR). NEW YORK STATE ATTORNEY GENERAL'S TOLL-FREE HOTLINE........(ENTER NUMBER) OR VISIT THE ATTORNEY GENERAL'S WEBSITE AT.........(ENTER WEB ADDRESS) NEW YORK STATE DEPARTMENT OF FINANCIAL SERVICES' TOLL-FREE HOTLINE..........(ENTER NUMBER) OR VISIT THE DEPARTMENT'S WEBSITE AT..........(ENTER WEB ADDRESS)" 6. THE ATTORNEY GENERAL SHALL PRESCRIBE THE TELEPHONE NUMBER AND WEB ADDRESS TO BE INCLUDED IN THE NOTICE. 7. THE DEPARTMENT OF FINANCIAL SERVICES SHALL PRESCRIBE THE TELEPHONE NUMBER AND WEB ADDRESS TO BE INCLUDED IN THE NOTICE. S 2. This act shall take effect immediately.