Requires a plaintiff in a mortgage foreclosure action to maintain the subject property in good faith.
TITLE OF BILL: An act to amend the real property actions and proceedings law, in relation to requiring a plaintiff in a mortgage foreclosure action to maintain the subject property in good faith
To require plaintiffs in mortgage foreclosure actions to Act in good faith at the commencement of a foreclosure action and throughout the foreclosure process.
SUMMARY OF PROVISIONS:
Section 1307 of the real property, actions and proceedings law is amended to require plaintiffs from the commencement of foreclosure proceedings to obtain a mortgage foreclosure in 'good faith' and defines 'good faith' as honesty in fact and the observance of reasonable standards of fair dealing.
Due to New York State's struggling financial situation a financial crisis emerged causing citizens to fall behind on their mortgages and in many instances leave or abandon their homes. In some instances the foreclosing institution will commence the process but not follow through or delay taking control of the property which in some instances can cause the property to become unmaintained and blighted in the surrounding neighborhoods. This law would obligate mortgage foreclosure plaintiffs to act in good faith when it commences a foreclosure and throughout the foreclosure process. Financial institutions cannot delay in taking action in controlling and providing upkeep on the vacant dwelling itself.
Immediately after the bill has become law.
STATE OF NEW YORK ________________________________________________________________________ 4277 2013-2014 Regular Sessions IN SENATE March 19, 2013 ___________Introduced by Sen. GALLIVAN -- 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 a plaintiff in a mortgage foreclosure action to maintain the subject property in good faith THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Subdivision 1 of section 1307 of the real property actions and proceedings law, as added by chapter 507 of the laws of 2009, is amended to read as follows: 1. A plaintiff
[in]WHO COMMENCES a mortgage foreclosure action [who obtains], INCLUDING A LENDER, AN ASSIGNEE OR A MORTGAGE LOAN SERVICER, SEEKING a judgment of foreclosure and sale pursuant to section thirteen hundred fifty-one of this article, involving residential real property, as defined in section thirteen hundred five of this article, that is vacant, or becomes vacant after COMMENCEMENT OF THE ACTION OR the issu- ance of such judgment, or is abandoned by the mortgagor but occupied by a tenant, as defined under section thirteen hundred five of this arti- cle, shall IN GOOD FAITH maintain such property until such time as ownership has been transferred through the closing of title in foreclo- sure, or other disposition, and the deed for such property has been duly recorded; provided, however, that if a municipality or governmental entity holds a mortgage subordinate to one or more mortgages on the residential real property, the municipality or governmental entity shall not be subject to the requirements of this section. AS USED IN THIS SECTION, THE TERM "GOOD FAITH" SHALL BE DEFINED AS HONESTY IN FACT AND THE OBSERVANCE OF REASONABLE STANDARDS OF FAIR DEALING. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01068-05-3