Relates to modifying delinquent mortgage loans and single point of contact.
TITLE OF BILL: An act to amend the banking law, in relation to modifying delinquent mortgage loans and single point of contact
PURPOSE OR GENERAL IDEA OF BILL:
The bill requires creditors to provide a single point of contact to borrowers in the foreclosure process who will be responsible for providing accurate account and other information related to the foreclosure process and loss mitigation efforts. The bill requires creditors to provide a dedicated electronic mail address, facsimile number and mailing address for borrowers to submit information requested as part of a loan modification, short sale or other loss mitigation option.
SUMMARY OF SPECIFIC PROVISIONS:
§ 96-e of the banking law provides that mortgage servicers, as defined in that section, shall designate a person responsible for communications if said borrower's mortgage becomes sixty days or more delinquent.
If a borrower who becomes delinquent by sixty days or more, a mortgage servicer shall designate a single point of contact for the borrower in the event he or she wishes to pursue a loan modification or foreclosure prevention program.
The single point of contact shall be responsible for all of the following:
(a) Communicating the options available to the borrower, the actions the borrower must take to be considered for those options and the status of the mortgage servicer's evaluation of the borrower for those options.
(b) Coordinating receipt of all documents associated with loan modification or loss mitigation activities and notifying the borrower of any missing documents.
(c) Maintaining and providing accurate information about the borrower's situation and current status in the loss mitigation process.
(d) Ensuring that a borrower, who is not eligible for a federal making home affordable program, is considered for proprietary or other investor loss mitigation options.
(e) Having access to individuals with the ability to stop foreclosure proceedings when necessary to comply with the making home affordable program or New York law.
The single point of contact shall remain assigned to the borrower's account until the mortgage services determines that all loss mitigation options have been exhausted, the borrower's account becomes current, or, in the case of a borrower in bankruptcy, the borrower has
exhausted all loss mitigation options for which the borrower is potentially eligible and has applied.
§ 2 provides that this act shall take effect immediately.
As our state and our nation slowly recover from the nation's financial crisis, many homeowners are still trying to recover from the financial impact of the crisis. Massive foreclosures have crippled our economy and have made the recovery from the crisis very slow. While the economy strengthens and employment grows, many citizens are trying to rebuild their lives.
One way many homeowners have tried to rebuild their lives is to work to save the largest asset many of them own: their home. As the bottom dropped out of the economy, many citizens lost their jobs and fell behind on their mortgages. Many people who had owned their homes for years or even decades found themselves unable to keep up with their payments even though they may have never missed a payment before the crisis.
As the job market has strengthened and people returned to work, homeowners have reached out to their mortgage servicers to determine if there are any federal, state or investor foreclosure mitigation program available to them. Many homeowners were told of these programs and were encouraged to apply. Many homeowners tried to apply for these mitigation programs only to find out that the programs were nearly impossible to gain approval.
On February 9, 2012, the U.S. Attorney General announced that the federal government and 49 states had reached a settlement agreement with the nation's five largest mortgage servicers to address mortgage servicing, foreclosure, and bankruptcy abuses (the "National Mortgage Settlement"). The National Mortgage Settlement is the largest consumer financial protection settlement in United States history. The National Mortgage Settlement was made after state and federal investigations into mortgage foreclosure activities revealed extensive mortgage servicing misconduct, including not limited to, deceptive practices in the loan modification process such as telling borrowers that a loan modification was imminent while simultaneously foreclosing, repeatedly asking for the same documents, denying a modification and not informing the borrowers and giving the borrower incorrect information regarding their modification application.
This bill will require a mortgagor to appoint to the borrower one contact person who will be responsible for all communications with the borrower and who will be responsible for the entire process. Having one person responsible will make it less likely that a borrower who is trying to save his or her home will fall victim to the bureaucracy of the foreclose mitigation process and of the very large mortgage servicers.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS FOR STATE & LOCAL.GOVERNMENTS:
This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 6243 IN SENATE (PREFILED) January 8, 2014 ___________Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend the banking law, in relation to modifying delinquent mortgage loans and single point of contact THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The banking law is amended by adding a new section 96-e to read as follows: S 96-E. SINGLE POINT OF CONTACT; MODIFYING DELINQUENT MORTGAGE LOANS. 1. FOR THE PURPOSES OF THIS SECTION, "MORTGAGE SERVICER" SHALL MEAN A PERSON OR ENTITY RESPONSIBLE FOR THE DAY TO DAY MANAGEMENT OF A MORTGAGE LOAN ACCOUNT, INCLUDING COLLECTING AND CREDITING PERIOD LOAN PAYMENTS, MANAGING ANY ESCROW ACCOUNT, OR ENFORCING MORTGAGE LOAN TERMS EITHER AS THE HOLDER OF THE LOAN NOTE OR ON BEHALF OF THE HOLDER OF THE LOAN NOTE. 2. IF A BORROWER IS SIXTY OR MORE DAYS DELINQUENT, THE MORTGAGE SERVI- CER SHALL INFORM THE BORROWER THAT IF THE BORROWER WISHES TO PURSUE A LOAN MODIFICATION OR OTHER FORECLOSURE PREVENTION ALTERNATIVE, THE MORT- GAGE SERVICER SHALL ESTABLISH A SINGLE POINT OF CONTACT FOR THE BORROW- ER. 3. UPON WRITTEN OR TELEPHONIC COMMUNICATION FROM A BORROWER WHO IS SIXTY OR MORE DAYS DELINQUENT AND WHO REQUESTS LOSS MITIGATION ASSIST- ANCE, THE IDENTITY OF AND CONTACT INFORMATION FOR A SINGLE POINT OF CONTACT SHALL BE PROVIDED TO THE BORROWER WITHIN TEN BUSINESS DAYS. THE MORTGAGE SERVICER SHALL PROVIDE UPDATED CONTACT INFORMATION TO THE BORROWER IF THE DESIGNATED SINGLE POINT OF CONTACT IS CHANGED NO LATER THAN FIVE BUSINESS DAYS AFTER THE CHANGE. 4. THE SINGLE POINT OF CONTACT SHALL BE RESPONSIBLE FOR ALL OF THE FOLLOWING: (A) COMMUNICATING THE OPTIONS AVAILABLE TO THE BORROWER, THE ACTIONS THE BORROWER MUST TAKE TO BE CONSIDERED FOR THOSE OPTIONS, AND THE STATUS OF THE MORTGAGE SERVICER'S EVALUATION OF THE BORROWER FOR THOSE OPTIONS.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13330-01-3 S. 6243 2
(B) COORDINATING RECEIPT OF ALL DOCUMENTS ASSOCIATED WITH LOAN MODIFI- CATION OR LOSS MITIGATION ACTIVITIES AND NOTIFYING THE BORROWER OF ANY MISSING DOCUMENTS. (C) MAINTAINING AND PROVIDING ACCURATE INFORMATION ABOUT THE BORROW- ER'S SITUATION AND CURRENT STATUS IN THE LOSS MITIGATION PROCESS. (D) ENSURING THAT A BORROWER, WHO IS NOT ELIGIBLE FOR A FEDERAL MAKING HOME AFFORDABLE PROGRAM, IS CONSIDERED FOR PROPRIETARY OR OTHER INVESTOR LOSS MITIGATION OPTIONS. (E) HAVING ACCESS TO INDIVIDUALS WITH THE ABILITY TO STOP FORECLOSURE PROCEEDINGS WHEN NECESSARY TO COMPLY WITH THE MAKING HOME AFFORDABLE PROGRAM OR NEW YORK LAW. 5. THE SINGLE POINT OF CONTACT SHALL REMAIN ASSIGNED TO THE BORROWER'S ACCOUNT UNTIL THE MORTGAGE SERVICER DETERMINES THAT ALL LOSS MITIGATION OPTIONS HAVE BEEN EXHAUSTED, THE BORROWER'S ACCOUNT BECOMES CURRENT, OR, IN THE CASE OF A BORROWER IN BANKRUPTCY, THE BORROWER HAS EXHAUSTED ALL LOSS MITIGATION OPTIONS FOR WHICH THE BORROWER IS POTENTIALLY ELIGI- BLE AND HAS APPLIED. S 2. This act shall take effect immediately.