Senate Bill S5931

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5931--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 18, 2009
                               ___________

Introduced  by  Sen. KLEIN -- (at request of the Governor) -- read twice
  and ordered printed, and when printed to be committed to the Committee
  on Rules -- committee discharged, bill amended, ordered  reprinted  as
  amended and recommitted to said committee

AN ACT to amend the real property actions and proceedings law, the civil
  practice law and rules, the banking law and chapter 472 of the laws of
  2008  amending the real property actions and proceedings law and other
  laws relating to  foreclosure  actions  on  home  mortgage  loans,  in
  relation  to  home mortgage loans; to amend the penal law, in relation
  to the crime of mortgage fraud; and to amend the real property law, in
  relation to assignments of mortgages and distressed property  consult-
  ing contracts; and providing for the repeal of certain provisions upon
  expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions 1, 2 and 5 of section 1304 of the real proper-
ty actions and proceedings law, as added by chapter 472 of the  laws  of
2008, are amended to read as follows:
  1. Notwithstanding any other provision of law, with regard to a [high-
cost]  home loan[, as such term is defined in section six-l of the bank-
ing law, a subprime home loan  or  a  non-traditional  home  loan]  MADE
BEFORE  SEPTEMBER FIRST, TWO THOUSAND EIGHT, at least ninety days before
a lender, AN ASSIGNEE or a mortgage loan servicer commences legal action
against the borrower, including mortgage foreclosure, [the] SUCH lender,
ASSIGNEE or mortgage loan servicer shall give notice to the borrower  in
at least fourteen-point type which shall include the following:
          "YOU COULD LOSE YOUR HOME. PLEASE READ THE FOLLOWING
                            NOTICE CAREFULLY"
  "As  of  ___,  your  home  loan is ___ days in default. Under New York
State Law, we are required to send you this notice to  inform  you  that

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
S                                                          LBD12043-11-9

              

S. 5931--A                          2

you are at risk of losing your home. You can cure this default by making
the payment of _____ dollars by ____.
  If  you  are  experiencing  financial difficulty, you should know that
there are several options available to you that may help you  keep  your
home.   Attached to this notice is a list of government approved housing
counseling agencies in your area which provide  free  or  very  low-cost
counseling.  You  should consider contacting one of these agencies imme-
diately. These agencies specialize in helping homeowners who are  facing
financial difficulty. Housing counselors can help you assess your finan-
cial  condition and work with us to explore the possibility of modifying
your loan, establishing an easier payment plan for you, or even  working
out  a  period of loan forbearance. If you wish, you may also contact us
directly at __________ and ask to discuss possible options.
  While we cannot assure that a mutually agreeable resolution is  possi-
ble, we encourage you to take immediate steps to try to achieve a resol-
ution.  The longer you wait, the fewer options you may have.
  If  this  matter  is  not  resolved  within 90 days from the date this
notice was mailed, we may commence legal action against you  (or  sooner
if you cease to live in the dwelling as your primary residence.)
  If  you need further information, please call the New York State Bank-
ing Department's toll-free helpline at  1-877-BANK-NYS  (1-877-226-5697)
or visit the Department's website at http://www.banking.state.ny.us"
  2.  Such  notice shall be sent by [the] SUCH lender, ASSIGNEE or mort-
gage loan servicer to the borrower, by registered or certified mail  and
also  by first-class mail to the last known address of the borrower, and
if different, to the residence [which] THAT is the subject of the  mort-
gage.    SUCH  NOTICE  SHALL BE SENT BY THE LENDER, ASSIGNEE OR MORTGAGE
LOAN SERVICER IN A SEPARATE ENVELOPE FROM ANY OTHER MAILING  OR  NOTICE.
Notice is considered given as of the date it is mailed. The notice shall
contain a list of at least five [United States department of housing and
urban  development approved housing counseling agencies, or other] hous-
ing counseling agencies as designated by the  division  of  housing  and
community renewal, that serve the region where the borrower resides. The
list  shall  include  the  counseling agencies' last known addresses and
telephone numbers. The banking department [and/or] AND the  division  of
housing  and  community renewal shall make available ON THEIR RESPECTIVE
WEBSITES a listing, by region,  of  such  agencies  [which  the].    THE
lender,  ASSIGNEE  or  mortgage  loan servicer [may] SHALL use EITHER OF
THESE LISTS to meet the requirements of this section.
  5. (a) ["Annual percentage rate" means the annual percentage rate  for
the loan calculated according to the provisions of the Federal Truth-in-
Lending Act (15 U.S.C. S 1601, et seq.), and the regulations promulgated
thereunder by the federal reserve board (as said act and regulations are
amended from time to time).
  (b)]  "Home  loan"  means  a [home] loan, including an open-end credit
plan, other than a reverse mortgage transaction, in which:
  (i) [The principal amount of the loan at origination  did  not  exceed
the  conforming  loan  size  that was in existence at the time of origi-
nation for a comparable dwelling as established by the federal  national
mortgage association;
  (ii)] The borrower is a natural person;
  [(iii)]  (II)  The  debt  is  incurred  by  the borrower primarily for
personal, family, or household purposes;
  [(iv)] (III) The loan is secured by a mortgage or  deed  of  trust  on
real  estate  [upon  which  there is located or there is to be located a
structure or structures intended principally for occupancy of  from  one

S. 5931--A                          3

to  four  families  which  is or will be occupied by the borrower as the
borrower's principal dwelling] IMPROVED BY A ONE TO FOUR  FAMILY  DWELL-
ING,  OR  A  CONDOMINIUM  UNIT,  OR BY ANY CERTIFICATE OF STOCK OR OTHER
EVIDENCE  OF  OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A CORPORATION,
PARTNERSHIP OR OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNER-
SHIP OF REAL ESTATE, IN EITHER CASE, USED OR OCCUPIED, OR INTENDED TO BE
USED OR OCCUPIED WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE  OF  ONE  OR
MORE  PERSONS  AND  WHICH  IS OR WILL BE OCCUPIED BY THE BORROWER AS THE
BORROWER'S PRINCIPAL DWELLING; and
  [(v)] (IV) The property is located in this state.
  [(c) "Subprime home loan" for the purposes of this  section,  means  a
home  loan  consummated  between  January  first, two thousand three and
September first, two thousand eight in  which  the  terms  of  the  loan
exceed  the threshold as defined in paragraph (d) of this subdivision. A
subprime home  loan  excludes  a  transaction  to  finance  the  initial
construction  of a dwelling, a temporary or "bridge" loan with a term of
twelve months or less, such as a loan to purchase a new  dwelling  where
the borrower plans to sell a current dwelling within twelve months, or a
home equity line of credit.
  (d)  "Threshold"  means,  for  a  first lien mortgage loan, the annual
percentage rate of the home loan  at  consummation  of  the  transaction
exceeds  three  percentage  points over the yield on treasury securities
having comparable periods of maturity to the loan maturity  measured  as
of  the fifteenth day of the month in which the loan was consummated; or
for a subordinate mortgage lien, the annual percentage rate of the  home
loan  at consummation of the transaction equals or exceeds five percent-
age points over the yield on treasury securities having comparable peri-
ods of maturity on the fifteenth day of the month in which the loan  was
consummated;  as  determined by the following rules: if the terms of the
home loan offer any initial  or  introductory  period,  and  the  annual
percentage rate is less than that which will apply after the end of such
initial  or  introductory  period,  then the annual percentage rate that
shall be taken into account for purposes of this section  shall  be  the
rate which applies after the initial or introductory period.
  (e) "Non-traditional home loan" shall mean a payment option adjustable
rate  mortgage  or  an  interest  only  loan consummated between January
first, two thousand three and September first, two thousand eight.
  (f) For purposes of determining the threshold, the banking  department
shall  publish  on its website a listing of constant maturity yields for
U.S. Treasury securities for each month between January first, two thou-
sand three and September first, two thousand eight, as published in  the
Federal Reserve Statistical Release on selected interest rates, commonly
referred  to  as  the  H.15 release, in the following maturities, to the
extent available in such release: six month, one year, two  year,  three
year, five year, seven year, ten year, thirty year.
  (g)]  (B) "Lender" means a mortgage banker as defined in paragraph (f)
of subdivision one of section five hundred ninety of the banking law  or
an exempt organization as defined in paragraph (e) of subdivision one of
section five hundred ninety of the banking law.
  S  2.  The  real  property  actions  and proceedings law is amended by
adding a new section 1305 to read as follows:
  S 1305. NOTICE TO TENANTS. 1. DEFINITIONS. FOR THE  PURPOSES  OF  THIS
SECTION, THE FOLLOWING DEFINITIONS SHALL APPLY:
  (A)  "RESIDENTIAL  REAL  PROPERTY" SHALL MEAN REAL PROPERTY LOCATED IN
THIS STATE IMPROVED BY ANY BUILDING OR STRUCTURE THAT IS OR MAY BE USED,
IN WHOLE OR IN PART, AS THE HOME OR RESIDENCE OF ONE  OR  MORE  PERSONS,

S. 5931--A                          4

AND  SHALL  INCLUDE  ANY BUILDING OR STRUCTURE USED FOR BOTH RESIDENTIAL
AND COMMERCIAL PURPOSES.
  (B)  "SUCCESSOR  IN  INTEREST"  SHALL MEAN ANY PERSON OR ENTITY WHO OR
WHICH ACQUIRES TITLE IN A RESIDENTIAL REAL PROPERTY PURSUANT TO A  JUDG-
MENT  OF  SALE, OR OTHER DISPOSITION DURING THE PENDENCY OF THE FORECLO-
SURE PROCEEDING, OR AT ANY TIME THEREAFTER BUT PRIOR TO  THE  EXPIRATION
OF THE TIME PERIOD AS PROVIDED FOR IN SUBDIVISION TWO OF THIS SECTION.
  (C)  "TENANT"  SHALL  MEAN ANY PERSON WHO AT THE TIME OF A JUDGMENT OF
SALE, OR OTHER DISPOSITION  DURING  THE  PENDENCY  OF  THE  FORECLOSURE,
APPEARS  AS A LESSEE ON A LEASE OF ONE OR MORE DWELLING UNITS OF A RESI-
DENTIAL REAL PROPERTY THAT IS SUBORDINATE TO THE MORTGAGE ON SUCH  RESI-
DENTIAL  REAL  PROPERTY;  OR WHO IS A PARTY TO AN ORAL OR IMPLIED RENTAL
AGREEMENT WITH THE MORTGAGOR AND OBLIGATED TO PAY RENT TO THE  MORTGAGOR
OR  SUCH  MORTGAGOR'S REPRESENTATIVE, FOR THE USE OR OCCUPANCY OF ONE OR
MORE DWELLING UNITS OF A RESIDENTIAL REAL PROPERTY.
  2. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A TENANT SHALL HAVE THE
RIGHT TO REMAIN IN OCCUPANCY OF THE SUBJECT  RESIDENTIAL  REAL  PROPERTY
FOR  THE  REMAINDER  OF  THE  LEASE  TERM IN EFFECT, PROVIDED SUCH LEASE
REQUIRES THE RECEIPT OF RENT THAT IS NOT  SUBSTANTIALLY  LESS  THAN  THE
FAIR  MARKET RENT FOR THE PROPERTY WITH THE EXCEPTION OF TENANCIES WHICH
ARE SUBSIDIZED BY THE FEDERAL GOVERNMENT, THIS STATE  OR  ANY  POLITICAL
SUBDIVISION  OF  THIS STATE OR WHOSE TENANCY IS SUBJECT TO RENT CONTROL,
RENT STABILIZATION OR FEDERAL STATUTORY SCHEMES,  OR  FOR  A  PERIOD  OF
NINETY  DAYS  FROM  THE  DATE  OF  THE MAILING OF THE NOTICE REQUIRED BY
SUBDIVISION THREE OF THIS SECTION, WHICHEVER IS  GREATER,  ON  THE  SAME
TERMS  AND  CONDITIONS  AS WERE IN EFFECT AT THE TIME OF ISSUANCE OF THE
JUDGEMENT OF SALE, OR IF NO SUCH JUDGMENT WAS ISSUED, UPON THE TERMS AND
CONDITIONS AS WERE IN EFFECT AT THE TIME OF  TRANSFER  OF  OWNERSHIP  OF
SUCH PROPERTY.
  3. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, A SUCCESSOR IN INTEREST
OF  RESIDENTIAL  REAL  PROPERTY  SHALL  PROVIDE  WRITTEN  NOTICE  TO ALL
TENANTS: (A) THAT THEY ARE ENTITLED TO REMAIN IN OCCUPANCY OF SUCH PROP-
ERTY FOR THE REMAINDER OF THE LEASE TERM, OR A  PERIOD  OF  NINETY  DAYS
FROM  THE  DATE  OF MAILING OF SUCH NOTICE, WHICHEVER IS GREATER, ON THE
SAME TERMS AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF  ISSUANCE  OF
THE  JUDGMENT OF SALE, OR IF NO SUCH JUDGMENT WAS ISSUED, UPON THE TERMS
AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF TRANSFER OF OWNERSHIP OF
SUCH PROPERTY; AND (B) OF THE NAME AND ADDRESS OF  THE  NEW  OWNER.  ANY
PERSON  OR ENTITY WHO OR WHICH BECOMES A SUCCESSOR IN INTEREST AFTER THE
ISSUANCE OF THE NINETY-DAY NOTICE  PROVIDED  FOR  IN  THIS  SUBDIVISION,
SHALL  NOTIFY  ALL TENANTS OF ITS NAME AND ADDRESS AND SHALL ASSUME SUCH
INTEREST SUBJECT TO THE RIGHT OF THE TENANT TO  MAINTAIN  POSSESSION  AS
PROVIDED IN THIS SUBDIVISION.
  4. ACCEPTANCE OF RENTAL PAYMENTS BY ANY SUCCESSOR IN INTEREST ON TERMS
PROVIDED IN SUBDIVISION THREE OF THIS SECTION SHALL NOT AFFECT THE RIGHT
OF  THE  SUCCESSOR IN INTEREST TO EVICT SUCH TENANT, AS PROVIDED BY LAW,
UPON THE EXPIRATION OF THE TIME PERIOD AS PROVIDED IN SUBDIVISION TWO OF
THIS SECTION OR EARLIER IF THE TENANT DOES NOT PAY RENT PURSUANT TO  ANY
LEASE OR ORAL OR IMPLIED RENTAL AGREEMENT IN EFFECT AT THE TIME OF ISSU-
ANCE  OF THE JUDGMENT OF FORECLOSURE, OR IF NO SUCH JUDGMENT WAS ISSUED,
UPON THE TERMS AND CONDITIONS AS WERE IN EFFECT AT THE TIME OF  TRANSFER
OF OWNERSHIP OF SUCH PROPERTY.
  5.  THE  RIGHTS  CONFERRED  UPON  A  TENANT BY SUBDIVISION TWO OF THIS
SECTION SHALL BE IN ADDITION TO ANY OTHER RIGHTS OF SUCH  TENANT,  UNDER
LAW, INCLUDING THOSE RIGHTS CONFERRED UPON:  (A) ANY TENANT NOT NAMED IN
THE FORECLOSURE ACTION; OR (B) ANY TENANT WHOSE TENANCY IS SUBSIDIZED BY

S. 5931--A                          5

THE  FEDERAL GOVERNMENT, THIS STATE OR ANY POLITICAL SUBDIVISION OF THIS
STATE; OR (C) ANY TENANT WHOSE TENANCY IS SUBJECT TO RENT CONTROL,  RENT
STABILIZATION, OR FEDERAL STATUTORY SCHEMES.
  S  3.  The  real  property  actions  and proceedings law is amended by
adding a new section 1306 to read as follows:
  S 1306. REGULATORY FILING. 1.  EACH LENDER, ASSIGNEE OR MORTGAGE  LOAN
SERVICER  SHALL  FILE  WITH THE SUPERINTENDENT OF BANKS (SUPERINTENDENT)
WITHIN THREE BUSINESS DAYS OF THE MAILING  OF  THE  NOTICE  REQUIRED  BY
SUBDIVISION  ONE  OF  SECTION  THIRTEEN HUNDRED FOUR OF THIS ARTICLE THE
INFORMATION REQUIRED BY SUBDIVISION TWO OF THIS SECTION.   NOTWITHSTAND-
ING  ANY OTHER PROVISION OF THE LAWS OF THIS STATE, THIS FILING SHALL BE
MADE ELECTRONICALLY  AS  PROVIDED  FOR  IN  SUBDIVISION  THREE  OF  THIS
SECTION.    ANY  COMPLAINT  SERVED IN A PROCEEDING INITIATED PURSUANT TO
THIS ARTICLE SHALL CONTAIN, AS A CONDITION PRECEDENT TO SUCH PROCEEDING,
AN AFFIRMATIVE ALLEGATION THAT AT THE TIME THE PROCEEDING IS  COMMENCED,
THE PLAINTIFF HAS COMPLIED WITH THE PROVISIONS OF THIS SECTION.
  2.  EACH  FILING DELIVERED TO THE SUPERINTENDENT SHALL BE ON SUCH FORM
AS THE SUPERINTENDENT SHALL PRESCRIBE, AND SHALL INCLUDE AT  A  MINIMUM,
THE  NAME, ADDRESS, LAST KNOWN TELEPHONE NUMBER OF THE BORROWER, AND THE
AMOUNT CLAIMED AS DUE AND OWING ON THE MORTGAGE, AND SUCH INFORMATION AS
WILL ENABLE THE SUPERINTENDENT TO ASCERTAIN THE TYPE OF LOAN  AT  ISSUE.
THE  SUPERINTENDENT MAY SUBSEQUENTLY REQUEST SUCH FURTHER INFORMATION AS
MAY BE REASONABLY NECESSARY  TO  FACILITATE  A  REVIEW  OF  WHETHER  THE
BORROWER  MIGHT  BENEFIT FROM COUNSELING OR OTHER FORECLOSURE PREVENTION
SERVICES.
  3. WITHIN ONE HUNDRED EIGHTY DAYS OF THE EFFECTIVE DATE OF THIS SUBDI-
VISION, OR SUCH LATER TIME AS  THE  SUPERINTENDENT  MAY  DETERMINE,  THE
SUPERINTENDENT  SHALL DEVELOP WITH THE ASSISTANCE OF THE COMMISSIONER OF
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL,  AN  ELECTRONIC  DATABASE
THAT SHALL BE CAPABLE OF RECEIVING ALL FILINGS REQUIRED BY THIS SECTION.
  4.  THE  INFORMATION  PROVIDED  TO THE SUPERINTENDENT PURSUANT TO THIS
SUBDIVISION SHALL NOT BE SUBJECT TO ARTICLE SIX OF THE  PUBLIC  OFFICERS
LAW OR PARAGRAPHS (A), (C) AND (D) OF SUBDIVISION ONE OR SUBDIVISION SIX
OF SECTION NINETY-FOUR OF THE PUBLIC OFFICERS LAW.  ALL SUCH INFORMATION
SHALL  BE  USED  BY  THE  SUPERINTENDENT EXCLUSIVELY FOR THE PURPOSES OF
MONITORING ON A STATEWIDE BASIS THE EXTENT OF FORECLOSURE FILINGS WITHIN
THIS STATE, TO PERFORM AN ANALYSIS OF LOAN TYPES WHICH WERE THE  SUBJECT
OF A PRE-FORCLOSURE NOTICE AND DIRECTING AS APPROPRIATE AVAILABLE PUBLIC
AND  PRIVATE FORECLOSURE PREVENTION AND COUNSELING SERVICES TO BORROWERS
AT  RISK  OF  FORECLOSURE.  THE  SUPERINTENDENT  MAY  SHARE  INFORMATION
CONTAINED IN THE DATABASE WITH HOUSING COUNSELING AGENCIES DESIGNATED BY
THE  DIVISION  OF  HOUSING  AND  COMMUNITY RENEWAL AS WELL AS WITH OTHER
STATE AGENCIES WITH JURISDICTION OVER HOUSING, FOR THE PURPOSE OF  COOR-
DINATING OR SECURING HELP FOR BORROWERS AT RISK OF FORECLOSURE.
  5.  THE  SUPERINTENDENT  IS HEREBY AUTHORIZED TO PROMULGATE SUCH RULES
AND REGULATIONS AS SHALL BE NECESSARY TO IMPLEMENT THE PURPOSES OF  THIS
SECTION.
  S  4.  The  real  property  actions  and proceedings law is amended by
adding a new section 1307 to read as follows:
  S 1307. DUTY TO MAINTAIN FORECLOSED PROPERTY.  1.  A  PLAINTIFF  IN  A
FORECLOSURE ACTION WHO OBTAINS A JUDGMENT OF FORECLOSURE AND SALE PURSU-
ANT  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 THE ISSUANCE OF
SUCH  JUDGMENT,  OR  IS  OCCUPIED  BY A TENANT, AS DEFINED UNDER SECTION
THIRTEEN HUNDRED FIVE OF THIS  ARTICLE,  SHALL  MAINTAIN  SUCH  PROPERTY

S. 5931--A                          6

UNTIL SUCH TIME AS OWNERSHIP HAS BEEN TRANSFERRED THROUGH THE CLOSING OF
TITLE  IN FORECLOSURE, OR OTHER DISPOSITION, AND THE DEED FOR SUCH PROP-
ERTY HAS BEEN DULY RECORDED.
  2.  SUCH  PLAINTIFF  SHALL HAVE THE RIGHT TO PEACEABLY ENTER UPON SUCH
PROPERTY, OR TO CAUSE OTHERS TO PEACEABLY ENTER UPON  THE  PROPERTY  FOR
THE  LIMITED PURPOSE OF INSPECTIONS, REPAIRS AND MAINTENANCE AS REQUIRED
BY THIS SECTION, OR AS OTHERWISE ORDERED BY  COURT;  PROVIDED,  HOWEVER,
THAT IF THE PROPERTY IS OCCUPIED BY A TENANT, AT LEAST SEVEN DAYS NOTICE
MUST  BE  GIVEN TO SUCH TENANT, UNLESS EMERGENCY REPAIRS ARE REQUIRED IN
WHICH CASE REASONABLE NOTICE SHALL BE PROVIDED TO THE TENANT.
  3. THE  MUNICIPALITY  IN  WHICH  SUCH  RESIDENTIAL  REAL  PROPERTY  IS
LOCATED, ANY TENANT LAWFULLY IN POSSESSION, AND A BOARD OF MANAGERS OF A
CONDOMINIUM  IN  WHICH  THE PREMISES ARE LOCATED OR A HOMEOWNERS ASSOCI-
ATION IF SAID PREMISES ARE SUBJECT TO THE RULES AND REGULATIONS OF  SUCH
AN  ASSOCIATION,  SHALL  HAVE  THE  RIGHT  TO  ENFORCE  THE  OBLIGATIONS
DESCRIBED IN THIS SECTION AFTER AT LEAST SEVEN DAYS NOTICE TO THE PLAIN-
TIFF IN THE FORECLOSURE ACTION.  ANY  ENTITY  ACTING  PURSUANT  TO  THIS
SUBDIVISION  SHALL  HAVE  A CAUSE OF ACTION AGAINST THE PLAINTIFF IN THE
FORECLOSURE ACTION TO RECOVER COSTS INCURRED AS A RESULT OF  MAINTAINING
THE PROPERTY.
  4.  IN  THE EVENT THE MORTGAGOR OF THE PROPERTY COMMENCES A PROCEEDING
IN BANKRUPTCY COURT PRIOR  TO  THE  COMPLETION  OF  THE  PUBLIC  AUCTION
ORDERED  IN  THE  JUDGMENT  OF  SALE, THE DUTIES CREATED BY THIS SECTION
SHALL BE SUSPENDED DURING THE PENDENCY OF THE BANKRUPTCY  PROCEEDING  OR
UNTIL  SUCH TIME AS AN ORDER HAS BEEN ENTERED IN THAT PROCEEDING LIFTING
OR REMOVING THE AUTOMATIC STAY OF THE FORECLOSURE SALE.
  5. FOR THE PURPOSES OF THIS SECTION "MAINTAIN" SHALL MEAN KEEPING  THE
SUBJECT PROPERTY IN A MANNER THAT IT DOES NOT POSE A BLIGHT OR NUISANCE,
OR  CREATE  A BLIGHTING INFLUENCE UPON NEIGHBORING PROPERTIES; PROVIDED,
HOWEVER, THAT IF THE PROPERTY IS OCCUPIED BY A TENANT, THEN SUCH PROPER-
TY MUST ALSO BE MAINTAINED IN A SAFE AND HABITABLE CONDITION.
  6. NOTHING CONTAINED IN THIS SECTION SHALL DIMINISH  IN  ANY  WAY  THE
OBLIGATIONS  PURSUANT  TO ANY STATE OR LOCAL LAW OF THE MORTGAGOR OF THE
PROPERTY OR A RECEIVER OF RENTS AND PROFITS APPOINTED IN  AN  ACTION  TO
FORECLOSE  A  MORTGAGE  TO MAINTAIN THE PROPERTY PRIOR TO THE CLOSING OF
TITLE PURSUANT TO A FORECLOSURE SALE.
  S 5. Section 221 of the real property actions and proceedings law,  as
added by chapter 312 of the laws of 1962, is amended to read as follows:
  S  221.  Compelling  delivery of possession of real property.  Where a
judgment affecting the title to, or the possession, enjoyment or use of,
real property allots to any person a distinct parcel of  real  property,
or  contains a direction for the sale of real property, or confirms such
an allotment or sale, it also may direct the delivery of the  possession
of  the  property  to the person entitled thereto, SUBJECT TO THE RIGHTS
AND OBLIGATIONS SET FORTH IN SECTION THIRTEEN HUNDRED FIVE OF THIS CHAP-
TER.
  If a party, or his representative or successor, who is  bound  by  the
judgment, withholds possession from the person thus declared to be enti-
tled  thereto, the court, by order, in its discretion, besides punishing
the disobedience as a contempt, may require  the  sheriff  to  put  that
person  into possession.   Such an order shall be executed as if it were
an execution for the delivery of the possession of the property.
  S 6. Subdivision 5 of section 713 of the  real  property  actions  and
proceedings  law,  as  amended  by  chapter  642 of the laws of 1976, is
amended to read as follows:

S. 5931--A                          7

  5. [The] SUBJECT TO THE RIGHTS AND OBLIGATIONS SET  FORTH  IN  SECTION
THIRTEEN  HUNDRED  FIVE  OF  THIS CHAPTER, THE property has been sold in
foreclosure and either the deed delivered pursuant to such  sale,  or  a
copy  of  such deed, certified as provided in the civil practice law and
rules, has been exhibited to him.
  S 7. Subdivision (a) of rule 3408 of the civil practice law and rules,
as  added  by  chapter  472 of the laws of 2008, is amended and four new
subdivisions (d), (e), (f) and (g) are added to read as follows:
  (a) In any residential foreclosure action involving a [high-cost] home
loan [consummated between January first, two thousand three and  Septem-
ber  first,  two  thousand  eight,  or a subprime or nontraditional home
loan, as those terms are defined under section thirteen hundred four  of
the  real  property actions and proceedings law] AS SUCH TERM IS DEFINED
IN SECTION THIRTEEN HUNDRED  FOUR  OF  THE  REAL  PROPERTY  ACTIONS  AND
PROCEEDINGS  LAW,  in  which the defendant is a resident of the property
subject to foreclosure, the court  shall  hold  a  mandatory  conference
within sixty days after the date when proof of service is filed with the
county  clerk,  or  on  such adjourned date as has been agreed to by the
parties, for the purpose of holding settlement discussions pertaining to
the relative rights and obligations of the parties  under  the  mortgage
loan  documents,  including,  but not limited to determining whether the
parties can reach a mutually agreeable resolution to help the  defendant
avoid  losing his or her home, and evaluating the potential for a resol-
ution in which payment schedules or amounts may  be  modified  or  other
workout  options  may  be agreed to, and for whatever other purposes the
court deems appropriate.
  (D) UPON THE FILING OF A REQUEST  FOR  JUDICIAL  INTERVENTION  IN  ANY
ACTION  PURSUANT  TO THIS SECTION, THE COURT SHALL SEND EITHER A COPY OF
SUCH REQUEST OR THE DEFENDANT'S NAME, ADDRESS AND TELEPHONE  NUMBER  (IF
AVAILABLE)  TO  A HOUSING COUNSELING AGENCY OR AGENCIES ON A LIST DESIG-
NATED BY THE DIVISION OF HOUSING AND COMMUNITY RENEWAL FOR THE  JUDICIAL
DISTRICT  IN WHICH THE DEFENDANT RESIDES. SUCH INFORMATION SHALL BE USED
BY THE DESIGNATED HOUSING COUNSELING AGENCY OR AGENCIES EXCLUSIVELY  FOR
THE  PURPOSE  OF  MAKING  THE  HOMEOWNER AWARE OF HOUSING COUNSELING AND
FORECLOSURE PREVENTION SERVICES  AND  OPTIONS  AVAILABLE  TO  THEM.  THE
COMMISSIONER  OF HOUSING AND COMMUNITY RENEWAL, IN COORDINATION WITH THE
SUPERINTENDENT OF BANKS, SHALL PROMULGATE  RULES  AND  REGULATIONS  THAT
GOVERN THE DISSEMINATION AND USE OF SUCH INFORMATION BY DESIGNATED HOUS-
ING COUNSELING AGENCIES.
  (E) THE COURT SHALL SEND A NOTICE TO PARTIES ADVISING THEM OF THE TIME
AND  PLACE  OF  THE SETTLEMENT CONFERENCE, THE PURPOSE OF THE CONFERENCE
AND THE REQUIREMENTS OF THIS SECTION.   THE NOTICE SHALL BE  IN  A  FORM
PRESCRIBED  BY THE OFFICE OF COURT ADMINISTRATION, OR, AT THE DISCRETION
OF THE OFFICE OF COURT ADMINISTRATION, THE ADMINISTRATIVE JUDGE  OF  THE
JUDICIAL  DISTRICT  IN WHICH THE ACTION IS PENDING, AND SHALL ADVISE THE
PARTIES OF THE DOCUMENTS THAT THEY SHOULD BRING TO THE  CONFERENCE.  FOR
THE PLAINTIFF, SUCH DOCUMENTS SHALL INCLUDE, BUT ARE NOT LIMITED TO, THE
PAYMENT  HISTORY,  AN  ITEMIZATION OF THE AMOUNTS NEEDED TO CURE AND PAY
OFF THE LOAN, AND THE MORTGAGE NOTE AND RIDER.  IF THE PLAINTIFF IS  NOT
THE  OWNER  OF  THE MORTGAGE NOTE, THE PLAINTIFF SHALL PROVIDE THE NAME,
ADDRESS AND TELEPHONE NUMBER OF THE LEGAL OWNER OF  THE  MORTGAGE  NOTE.
FOR THE DEFENDANT, SUCH DOCUMENTS SHALL INCLUDE, BUT ARE NOT LIMITED TO,
PROOF  OF  CURRENT  INCOME  SUCH  AS THE TWO MOST RECENT PAY STUBS, MOST
RECENT TAX RETURN, AND MOST RECENT PROPERTY TAX STATEMENTS.
  (F) BOTH THE PLAINTIFF AND DEFENDANT SHALL NEGOTIATE IN GOOD FAITH  TO
DETERMINE WHETHER A MUTUALLY AGREEABLE RESOLUTION IS POSSIBLE.

S. 5931--A                          8

  (G)  THE PLAINTIFF MUST FILE A NOTICE OF DISCONTINUANCE AND VACATUR OF
THE LIS PENDENS WITHIN ONE HUNDRED  TWENTY  DAYS  AFTER  ANY  SETTLEMENT
AGREEMENT OR LOAN MODIFICATION IS FULLY EXECUTED.
  S  7-a.  Section  3-a of chapter 472 of the laws of 2008, amending the
real property actions and proceedings law and  other  laws  relating  to
foreclosure  actions  on  home  mortgage  loans,  is  amended to read as
follows:
  S 3-a. For any foreclosure action on  a  [residential  mortgage]  HOME
loan  AS  DEFINED  BY  SECTION  1304  OF  THE  REAL PROPERTY ACTIONS AND
PROCEEDINGS LAW, in which the action was initiated prior to September 1,
2008 but where the final order of judgment has not  [yet]  been  issued,
the  court  shall request each plaintiff to identify whether the loan in
foreclosure is a subprime home loan as defined in section  1304  of  the
real  property actions and proceedings law AS IN EFFECT ON THE EFFECTIVE
DATE OF THIS SECTION or is a high-cost home loan as defined  in  section
6-l of the banking law.
  If  the  loan  is  a  subprime  home  loan AS THAT TERM IS USED IN THE
PRECEDING PARAGRAPH or high-cost home loan, the court shall  notify  the
defendant  that  if  he or she is a resident of such property, he or she
may request a settlement conference.
  FOR ANY FORECLOSURE ACTION ON A HOME LOAN THAT IS NOT A SUBPRIME  HOME
LOAN  OR A HIGH-COST HOME LOAN (AS THOSE TERMS ARE USED IN THE PRECEDING
PARAGRAPHS), IN WHICH THE FORECLOSURE ACTION WAS INITIATED PRIOR TO  THE
DATE  THAT  SUCH  FORECLOSURE ACTION BECAME SUBJECT TO THE PROVISIONS OF
RULE 3408 OF THE CIVIL PRACTICE LAW AND RULES BUT WHERE THE FINAL  ORDER
OF  JUDGMENT  HAS  NOT BEEN ISSUED, THE COURT SHALL NOTIFY THE DEFENDANT
THAT IF HE OR SHE IS A RESIDENT OF SUCH PROPERTY, HE OR SHE MAY  REQUEST
A SETTLEMENT CONFERENCE.
  If  the  defendant  requests  a  conference, the court shall hold such
conference as soon as practicable for the purpose of holding  settlement
discussions  pertaining  to  the  rights  and obligations of the parties
under the mortgage loan documents, including but not limited to,  deter-
mining  whether the parties can reach a mutually agreeable resolution to
help the defendant avoid losing his or  her  home,  and  evaluating  the
potential  for a resolution in which payment schedules or amounts may be
modified or other workout options may be agreed  to,  and  for  whatever
other purposes the court deems appropriate.
  At  any  conference held pursuant to this section, the plaintiff shall
appear in person or by counsel, and if appearing by counsel, such  coun-
sel  shall  be  fully  authorized  to dispose of the case. The defendant
shall appear in person or by counsel. If the defendant is appearing  pro
se, the court shall advise the defendant of the nature of the action and
his  or  her rights and responsibilities as a defendant. Where appropri-
ate, the court may permit a representative of the  plaintiff  to  attend
the settlement conference telephonically or by video-conference.
  S 8. Intentionally omitted.
  S 9. Paragraph (e) of subdivision 1 of section 6-1 of the banking law,
as  added  by  chapter  626  of the laws of 2002 and subparagraph (i) as
amended by chapter 552 of the laws  of  2007,  is  amended  to  read  as
follows:
  (e)  "Home  loan"  means  a  [home] loan, including an open-end credit
plan, other than a reverse mortgage transaction, in which:
  (i) The principal amount of the loan AT ORIGINATION  does  not  exceed
the  conforming loan size limit for a comparable dwelling as established
from time to time by the federal national mortgage association;
  (ii) The borrower is a natural person;

S. 5931--A                          9

  (iii) The debt is incurred by the  borrower  primarily  for  personal,
family, or household purposes;
  (iv) The loan is secured by a mortgage or deed of trust on real estate
[upon  which  there  is located or there is to be located a structure or
structures intended principally for occupancy of from one to four  fami-
lies  which  is  or  will  be occupied by the borrower as the borrower's
principal dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELLING, OR  BY  A
CONDOMINIUM  UNIT,  OR  BY ANY CERTIFICATE OF STOCK OR OTHER EVIDENCE OF
OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A  CORPORATION,  PARTNERSHIP
OR  OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNERSHIP OF REAL
ESTATE, IN EITHER CASE USED OR OCCUPIED OR INTENDED TO BE USED OR  OCCU-
PIED,  WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS
AND WHICH IS OR WILL BE OCCUPIED BY THE BORROWER AS THE BORROWER'S PRIN-
CIPAL DWELLING; and
  (v) The property is located in this state.
  S 10. Paragraphs (r) and (s) of subdivision 2 of section  6-l  of  the
banking law, as added by chapter 472 of the laws of 2008, are amended to
read as follows:
  (r)  No  prepayment  penalties.  [No]  NOTWITHSTANDING  PARAGRAPH B OF
SUBDIVISION THREE OF SECTION 5-501 OF THE GENERAL  OBLIGATIONS  LAW,  NO
prepayment  penalties  or  fees shall be charged or collected on a high-
cost home loan. A prepayment penalty in a high-cost home loan  shall  be
unenforceable.
  (s)  No  abusive  yield spread premiums. In arranging a high-cost home
loan, the mortgage broker shall, at the time  of  application,  disclose
the  exact amount and methodology of DETERMINING total compensation that
the broker will receive. Such amount may be paid as direct  compensation
from the lender, direct compensation from the borrower, or a combination
of  the  two.  The  provisions  of this paragraph shall not restrict the
ability of a borrower to utilize a yield  spread  premium  in  order  to
offset  any  up  front costs by accepting a higher interest rate. If the
borrower chooses this option, any compensation from the  lender  [which]
THAT exceeds the [exact] amount of total compensation owed to the broker
must be credited to the borrower. The superintendent shall prescribe the
form  that such disclosure shall take. This provision shall not restrict
a broker from accepting a lesser amount OF COMPENSATION.
  S 11. Paragraph (d) of subdivision 1 and paragraphs  (l)  and  (n)  of
subdivision 2 of section 6-m of the banking law, as added by chapter 472
of the laws of 2008, are amended to read as follows:
  (d)  "Home  loan"  means  a  [home] loan, including an open-end credit
plan, other than a reverse mortgage transaction, in which:
  (i) The principal amount of the loan AT ORIGINATION  does  not  exceed
the  conforming loan size limit for a comparable dwelling as established
from time to time by the federal national mortgage association;
  (ii) The borrower is a natural person;
  (iii) The debt is incurred by the  borrower  primarily  for  personal,
family, or household purposes;
  (iv) The loan is secured by a mortgage or deed of trust on real estate
[upon  which  there  is located or there is to be located a structure or
structures intended principally for occupancy of from one to four  fami-
lies  which  is  or  will  be occupied by the borrower as the borrower's
principal dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELLING, OR  BY  A
CONDOMINIUM  UNIT,  OR  BY ANY CERTIFICATE OF STOCK OR OTHER EVIDENCE OF
OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A  CORPORATION,  PARTNERSHIP
OR  OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNERSHIP OF REAL
ESTATE, IN EITHER CASE, USED OR OCCUPIED OR INTENDED TO BE USED OR OCCU-

S. 5931--A                         10

PIED, WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE  PERSONS
AND WHICH IS OR WILL BE OCCUPIED BY THE BORROWER AS THE BORROWER'S PRIN-
CIPAL DWELLING; and
  (v) The property is located in this state.
  (l)  Prohibited payments to mortgage BANKERS AND brokers. In making or
arranging a subprime home loan, no lender, MORTGAGE BANKER  or  mortgage
broker  shall accept or give any fee, kickback, thing of value, portion,
split or percentage of charges, other  than  as  payment  for  goods  or
facilities  that  were actually furnished or services that were actually
performed. Such payment must be reasonably related to the value  of  the
goods  or  facilities that were actually furnished or services that were
actually performed.
  (n) No abusive yield spread premiums. In  arranging  a  subprime  home
loan,  the  mortgage  broker shall, at the time of application, disclose
the exact amount and methodology for determining the total  compensation
that  the broker will receive. Such amount may be paid as direct compen-
sation from the lender, direct compensation  from  the  borrower,  or  a
combination  of  the  two.  The  provisions  of this paragraph shall not
restrict the ability of a borrower to utilize a yield spread premium  in
order  to  offset any upfront costs by accepting a higher interest rate.
If the borrower chooses this option, any compensation  from  the  lender
[which]  THAT exceeds the exact amount of total compensation owed to the
broker must be  credited  to  the  borrower.  The  superintendent  shall
prescribe the form that such disclosure shall take. This paragraph shall
not restrict a broker from accepting a lesser amount OF COMPENSATION.
  S  12.  Subdivisions  3,  4,  5,  6, 7, 8, 9, 10, 11, 12, 13 and 14 of
section 6-m of the banking law, as added by chapter 472 of the  laws  of
2008, are amended to read as follows:
  3.  CERTAIN LOAN PROVISIONS RENDERED VOID. Any provision in a subprime
home loan that  violates  subdivision  two  of  this  section  shall  be
rendered void.
  4.  [No  arrangement  of  certain subprime loans] ABILITY TO REPAY. No
lender or mortgage broker shall make or arrange  a  subprime  home  loan
unless  the  lender  or  mortgage  broker  reasonably  and in good faith
believes at the time [the loan is consummated] OF THE LOAN CLOSING  that
one  or  more  of the borrowers, when considered individually or collec-
tively, has the ability to repay the loan according to its terms and  to
pay  applicable  real  estate  taxes and hazard insurance premiums. If a
lender or mortgage broker making or arranging a subprime home loan knows
that one or more home loans secured by the same real  property  will  be
made  contemporaneously to the same borrower with the subprime home loan
being made or arranged by that lender or mortgage broker, the lender  or
mortgage broker making or arranging the subprime home loan must document
the  borrower's  ability  to repay the combined payments of all loans on
the same real property.
  (a) A lender or mortgage broker's analysis of a borrower's ability  to
repay  a  subprime  home  loan  according  to  the loan terms and to pay
related real estate taxes and insurance premiums shall  be  based  on  a
consideration  of  the  borrower's  credit history, current and expected
income, current obligations,  employment  status,  and  other  financial
resources  other  than  the  borrower's equity in the real property that
secures repayment of the subprime home loan.
  (b) In determining a borrower's ability to repay a subprime home loan,
the lender or mortgage broker shall take reasonable steps to verify  the
accuracy and completeness of information provided by or on behalf of the

S. 5931--A                         11

borrower  using  tax returns, payroll receipts, bank records, reasonable
alternative methods, or reasonable third-party verification.
  (c)  In determining a borrower's ability to repay a subprime home loan
according to its terms when the loan has an adjustable rate feature, the
lender or mortgage broker shall calculate the monthly payment amount for
principal and interest by assuming  (i)  the  loan  proceeds  are  fully
disbursed on the date of the loan closing, (ii) the loan is to be repaid
in  substantially  equal  monthly  amortizing  payments of principal and
interest over the entire term of the loan, with no balloon payment,  and
(iii) the interest rate over the entire term of the loan is a fixed rate
equal to the fully indexed rate at the time of the loan closing, without
considering any initial discounted rate.
  (d)  A lender or mortgage broker's analysis of a borrower's ability to
repay a subprime home loan may utilize  reasonable  commercially  recog-
nized  underwriting  standards  and  methodologies,  including automated
underwriting systems, provided the standards  and  methodologies  comply
with the provisions of this section.
  5.  REQUIRED  LEGEND.  Subprime  home  loan  mortgages shall include a
legend on top of the mortgage in  twelve-point  type  stating  that  the
mortgage is a subprime home loan subject to this section.
  6.  EVASION  OF STATUTORY REQUIREMENTS. The provisions of this section
shall apply to any person who [in  bad  faith]  attempts  to  avoid  the
application of this section by any subterfuge, including but not limited
to,  splitting  or dividing any loan transaction into separate parts for
the purpose of evading the provisions of this section.
  7. GOOD FAITH ERROR. A lender of  a  subprime  home  loan  that,  when
acting  in  good  faith,  fails  to  comply  with the provisions of this
section, shall not be deemed to have violated this section if, prior  to
the institution of any action and before the borrower is prejudiced, the
lender  notifies  the  borrower  of  the compliance failure, appropriate
restitution is made, and whatever adjustments  that  are  necessary  are
made  to  the  loan  to  make  the loan satisfy the requirements of this
section.
  8. ENFORCEMENT. The attorney general or the superintendent may enforce
the provisions of this section.
  9. DAMAGES. Any person found by a preponderance  of  the  evidence  to
have violated this section shall be liable to the borrower of a subprime
home loan for actual damages.
  10.  ATTORNEYS FEES. A court may also award reasonable attorneys' fees
to a prevailing borrower in a foreclosure action.
  11. EQUITABLE RELIEF. A borrower may be granted injunctive, declarato-
ry and such other equitable relief as the court deems appropriate in  an
action to enforce compliance with this section.
  12.  REMEDIES NOT EXCLUSIVE. The remedies provided in this section are
not intended to be the exclusive remedies available to a borrower  of  a
subprime home loan.
  13.  DEFENSE  TO FORECLOSURE. In any action by a lender or assignee to
enforce a loan against a borrower in default more than sixty days or  in
foreclosure,  a  borrower may assert as a defense, any violation of this
section.
  14. SEVERABILITY. The provisions of this section shall  be  severable,
and  if  any  phrase,  clause,  sentence, or provision is declared to be
invalid, or is preempted by federal law or regulation, the  validity  of
the  remainder  of  this  section  shall not be affected thereby. If any
provision of this section is declared to be inapplicable to any specific
category, type, or kind of points and fees with respect to a home  loan,

S. 5931--A                         12

the  provisions of this section shall nonetheless continue to apply with
respect to all other points and fees.
  S  13.  Paragraphs  (a) and (d) of subdivision 1 of section 590 of the
banking law, as added by chapter 571 of the laws of 1986, are amended to
read as follows:
  (a) "Mortgage loan" shall mean a loan to a natural person made  prima-
rily  for  personal,  family  or  household  use, [primarily] secured by
either a mortgage OR DEED OF TRUST  on  residential  real  property  [or
certificates],  ANY  CERTIFICATE of stock or other evidence of ownership
[interests] in, and proprietary [leases] LEASE  from,  [corporations  or
partnerships]  A  CORPORATION  OR  PARTNERSHIP formed for the purpose of
cooperative ownership of residential real property OR, IF DETERMINED  BY
THE  BANKING BOARD BY REGULATION, SHALL INCLUDE SUCH A LOAN SECURED BY A
SECURITY INTEREST ON A MANUFACTURED HOME;
  (d) "Soliciting, processing, placing or negotiating a  mortgage  loan"
shall  mean  for  compensation  or  gain, either directly or indirectly,
accepting or offering to accept an  application  for  a  mortgage  loan,
assisting  or offering to assist in the processing of an application for
a mortgage loan, soliciting or offering to solicit a  mortgage  loan  on
behalf  of  a  third  party  or negotiating or offering to negotiate the
terms or conditions of a mortgage loan with a  lender  on  behalf  of  a
third  party;  PROVIDED  THAT, FOR PURPOSES OF THIS SECTION, A BONA FIDE
NOT-FOR-PROFIT ORGANIZATION THAT OFFERS COUNSELING OR ADVICE TO HOMEOWN-
ERS IN FORECLOSURE OR LOAN DEFAULT WITH A LOAN MODIFICATION OR REFINANC-
ING SHALL NOT BE DEEMED TO BE SOLICITING, PROCESSING, PLACING OR NEGOTI-
ATING A MORTGAGE LOAN FOR COMPENSATION OR GAIN;
  S 14. Paragraphs (c) and (d) of subdivision 3 of section  590  of  the
banking  law  are relettered paragraphs (d) and (e), and a new paragraph
(c) is added to read as follows:
  (C) SUCH RULES AND REGULATIONS UNDER THIS ARTICLE REGARDING THE ORIGI-
NATION, SALE OR SERVICING OF MANUFACTURED HOME LOANS AS MAY BE NECESSARY
AND APPROPRIATE FOR THE PROTECTION OF CONSUMERS;
  S 15. Paragraphs (b) and (b-1) of subdivision 2 of section 590 of  the
banking  law,  paragraph  (b) as amended and paragraph (b-1) as added by
chapter 472 of the laws of 2008, are amended to read as follows:
  (b) No person, partnership, association, corporation or  other  entity
shall engage in the business of soliciting, processing, placing or nego-
tiating  a mortgage loan or offering to solicit, process, place or nego-
tiate a mortgage loan in this state without first being registered  with
the superintendent as a mortgage broker in accordance with the registra-
tion  procedure  provided in this article and by such regulations as may
be promulgated by the banking board or prescribed by the superintendent.
The registration provisions of this subdivision shall not apply  to  any
exempt organization [or], mortgage banker OR MORTGAGE LOAN SERVICER.  No
real estate broker or salesman, as defined in section four hundred forty
of  the real property law, shall be deemed to be engaged in the business
of a mortgage broker if he does not accept a fee, directly or  indirect-
ly,  for services rendered in connection with the solicitation, process-
ing, placement or negotiation of a mortgage loan. No attorney-at-law who
solicits, processes, places or negotiates a mortgage loan incidental  to
his  legal  practice  shall be deemed to be engaged in the business of a
mortgage broker. The registration provisions of this  subdivision  shall
not  apply to any person or entity which shall be exempted in accordance
with regulations promulgated by the banking board hereunder.
  (b-1) No person, partnership, association, corporation or other entity
shall engage in the business of servicing mortgage loans with respect to

S. 5931--A                         13

any property located in this state without first being  registered  with
the  superintendent  as  a mortgage loan servicer in accordance with the
registration procedure provided by such regulations as may be prescribed
by the superintendent. The superintendent may refuse to register a mort-
gage  loan  servicer  on  the  same grounds that he or she may refuse to
issue a registration certificate to a mortgage broker pursuant to subdi-
vision two of section five hundred ninety-two-a of this  article.    The
registration  provisions  of  this  subdivision  shall  not apply to any
exempt organization, mortgage banker, or mortgage broker or  any  person
or  entity  which  shall  be  exempted  in  accordance  with regulations
prescribed by the superintendent hereunder; provided  that  such  exempt
organization, mortgage banker, mortgage broker, or exempted person noti-
fies the superintendent that it is acting as a mortgage loan servicer in
this  state and complies with any regulation applicable to mortgage loan
servicers, promulgated by the banking board or prescribed by the  super-
intendent  with  respect to mortgage loan servicers.  THE SUPERINTENDENT
MAY REQUIRE ALL REGISTRATIONS AND NOTIFICATIONS TO BE MADE  THROUGH  THE
NATIONWIDE  MORTGAGE  LICENSING  SYSTEM  AND REGISTRY. AN APPLICATION TO
BECOME A REGISTERED MORTGAGE  LOAN  SERVICER  OR  ANY  APPLICATION  WITH
RESPECT  TO  A  MORTGAGE  LOAN SERVICER SHALL BE ACCOMPANIED BY A FEE AS
PRESCRIBED PURSUANT TO SECTION  EIGHTEEN-A  OF  THIS  CHAPTER.  ANY  FEE
ESTABLISHED PURSUANT TO THIS SUBDIVISION MAY BE COLLECTED BY AND INCLUDE
A PROCESSING FEE CHARGED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND
REGISTRY.  ANY  SUCH PROCESSING FEES SHALL NOT BE REMITTED TO THE SUPER-
INTENDENT AND SHALL NOT BE DEEMED REVENUE PURSUANT TO  THIS  CHAPTER  OR
THE STATE FINANCE LAW.
  S  16.  Section  595-a  of  the banking law is amended by adding a new
subdivision 5 to read as follows:
  5. NO LICENSEE OR REGISTRANT ENGAGING IN ANY  ACTIVITIES  CONSTITUTING
THE  BUSINESS  OF  A  DISTRESSED  PROPERTY  CONSULTANT,  AS DESCRIBED IN
SECTION TWO HUNDRED SIXTY-FIVE-B OF THE REAL PROPERTY LAW, SHALL  CHARGE
FOR  OR  ACCEPT PAYMENT FOR REAL PROPERTY CONSULTING SERVICES AS DEFINED
IN SUCH SECTION BEFORE THE FULL COMPLETION OF SUCH SERVICES.
  S 17. Subdivisions 1, 2 and 4 of section 187.00 of the penal  law,  as
added  by  chapter  472  of  the  laws  of  2008, are amended to read as
follows:
  1. "Person" means any individual or entity[, other than an  individual
who  applies  for a residential mortgage loan and intends to occupy such
residential property which such mortgage secures unless such person acts
as an accessory to an individual  or  entity  in  committing  any  crime
defined in this article].
  2.  "Residential  mortgage  loan"  means a loan or agreement to extend
credit, including the renewal [or], refinancing OR MODIFICATION  of  any
such loan, made to a person, which loan is primarily secured by either A
mortgage,  deed of trust, or other lien upon any interest in residential
real property or ANY certificate of stock or other evidence of ownership
in, AND A PROPRIETARY LEASE FROM, a corporation  or  partnership  formed
for the purpose of cooperative ownership of residential real property.
  4.    "Residential mortgage fraud" is committed by [any] A person who,
knowingly and with intent to defraud, presents, causes to be  presented,
or  prepares with knowledge or belief that it will be used in soliciting
an applicant for [a residential mortgage loan], [or  in]  applying  for,
[the] underwriting [of,] or closing [of] a residential mortgage loan, or
[in  documents  filed]  FILING  with a county clerk of any county in the
state arising out of and related to the closing of a  residential  mort-
gage loan, any written statement which [he or she knows to]:

S. 5931--A                         14

  (a)  [contain]  CONTAINS  materially  false information concerning any
fact material thereto; or
  (b)  [conceal]  CONCEALS,  for  the purpose of misleading, information
concerning any fact material thereto.
  S 18. The penal law is amended by adding a new section 187.01 to  read
as follows:
S 187.01 LIMITATION ON PROSECUTION.
  NO  INDIVIDUAL WHO APPLIES FOR A RESIDENTIAL MORTGAGE LOAN AND INTENDS
TO OCCUPY SUCH RESIDENTIAL PROPERTY WHICH SUCH MORTGAGE SECURES SHALL BE
HELD LIABLE UNDER THIS ARTICLE PROVIDED, HOWEVER,  ANY  SUCH  INDIVIDUAL
WHO  ACTS  AS  AN ACCESSORY TO AN INDIVIDUAL OR ENTITY IN COMMITTING ANY
CRIME DEFINED IN THIS ARTICLE MAY BE CHARGED AS  AN  ACCESSORY  TO  SUCH
CRIME.
  S  19.  Subparagraphs  (i) and (vii) of paragraph (e) of subdivision 1
and paragraph (b) of subdivision 2 of section 265-b of the real property
law, as added by chapter 472 of the laws of 2008, are amended to read as
follows:
  (i) an attorney admitted to practice in the state of New York WHEN THE
ATTORNEY IS DIRECTLY PROVIDING CONSULTING SERVICES TO A HOMEOWNER IN THE
COURSE OF HIS OR HER REGULAR LEGAL PRACTICE;
  (vii) a person licensed as a mortgage banker or registered as a  mort-
gage  broker  or  registered  as  a mortgage loan servicer as defined in
article twelve-D of the banking law, PROVIDED THAT NO SUCH PERSON  SHALL
TAKE  ANY  UPFRONT  FEE  IN CONJUNCTION WITH ACTIVITIES CONSTITUTING THE
BUSINESS OF A DISTRESSED PROPERTY CONSULTANT;
  (b) charging for or accepting  ANY  payment  for  consulting  services
before  the full completion of ALL such services, INCLUDING A PAYMENT TO
BE PLACED IN ESCROW PENDING THE COMPLETION OF SUCH SERVICES;
  S 20. Severability clause. If any clause, sentence, paragraph, section
or part of this act shall be adjudged by any court of  competent  juris-
diction to be invalid, such judgment shall not affect, impair or invali-
date  the  remainder  thereof, but shall be confined in its operation to
the clause,  sentence,  paragraph,  section  or  part  thereof  directly
involved  in  the  controversy  in  which  such judgment shall have been
rendered.
  S 21. This act shall take effect immediately; provided, however, that:
  a. Section one of this act shall take  effect  on  the  thirtieth  day
after  this act shall have become a law and shall apply to legal actions
commenced on or after such date;
  b. Sections two, five and six of this act shall  take  effect  on  the
thirtieth  day after this act shall have become a law and shall apply to
residential real property to which title is acquired on  or  after  such
date;
  c.  Section  three  of  this act shall take effect on the sixtieth day
after this act shall have become  a  law  and  shall  apply  to  notices
required  by  section  1304 of the real property actions and proceedings
law mailed on or after such date;
  d. Section four of this act shall take effect on the one hundred twen-
tieth day after it shall have become a law;
  e. Section seven of this act shall take effect on  the  thirtieth  day
after  this act shall have become a law and shall apply to legal actions
filed on or after such date; provided, however  that  the  amendment  to
subdivision  (a)  of  rule  3408 of the civil practice law and rules, as
provided in section seven  of  this  act  shall  expire  and  be  deemed
repealed 5 years after such effective date;

S. 5931--A                         15

  f.  Section  eleven  of this act shall take effect on the sixtieth day
after this act shall have become a law;
  g. Section thirteen of this act shall take effect on the ninetieth day
after  this  act  shall have become a law; provided that a person who is
not exempt from registration may continue to  engage  in  mortgage  loan
modification activities after such date if he or she: (i) was engaged in
soliciting  or negotiating mortgage loan modifications prior to the date
this act shall have become a law; (ii)  has  filed  an  application  for
registration  with  the  superintendent of banks; and (iii) has received
confirmation that such application is informationally complete, but only
until he or she receives notice from the superintendent that such appli-
cation has been denied;
  h. Section fifteen of this act shall take effect on the same date  and
in  the  same  manner  as  section 8 of chapter 472 of the laws of 2008,
takes effect.

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5931--B

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 18, 2009
                               ___________

Introduced  by  Sen.  KLEIN  -- read twice and ordered printed, and when
  printed to be  committed  to  the  Committee  on  Rules  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to  said  committee  --  committee  discharged,  bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the civil practice law  and  rules,  the  real  property
  actions  and  proceedings  law, the banking law and chapter 472 of the
  laws of 2008 amending the real property actions  and  proceedings  law
  and other laws relating to foreclosure actions on home mortgage loans,
  in  relation  to  home  mortgage  loans and notification to tenants of
  foreclosed properties; to amend the penal  law,  in  relation  to  the
  crime  of  mortgage  fraud;  and  to  amend  the real property law, in
  relation to assignments of mortgages and distressed property  consult-
  ing  contracts; to amend the judiciary law, in relation to the assign-
  ment of foreclosure actions; to amend part NN of  chapter  57  of  the
  laws  of  2008,  relating  to  authorizing the New York state mortgage
  agency to transfer certain moneys; to repeal certain provisions of the
  civil practice law and rules relating to mandatory settlement  confer-
  ence  in residential foreclosure actions; and providing for the repeal
  of certain provisions upon expiration thereof

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.    Section  5102  of  the civil practice law and rules, as
amended by chapter 531 of the laws  of  1963,  is  amended  to  read  as
follows:
  S  5102.  Enforcement of judgment or order awarding possession of real
property or a chattel. A judgment or order, or a part thereof,  awarding
possession  of  real  property  or  a  chattel  may  be  enforced  by an
execution, which shall particularly describe the property and  designate
the  party  to  whom  the  judgment  or order awards its possession. The
execution shall comply with the provisions of section 5230, except  that

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12043-15-9
              

S. 5931--B                          2

it shall direct the sheriff to deliver possession of the property to the
party designated.  In an action to recover a chattel, where the judgment
awards  possession  of the chattel and in the alternative its value, the
execution  shall also direct the sheriff, if the chattel cannot be found
within his county, to levy upon real and personal property  as  upon  an
execution  to  enforce  a  money  judgment.  After  the death of a party
against whom a judgment or order awarding possession  of  real  property
has  been  obtained, an order granting leave to issue such execution may
be granted upon twenty days' notice, to be served in the same manner  as
a  summons,  to  the  occupants of the real property and to the heirs or
devisees of the deceased party.  IF THE REAL PROPERTY  TO  BE  DELIVERED
INCLUDES  A DWELLING UNIT LOCATED IN A RESIDENTIAL BUILDING THE JUDGMENT
IN A FORECLOSURE ACTION SHALL PROVIDE THAT  ONLY  AN  OCCUPANT  OF  SUCH
DWELLING UNIT WHO WAS NAMED AS A DEFENDANT IN THE FORECLOSURE ACTION AND
WHO  WAS  SERVED  WITH  THE  NOTICE REQUIRED BY SECTION THIRTEEN HUNDRED
THREE OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW MAY BE SUBJECT TO
AN EXECUTION DIRECTING DELIVERY OF SUCH DWELLING UNIT AND SUCH  OCCUPANT
SHALL  BE  SERVED  WITH  A  NINETY-DAY  NOTICE  TO  QUIT,  IN THE MANNER
PRESCRIBED IN SECTION SEVEN HUNDRED THIRTY-FIVE  OF  THE  REAL  PROPERTY
ACTIONS  AND PROCEEDINGS LAW, PRIOR TO THE EXECUTION OF THAT PART OF THE
JUDGMENT THAT DIRECTS DELIVERY OF POSSESSION OF THE DWELLING UNIT.
  S 2.  Section 1301 of the real property actions and proceedings law is
amended by adding a new subdivision 4 to read as follows:
  4. THE SUMMONS SHALL CONTAIN A NOTICE ADVISING  THAT  A  TENANT  OF  A
DWELLING UNIT LOCATED IN A RESIDENTIAL BUILDING WHO IS NOT THE MORTGAGOR
HAS  THE  OPTION  TO APPEAR WITHOUT CONTESTING THE MERITS OF THE ACTION,
BUT MAY APPEAR SOLELY FOR THE PURPOSE OF RECEIVING THE FURTHER ORDERS OF
THE COURT RELATED TO THE  DISPOSITION  AND  SALE  OF  THE  PROPERTY  AND
DESCRIBING A PROCEDURE TO MAKE SUCH AN APPEARANCE IN THE ACTION.
  S  3.   Section 1303 of the real property actions and proceedings law,
as amended by chapter 472 of the laws of 2008, is  amended  to  read  as
follows:
  S  1303. Foreclosures; required notices. 1. The foreclosing party in a
mortgage foreclosure action, (A) which involves residential real proper-
ty  consisting  of  owner-occupied  one-to-four-family  dwellings  shall
provide  notice to the mortgagor OR (B) ANY TENANT OF A DWELLING UNIT IN
SUCH REAL PROPERTY WHO IS NAMED AS A DEFENDANT IN THE FORECLOSURE ACTION
in accordance with the provisions of this section with regard to  infor-
mation and assistance about the foreclosure process.
  2.  The  notice  required  by this section shall be delivered with the
summons and complaint to  commence  a  foreclosure  action.  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 the summons
and complaint, and the title of the notice shall  be  in  bold,  twenty-
point type. The notice shall be on its own page.
  3. The notice required by this section TO BE GIVEN TO HOMEOWNERS shall
INCLUDE  INFORMATION ABOUT THE AVAILABILITY OF THE FORECLOSURE DIVERSION
PROGRAM AND ITS ABILITY TO ASSIST HOMEOWNERS IN AVOIDING FORECLOSURE AND
THE MANDATORY COUNSELING REQUIRED FOR PARTICIPATION IN  THE  FORECLOSURE
DIVERSION  PROGRAM. SUCH NOTICE SHALL INCLUDE THE HOTLINE ESTABLISHED BY
THE BANKING DEPARTMENT AND PROVIDED  BY  THE  DIVISION  OF  HOUSING  AND
COMMUNITY  RENEWAL  AND  THE  NAMES  AND  CONTACT  INFORMATION  FOR  ALL
NOT-FOR-PROFIT ASSISTANCE PROVIDERS AUTHORIZED BY THE BANKING DEPARTMENT
TO PROVIDE HOUSING COUNSELING  SERVICES  TO  HOMEOWNERS  AND  appear  as
follows:
                   Help for Homeowners in Foreclosure

S. 5931--B                          3

  New  York  State  Law  requires that we send you this notice about the
foreclosure process. Please read it carefully.

    BEFORE YOU ATTEND A SETTLEMENT CONFERENCE, YOU ARE STRONGLY URGED
   TO SCHEDULE AND ATTEND A COUNSELING SESSION BY CALLING THE BANKING
   DEPARTMENT AT THE FOLLOWING HOTLINE NUMBER: _______________________

Summons and Complaint
  You  are  in danger of losing your home. If you fail to respond to the
summons and complaint in this foreclosure  action,  you  may  lose  your
home.  Please read the summons and complaint carefully. You should imme-
diately contact an attorney or your local legal  aid  office  to  obtain
advice  on  how to protect yourself.  YOU SHOULD IMMEDIATELY SEEK OUT AN
APPROVED LOAN COUNSELOR. A LIST OF APPROVED COUNSELORS CAN  BE  OBTAINED
BY  CALLING  THE HOTLINE. IF YOU DO NOT ATTEND A COUNSELING SESSION, YOU
WILL NOT BE ELIGIBLE TO PARTICIPATE IN THE RESIDENTIAL MORTGAGE FORECLO-
SURE DIVERSION PROGRAM. THIS WILL NOT AFFECT YOUR RIGHT TO A  SETTLEMENT
CONFERENCE, BUT WILL AFFECT YOUR ELIGIBILITY FOR A POSTPONEMENT OF FORE-
CLOSURE UNDER THE RESIDENTIAL MORTGAGE FORECLOSURE DIVERSION PROGRAM.
Sources of Information and Assistance
  The  State  encourages  you  to  become informed about your options in
foreclosure. In addition to seeking assistance from an attorney or legal
aid office, there are government agencies and  non-profit  organizations
that  you  may contact for information about possible options, including
trying to work with your lender during this process.
  To locate an entity near you, you  may  call  the  toll-free  helpline
maintained  by  the  New  York State Banking Department at _____________
(enter number) or visit  the  Department's  website  at  _______________
(enter web address).
Foreclosure rescue scams
  Be careful of people who approach you with offers to "save" your home.
There  are  individuals  who watch for notices of foreclosure actions in
order to unfairly profit from a  homeowner's  distress.  You  should  be
extremely  careful  about any such promises and any suggestions that you
pay them a fee or sign over your deed. State law requires anyone  offer-
ing  such  services  for  profit  to  enter  into a contract which fully
describes the services they will perform and fees they will charge,  and
which  prohibits  them  from  taking  any money from you until they have
completed all such promised services.
  4.  THE NOTICE REQUIRED BY THIS SECTION TO BE GIVEN TO  TENANTS  SHALL
APPEAR AS FOLLOWS:
              HELP FOR TENANTS OF BUILDINGS IN FORECLOSURE
   NEW YORK STATE LAW REQUIRES THAT WE SEND YOU THIS NOTICE ABOUT THE
             FORECLOSURE PROCESS. PLEASE READ IT CAREFULLY.

                          SUMMONS AND COMPLAINT
  YOU  ARE  IN DANGER OF LOSING YOUR HOME. IF YOU FAIL TO RESPOND TO THE
SUMMONS AND COMPLAINT IN THIS FORECLOSURE  ACTION,  YOU  MAY  LOSE  YOUR
HOME.  YOU  MAY ALSO BE EVICTED FROM YOUR HOME IF YOUR LANDLORD IS FORE-
CLOSED UPON. PLEASE READ THE SUMMONS AND COMPLAINT CAREFULLY.
  YOU HAVE THE OPTION TO  APPEAR  IN  THIS  FORECLOSURE  ACTION  WITHOUT
CONTESTING  THE  MERITS  OF  THE  ACTION.  YOU MAY APPEAR SOLELY FOR THE
PURPOSE OF RECEIVING THE FURTHER ORDERS OF  THE  COURT  RELATED  TO  THE
DISPOSITION  AND  SALE OF THE PROPERTY. THE SUMMONS DESCRIBES THE MANNER
IN WHICH YOU CAN MAKE SUCH AN APPEARANCE.

S. 5931--B                          4

  YOU SHOULD IMMEDIATELY CONTACT AN ATTORNEY OR  YOUR  LOCAL  LEGAL  AID
OFFICE TO OBTAIN ADVICE ON HOW TO PROTECT YOURSELF.
                  SOURCES OF INFORMATION AND ASSISTANCE
  THE  STATE  ENCOURAGES  YOU  TO  BECOME INFORMED ABOUT YOUR OPTIONS IN
FORECLOSURE. IN ADDITION TO SEEKING ASSISTANCE FROM AN ATTORNEY OR LEGAL
AID OFFICE, THERE ARE GOVERNMENT AGENCIES AND  NON-PROFIT  ORGANIZATIONS
THAT  YOU  MAY CONTACT FOR INFORMATION ABOUT POSSIBLE OPTIONS, INCLUDING
TRYING TO WORK WITH YOUR LANDLORD'S LENDER OR A NEW  OWNER  DURING  THIS
PROCESS IN ORDER TO PREVENT YOUR EVICTION AND TO ENSURE THAT YOUR DWELL-
ING IS PROPERLY MAINTAINED.
  TO  LOCATE  AN  ENTITY  NEAR  YOU, YOU MAY CALL THE TOLL-FREE HELPLINE
MAINTAINED BY THE NEW YORK  STATE  DIVISION  OF  HOUSING  AND  COMMUNITY
RENEWAL  AT               (ENTER NUMBER) OR VISIT THE DIVISION'S WEBSITE
AT                (ENTER WEB ADDRESS).  IF YOUR RENTAL UNIT  IS  LOCATED
IN  NEW  YORK CITY, YOU MAY ALSO CALL THE HELPLINE MAINTAINED BY THE NEW
YORK CITY DEPARTMENT OF HOUSING PRESERVATION AND DEVELOPMENT  AT      OR
VISIT THE DEPARTMENT'S WEBSITE AT               (ENTER WEB ADDRESS).
  5.  The  banking  department,  THE  DIVISION  OF HOUSING AND COMMUNITY
RENEWAL OR THE NEW YORK CITY  DEPARTMENT  OF  HOUSING  PRESERVATION  AND
DEVELOPMENT  shall  prescribe the telephone number and web address to be
included in the APPROPRIATE notice.
  [5.] 6. The banking department, THE DIVISION OF HOUSING AND  COMMUNITY
RENEWAL  OR  THE  NEW  YORK  CITY DEPARTMENT OF HOUSING PRESERVATION AND
DEVELOPMENT shall post on its website or otherwise make  readily  avail-
able the name and contact information of government agencies or non-pro-
fit  organizations that may be contacted for information about the fore-
closure  process,  EVICTION  PREVENTION,  AND   REQUIREMENTS   FOR   THE
MAINTENANCE  OF  PROPERTIES  DURING THE PENDENCY OF FORECLOSURE ACTIONS,
including maintaining a toll-free helpline to disseminate  the  informa-
tion required by this section.
  S  4.  Subdivisions  1,  2  and 5 of section 1304 of the real property
actions and proceedings law, as added by chapter  472  of  the  laws  of
2008, are amended to read as follows:
  1. Notwithstanding any other provision of law, with regard to a [high-
cost]  home loan[, as such term is defined in section six-l of the bank-
ing law, a subprime home loan  or  a  non-traditional  home  loan]  MADE
BEFORE  SEPTEMBER FIRST, TWO THOUSAND EIGHT, at least ninety days before
a lender, AN ASSIGNEE or a mortgage loan servicer commences legal action
against the borrower, including mortgage foreclosure, [the] SUCH lender,
ASSIGNEE or mortgage loan servicer shall give notice to the borrower  in
at least fourteen-point type which shall include the following:
          "YOU COULD LOSE YOUR HOME. PLEASE READ THE FOLLOWING
                            NOTICE CAREFULLY"
  "As  of  ___,  your  home  loan is ___ days in default. Under New York
State Law, we are required to send you this notice to  inform  you  that
you are at risk of losing your home. You can cure this default by making
the payment of _____ dollars by ____.
  If  you  are  experiencing  financial difficulty, you should know that
there are several options available to you that may help you  keep  your
home.   Attached to this notice is a list of government approved housing
counseling agencies in your area which provide  free  or  very  low-cost
counseling.  You  should consider contacting one of these agencies imme-
diately. These agencies specialize in helping homeowners who are  facing
financial difficulty. Housing counselors can help you assess your finan-
cial  condition and work with us to explore the possibility of modifying
your loan, establishing an easier payment plan for you, or even  working

S. 5931--B                          5

out  a  period of loan forbearance. If you wish, you may also contact us
directly at __________ and ask to discuss possible options.
  While  we cannot assure that a mutually agreeable resolution is possi-
ble, we encourage you to take immediate steps to try to achieve a resol-
ution.  The longer you wait, the fewer options you may have.
  If this matter is not resolved within  90  days  from  the  date  this
notice  was  mailed, we may commence legal action against you (or sooner
if you cease to live in the dwelling as your primary residence.)
  If you need further information, please call the New York State  Bank-
ing  Department's  toll-free helpline at 1-877-BANK-NYS (1-877-226-5697)
or visit the Department's website at http://www.banking.state.ny.us"
  2. Such notice shall be sent by [the] SUCH lender, ASSIGNEE  or  mort-
gage  loan servicer to the borrower, by registered or certified mail and
also by first-class mail to the last known address of the borrower,  and
if  different, to the residence [which] THAT is the subject of the mort-
gage.  SUCH NOTICE SHALL BE SENT BY THE  LENDER,  ASSIGNEE  OR  MORTGAGE
LOAN  SERVICER  IN A SEPARATE ENVELOPE FROM ANY OTHER MAILING OR NOTICE.
Notice is considered given as of the date it is mailed. The notice shall
contain a list of at least five [United States department of housing and
urban development approved housing counseling agencies, or other]  hous-
ing  counseling  agencies  as  designated by the division of housing and
community renewal, that serve the region where the borrower resides. The
list shall include the counseling agencies'  last  known  addresses  and
telephone  numbers.  The banking department [and/or] AND the division of
housing and community renewal shall make available ON  THEIR  RESPECTIVE
WEBSITES  a  listing,  by  region,  of  such agencies [which the].   THE
lender, ASSIGNEE or mortgage loan servicer [may]  SHALL  use  EITHER  OF
THESE LISTS to meet the requirements of this section.
  5.  (a) ["Annual percentage rate" means the annual percentage rate for
the loan calculated according to the provisions of the Federal Truth-in-
Lending Act (15 U.S.C. S 1601, et seq.), and the regulations promulgated
thereunder by the federal reserve board (as said act and regulations are
amended from time to time).
  (b)] "Home loan" means a [home] loan,  including  an  open-end  credit
plan, other than a reverse mortgage transaction, in which:
  (i)  [The  principal  amount of the loan at origination did not exceed
the conforming loan size that was in existence at  the  time  of  origi-
nation  for a comparable dwelling as established by the federal national
mortgage association;
  (ii)] The borrower is a natural person;
  [(iii)] (II) The debt  is  incurred  by  the  borrower  primarily  for
personal, family, or household purposes;
  [(iv)]  (III)  The  loan  is secured by a mortgage or deed of trust on
real estate [upon which there is located or there is  to  be  located  a
structure  or  structures intended principally for occupancy of from one
to four families which is or will be occupied by  the  borrower  as  the
borrower's  principal  dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELL-
ING, OR A CONDOMINIUM UNIT, OR BY ANY  CERTIFICATE  OF  STOCK  OR  OTHER
EVIDENCE  OF  OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A CORPORATION,
PARTNERSHIP OR OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNER-
SHIP OF REAL ESTATE, IN EITHER CASE, USED OR OCCUPIED, OR INTENDED TO BE
USED OR OCCUPIED WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE  OF  ONE  OR
MORE  PERSONS  AND  WHICH  IS OR WILL BE OCCUPIED BY THE BORROWER AS THE
BORROWER'S PRINCIPAL DWELLING; and
  [(v)] (IV) The property is located in this state.

S. 5931--B                          6

  [(c) "Subprime home loan" for the purposes of this  section,  means  a
home  loan  consummated  between  January  first, two thousand three and
September first, two thousand eight in  which  the  terms  of  the  loan
exceed  the threshold as defined in paragraph (d) of this subdivision. A
subprime  home  loan  excludes  a  transaction  to  finance  the initial
construction of a dwelling, a temporary or "bridge" loan with a term  of
twelve  months  or less, such as a loan to purchase a new dwelling where
the borrower plans to sell a current dwelling within twelve months, or a
home equity line of credit.
  (d) "Threshold" means, for a first  lien  mortgage  loan,  the  annual
percentage  rate  of  the  home  loan at consummation of the transaction
exceeds three percentage points over the yield  on  treasury  securities
having  comparable  periods of maturity to the loan maturity measured as
of the fifteenth day of the month in which the loan was consummated;  or
for  a subordinate mortgage lien, the annual percentage rate of the home
loan at consummation of the transaction equals or exceeds five  percent-
age points over the yield on treasury securities having comparable peri-
ods  of maturity on the fifteenth day of the month in which the loan was
consummated; as determined by the following rules: if the terms  of  the
home  loan  offer  any  initial  or  introductory period, and the annual
percentage rate is less than that which will apply after the end of such
initial or introductory period, then the  annual  percentage  rate  that
shall  be  taken  into account for purposes of this section shall be the
rate which applies after the initial or introductory period.
  (e) "Non-traditional home loan" shall mean a payment option adjustable
rate mortgage or an  interest  only  loan  consummated  between  January
first, two thousand three and September first, two thousand eight.
  (f)  For purposes of determining the threshold, the banking department
shall publish on its website a listing of constant maturity  yields  for
U.S. Treasury securities for each month between January first, two thou-
sand  three and September first, two thousand eight, as published in the
Federal Reserve Statistical Release on selected interest rates, commonly
referred to as the H.15 release, in the  following  maturities,  to  the
extent  available  in such release: six month, one year, two year, three
year, five year, seven year, ten year, thirty year.
  (g)] (B) "Lender" means a mortgage banker as defined in paragraph  (f)
of  subdivision one of section five hundred ninety of the banking law or
an exempt organization as defined in paragraph (e) of subdivision one of
section five hundred ninety of the banking law.
  S 5. The real property actions  and  proceedings  law  is  amended  by
adding a new section 1305 to read as follows:
  S  1305.  NOTICE  TO TENANTS. 1. DEFINITIONS. FOR THE PURPOSES OF THIS
SECTION, THE FOLLOWING DEFINITIONS SHALL APPLY:
  (A) "RESIDENTIAL REAL PROPERTY" SHALL MEAN REAL  PROPERTY  LOCATED  IN
THIS STATE IMPROVED BY ANY BUILDING OR STRUCTURE THAT IS OR MAY BE USED,
IN  WHOLE  OR  IN PART, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS,
AND SHALL INCLUDE ANY BUILDING OR STRUCTURE USED  FOR  BOTH  RESIDENTIAL
AND COMMERCIAL PURPOSES.
  (B)  "SUCCESSOR  IN  INTEREST"  SHALL MEAN ANY PERSON OR ENTITY WHO OR
WHICH ACQUIRES TITLE IN A RESIDENTIAL REAL PROPERTY PURSUANT TO A  JUDG-
MENT  OF  SALE, OR OTHER DISPOSITION DURING THE PENDENCY OF THE FORECLO-
SURE PROCEEDING, OR AT ANY TIME THEREAFTER BUT PRIOR TO  THE  EXPIRATION
OF THE TIME PERIOD AS PROVIDED FOR IN SUBDIVISION TWO OF THIS SECTION.
  (C)  "TENANT"  SHALL  MEAN ANY PERSON WHO AT THE TIME OF A JUDGMENT OF
SALE, OR OTHER DISPOSITION  DURING  THE  PENDENCY  OF  THE  FORECLOSURE,
APPEARS  AS A LESSEE ON A LEASE OF ONE OR MORE DWELLING UNITS OF A RESI-

S. 5931--B                          7

DENTIAL REAL PROPERTY THAT IS SUBORDINATE TO THE MORTGAGE ON SUCH  RESI-
DENTIAL  REAL  PROPERTY;  OR WHO IS A PARTY TO AN ORAL OR IMPLIED RENTAL
AGREEMENT WITH THE MORTGAGOR AND OBLIGATED TO PAY RENT TO THE  MORTGAGOR
OR  SUCH  MORTGAGOR'S REPRESENTATIVE, FOR THE USE OR OCCUPANCY OF ONE OR
MORE DWELLING UNITS OF A RESIDENTIAL REAL PROPERTY.
  2. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, IN A MORTGAGE  FORECLO-
SURE  ACTION,  WHICH  INVOLVES  RESIDENTIAL  REAL  PROPERTY DWELLINGS, A
PLAINTIFF UPON COMMENCEMENT OF  THE  ACTION  OR  DISCONTINUANCE  OF  THE
ACTION,  THE  PREVAILING PLAINTIFF, A PLAINTIFF TAKING A DEED IN LIEU OF
FORECLOSURE, A RECEIVER APPOINTED IN SUCH ACTION, A PURCHASER  FROM  THE
MORTGAGOR  OR THE PURCHASER AT A FORECLOSURE SALE PURSUANT TO A JUDGMENT
OF FORECLOSURE SHALL PROVIDE NOTICE OF THE DATE OF EVERY SUCH OCCURRENCE
TO ANY TENANT RESIDING IN  SUCH  PROPERTY  WITHIN  THIRTY  DAYS  OF  THE
COMMENCEMENT  OF  THE  ACTION, DISCONTINUANCE OF THE ACTION, JUDGMENT OF
FORECLOSURE, APPOINTMENT OF A RECEIVER OR THE CLOSING OF TITLE  PURSUANT
TO A FORECLOSURE SALE OR OTHER DISPOSITION.  THEREAFTER, UNTIL THE CLOS-
ING  OF TITLE PURSUANT TO A FORECLOSURE SALE OR OTHER DISPOSITION OF THE
PROPERTY, SUCH NOTICE OF EVERY SUCH OCCURRENCE SHALL ALSO BE PROVIDED TO
A NEW TENANT AT THE TIME SUCH NEW TENANT ENTERS INTO A  LEASE  OR  OTHER
RENTAL AGREEMENT AND THEREAFTER FOR A DWELLING UNIT IN THE PROPERTY.
  3.  THE  NOTICE  SHALL ADVISE THE TENANT OF THE OCCURRENCE OF AN EVENT
DESCRIBED IN SUBDIVISION TWO OF THIS SECTION, AS WELL AS  OF  THE  NAME,
ADDRESS  AND  TELEPHONE  NUMBER  OF THE PERSON OR ENTITY RESPONSIBLE FOR
MAINTENANCE OF THE PROPERTY  AND  ENTITLED  TO  COLLECT  RENT  FROM  THE
TENANT.
  4.  FOR BUILDINGS WITH FEWER THAN SIX DWELLING UNITS, THE NOTICE SHALL
BE PERSONALLY SERVED UPON THE  TENANT,  OR  SERVED  BY  CERTIFIED  MAIL,
RETURN  RECEIPT  REQUESTED, AND ALSO BY FIRST-CLASS MAIL TO THE TENANT'S
ADDRESS AT THE PROPERTY. THE NOTICE SHALL BE ACCOMPANIED BY AN  ACKNOWL-
EDGEMENT  OF  SERVICE THAT SHALL BE SIGNED BY THE TENANT SO SERVED. IF A
TENANT REFUSES TO SIGN THE ACKNOWLEDGEMENT OF SERVICE, THE SERVING PARTY
MAY FILE WITH A COURT A SWORN AFFIDAVIT STATING THE MANNER IN WHICH  THE
TENANT  WAS  SERVED AND THAT THE TENANT REFUSED TO SIGN SUCH ACKNOWLEDG-
MENT.  FOR BUILDINGS WITH SIX OR MORE DWELLING UNITS, A LEGIBLE COPY  OF
THE NOTICE SHALL BE POSTED AT EACH ENTRANCE AND EXIT OF THE BUILDING.
  5.  A  TENANT WHO IS NOT SERVED BY THE NOTICE REQUIRED BY THIS SECTION
WITHIN THE TIME PERIOD FOR SERVICE OF SUCH NOTICE SHALL  NOT  BE  LIABLE
FOR  ANY  RENT FROM THE EXPIRATION OF SUCH TIME PERIOD UNTIL SUCH NOTICE
IS DULY SERVED UPON SUCH TENANT.
  6. A TENANT ENTITLED TO NOTICE PURSUANT TO THIS SECTION SHALL  NOT  BE
SUBJECT  TO  AN  EXECUTION PURSUANT TO SECTION TWO HUNDRED TWENTY-ONE OF
THIS CHAPTER OR SECTION FIFTY-ONE HUNDRED TWO OF THE CIVIL PRACTICE  LAW
AND RULES OR BE MADE A DEFENDANT OR RESPONDENT IN ANY ACTION OR PROCEED-
ING  SEEKING  POSSESSION OF SUCH TENANT'S DWELLING UNIT BROUGHT PURSUANT
TO SECTION SEVEN HUNDRED THIRTEEN-B OF THIS CHAPTER UNLESS  SUCH  TENANT
WAS  PREVIOUSLY  SERVED  WITH  THE  NOTICE REQUIRED BY THIS SECTION. THE
NOTICE REQUIRED BY THIS SECTION SHALL BE IN ADDITION TO THE  NOTICES  TO
QUIT  REQUIRED  BY  SECTION  TWO  HUNDRED  TWENTY-ONE  AND SECTION SEVEN
HUNDRED THIRTEEN-B OF THIS CHAPTER OR SECTION FIFTY-ONE HUNDRED  TWO  OF
THE CIVIL PRACTICE LAW AND RULES.
  7.  ANY PROVISION OF A LEASE OR RENTAL AGREEMENT PURPORTING TO WAIVE A
PROVISION OF THIS SECTION IS NULL AND VOID.
  8. THE RIGHTS CONFERRED UPON A  TENANT  BY  SUBDIVISION  TWO  OF  THIS
SECTION  SHALL  BE IN ADDITION TO ANY OTHER RIGHTS OF SUCH TENANT, UNDER
LAW, INCLUDING THOSE RIGHTS CONFERRED UPON:  (A) ANY TENANT NOT NAMED IN
THE FORECLOSURE ACTION; OR (B) ANY TENANT WHOSE TENANCY IS SUBSIDIZED BY

S. 5931--B                          8

THE FEDERAL GOVERNMENT, THIS STATE OR ANY POLITICAL SUBDIVISION OF  THIS
STATE;  OR (C) ANY TENANT WHOSE TENANCY IS SUBJECT TO RENT CONTROL, RENT
STABILIZATION, OR FEDERAL STATUTORY SCHEMES.
  S  6.  The  real  property  actions  and proceedings law is amended by
adding a new section 1306 to read as follows:
  S 1306. REGULATORY FILING. 1.  EACH LENDER, ASSIGNEE OR MORTGAGE  LOAN
SERVICER  SHALL  FILE  WITH THE SUPERINTENDENT OF BANKS (SUPERINTENDENT)
WITHIN THREE BUSINESS DAYS OF THE MAILING  OF  THE  NOTICE  REQUIRED  BY
SUBDIVISION  ONE  OF  SECTION  THIRTEEN HUNDRED FOUR OF THIS ARTICLE THE
INFORMATION REQUIRED BY SUBDIVISION TWO OF THIS SECTION.   NOTWITHSTAND-
ING  ANY OTHER PROVISION OF THE LAWS OF THIS STATE, THIS FILING SHALL BE
MADE ELECTRONICALLY  AS  PROVIDED  FOR  IN  SUBDIVISION  THREE  OF  THIS
SECTION.    ANY  COMPLAINT  SERVED IN A PROCEEDING INITIATED PURSUANT TO
THIS ARTICLE SHALL CONTAIN, AS A CONDITION PRECEDENT TO SUCH PROCEEDING,
AN AFFIRMATIVE ALLEGATION THAT AT THE TIME THE PROCEEDING IS  COMMENCED,
THE PLAINTIFF HAS COMPLIED WITH THE PROVISIONS OF THIS SECTION.
  2.  EACH  FILING DELIVERED TO THE SUPERINTENDENT SHALL BE ON SUCH FORM
AS THE SUPERINTENDENT SHALL PRESCRIBE, AND SHALL INCLUDE AT  A  MINIMUM,
THE  NAME, ADDRESS, LAST KNOWN TELEPHONE NUMBER OF THE BORROWER, AND THE
AMOUNT CLAIMED AS DUE AND OWING ON THE MORTGAGE, AND SUCH INFORMATION AS
WILL ENABLE THE SUPERINTENDENT TO ASCERTAIN THE TYPE OF LOAN  AT  ISSUE.
THE  SUPERINTENDENT MAY SUBSEQUENTLY REQUEST SUCH FURTHER INFORMATION AS
MAY BE REASONABLY NECESSARY  TO  FACILITATE  A  REVIEW  OF  WHETHER  THE
BORROWER  MIGHT  BENEFIT FROM COUNSELING OR OTHER FORECLOSURE PREVENTION
SERVICES.
  3. WITHIN ONE HUNDRED EIGHTY DAYS OF THE EFFECTIVE DATE OF THIS SUBDI-
VISION, OR SUCH LATER TIME AS  THE  SUPERINTENDENT  MAY  DETERMINE,  THE
SUPERINTENDENT  SHALL DEVELOP WITH THE ASSISTANCE OF THE COMMISSIONER OF
THE DIVISION OF HOUSING AND COMMUNITY RENEWAL,  AN  ELECTRONIC  DATABASE
THAT SHALL BE CAPABLE OF RECEIVING ALL FILINGS REQUIRED BY THIS SECTION.
  4.  THE  INFORMATION  PROVIDED  TO THE SUPERINTENDENT PURSUANT TO THIS
SUBDIVISION SHALL NOT BE SUBJECT TO ARTICLE SIX OF THE  PUBLIC  OFFICERS
LAW OR PARAGRAPHS (A), (C) AND (D) OF SUBDIVISION ONE OR SUBDIVISION SIX
OF SECTION NINETY-FOUR OF THE PUBLIC OFFICERS LAW.  ALL SUCH INFORMATION
SHALL  BE  USED  BY  THE  SUPERINTENDENT EXCLUSIVELY FOR THE PURPOSES OF
MONITORING ON A STATEWIDE BASIS THE EXTENT OF FORECLOSURE FILINGS WITHIN
THIS STATE, TO PERFORM AN ANALYSIS OF LOAN TYPES WHICH WERE THE  SUBJECT
OF  A  PRE-FORECLOSURE  NOTICE  AND  DIRECTING  AS APPROPRIATE AVAILABLE
PUBLIC AND PRIVATE FORECLOSURE PREVENTION  AND  COUNSELING  SERVICES  TO
BORROWERS  AT RISK OF FORECLOSURE. THE SUPERINTENDENT MAY SHARE INFORMA-
TION CONTAINED IN THE DATABASE WITH HOUSING COUNSELING  AGENCIES  DESIG-
NATED  BY  THE DIVISION OF HOUSING AND COMMUNITY RENEWAL AS WELL AS WITH
OTHER STATE AGENCIES WITH JURISDICTION OVER HOUSING, FOR THE PURPOSE  OF
COORDINATING OR SECURING HELP FOR BORROWERS AT RISK OF FORECLOSURE.
  5.  THE  SUPERINTENDENT  IS HEREBY AUTHORIZED TO PROMULGATE SUCH RULES
AND REGULATIONS AS SHALL BE NECESSARY TO IMPLEMENT THE PURPOSES OF  THIS
SECTION.
  S  7.  The  real  property  actions  and proceedings law is amended by
adding a new section 1307 to read as follows:
  S 1307. DUTY TO MAINTAIN FORECLOSED PROPERTY.  1. WHERE A FINAL  JUDG-
MENT  OF FORECLOSURE IS AWARDED TO A MORTGAGEE OF A RESIDENTIAL DWELLING
OF ONE TO FOUR FAMILIES AND THE STRUCTURE HAS BEEN  RENDERED  VACANT  OR
ABANDONED BY ALL OCCUPANTS WITH A PREVIOUS LEGAL RIGHT TO THE STRUCTURE,
IT  SHALL BE THE DUTY OF THE MORTGAGEE FROM THE TIME OF VACANCY OR ABAN-
DONMENT OF SUCH STRUCTURE AND JUDGMENT OF FORECLOSURE, WHICHEVER  OCCURS
LATER,  TO  MAINTAIN  SUCH  VACANT STRUCTURES AND EXTERIOR PROPERTY IN A

S. 5931--B                          9

CLEAN, SAFE, SECURE AND SANITARY CONDITION SO AS NOT TO CAUSE A  BLIGHT-
ING PROBLEM OR ADVERSELY AFFECT PUBLIC HEALTH OR SAFETY. ABANDONED MEANS
A  PROPERTY  THAT  IS  VACANT  AS  A  RESULT  OF  THE  RELINQUISHMENT OF
POSSESSION  OR CONTROL BY A MORTGAGOR OR THE MORTGAGOR'S ASSIGNS WHETHER
OR NOT THE MORTGAGOR OR MORTGAGOR'S ASSIGNS HAVE RELINQUISHED EQUITY AND
TITLE.   PROPERTY MAY BE DEEMED ABANDONED  WHEN  THERE  IS  EVIDENCE  OF
CONDITIONS, TAKEN SEPARATELY OR AS A WHOLE, THAT WOULD LEAD A REASONABLE
PERSON  TO  CONCLUDE  THAT THE PROPERTY WAS ABANDONED INCLUDING, BUT NOT
LIMITED TO EVIDENCE OF OVERGROWN OR  DEAD  VEGETATION,  ACCUMULATION  OF
NEWSPAPERS, CIRCULARS, FLYERS OR MAIL, PAST DUE UTILITY NOTICES, ACCUMU-
LATION  OF  JUNK,  LITTER, TRASH OR DEBRIS, ABSENCE OF WINDOW TREATMENTS
SUCH AS  BLINDS,  CURTAINS  OR  SHUTTERS,  ABSENCE  OF  FURNISHINGS  AND
PERSONAL ITEMS, AND STATEMENTS BY NEIGHBORS, DELIVERY AGENTS OR SIMILAR-
LY SITUATED PERSONS THAT THE PROPERTY IS VACANT. VACANT PREMISES MEANS A
BUILDING THAT IS NOT LAWFULLY OCCUPIED.
  2. THE MINIMUM STANDARD THE MORTGAGEE WILL BE REQUIRED TO MEET IS THAT
SET  FORTH  IN THE NEW YORK STATE PROPERTY MAINTENANCE CODE CHAPTER 3 SS
301.3, 302 (EXCLUDING  302.6),  304.1,  304.3,  304.7,  304.10,  304.12,
304.13, 304.15, 304.16, 304.17, 307.1, AND 308.1.
  3. THE MORTGAGEE SHALL HAVE THE RIGHT TO ENTER THE STRUCTURE AND EXTE-
RIOR  PROPERTY  OR  TO  CAUSE  OTHERS  TO ENTER THE SAME FOR THE LIMITED
PURPOSE OF INSPECTION,  REPAIR  AND  MAINTENANCE  AS  REQUIRED  BY  THIS
SECTION, IN ADDITION TO ANY OTHER RIGHT PROVIDED IN THE MORTGAGE NOTE.
  4.  THIS  SECTION  SHALL  BE ENFORCED BY THE MUNICIPALITY IN WHICH THE
STRUCTURE IS LOCATED. A VIOLATOR OF THIS SECTION WILL BE FINED  PURSUANT
TO  THAT  MUNICIPALITY'S  FINE  SCHEDULE  PURSUANT TO THE NEW YORK STATE
PROPERTY MAINTENANCE CODE OR, IF NO SUCH FINE  EXISTS,  A  VIOLATION  IS
PUNISHABLE  WITH  A  FINE OF UP TO ONE HUNDRED DOLLARS PER DAY, PROVIDED
THAT SUCH MUNICIPALITY HAS GIVEN NOTICE OF THE VIOLATION IN WRITING  AND
BY  CERTIFIED  MAIL,  TO THE MORTGAGEE AND PROVIDED THE MORTGAGEE TWENTY
DAYS FROM RECEIPT OF THE NOTICE TO CORRECT THE VIOLATION. THE FINE WOULD
NOT BEGIN TO ACCRUE UNTIL EXPIRATION OF TWENTY DAYS.
  5. UPON A FAILURE TO CORRECT VIOLATIONS WITHIN TWENTY DAYS OF  NOTICE,
THE  LOCALITY  MAY  ENTER THE STRUCTURE AND EXTERIOR PROPERTY TO CORRECT
THE VIOLATIONS AND BILL MORTGAGEE FOR THE REASONABLE COST OF THE SAME.
  6. THIS SECTION SETS FORTH THE MINIMUM OBLIGATIONS AS REQUIRED BY  THE
NEW  YORK  STATE  PROPERTY  MAINTENANCE  CODE AND IN NO WAY ABROGATES OR
DIMINISHES ANY RIGHTS OR OBLIGATIONS ALREADY ESTABLISHED  BY  THE  LOCAL
MUNICIPALITY  AND/OR  HOMEOWNERS  ASSOCIATIONS WITH REGARDS TO VACANT OR
ABANDONED PROPERTY.
  7. A MORTGAGEE WILL BE RELIEVED OF OBLIGATIONS UNDER THIS  SECTION  IF
AND  WHEN  OWNERSHIP  OF  THE PROPERTY IS TRANSFERRED BY DEED TO ANOTHER
PARTY OR THE PROPERTY BECOMES LEGALLY OCCUPIED.
  S 8. The real property actions  and  proceedings  law  is  amended  by
adding a new section 1308 to read as follows:
  S  1308.  FORECLOSURES; COURT RELIEF. 1. VENUE. IN ANY ACTION TO FORE-
CLOSE A RESIDENTIAL MORTGAGE UNDER THIS ARTICLE  A  MORTGAGOR  NAMED  IN
SUCH ACTION MAY APPLY FOR RELIEF IN STATE SUPREME COURT PURSUANT TO THIS
SECTION.
  2.  TIMING  OF  POSTPONEMENT. IF A MORTGAGEE HAS OTHERWISE ESTABLISHED
ITS LEGAL RIGHT TO JUDGMENT ON AN  ACTION  TO  FORECLOSE  A  RESIDENTIAL
MORTGAGE  PURSUANT  TO  THIS  CHAPTER, THEN SUCH ACTION SHALL BE HELD IN
ABEYANCE BY THE COURT BEFORE WHICH SUCH ACTION IS PENDING FOR  A  PERIOD
OF NINETY DAYS. IF THE MORTGAGOR RECEIVES COUNSELING FROM A NOT-FOR-PRO-
FIT  ASSISTANCE  PROVIDER  APPROVED  BY  THE  DIVISION  AND SUBSEQUENTLY
PARTICIPATES IN A SETTLEMENT CONFERENCE, THEN  THE  COURT  BEFORE  WHICH

S. 5931--B                         10

SUCH  ACTION  IS PENDING SHALL HOLD SUCH ACTION IN ABEYANCE FOR AN ADDI-
TIONAL NINE MONTHS. SUCH ADDITIONAL PERIOD OF TIME IS INTENDED TO PERMIT
THE PARTIES TO SETTLE THE ACTION OUTSIDE OF COURT AND TO FORESTALL FORE-
CLOSURE WHEREVER POSSIBLE.
  3.  PROCESS AND FEES. IF AN ACTION TO FORECLOSE A RESIDENTIAL MORTGAGE
HAS BEEN COMMENCED PRIOR TO THE EFFECTIVE DATE OF THIS SECTION, A  MORT-
GAGOR  MAY  ASK  THE COURT BEFORE WHICH SUCH ACTION IS COMMENCED TO HOLD
SUCH ACTION IN ABEYANCE PURSUANT TO SUBDIVISION  TWO  OF  THIS  SECTION.
MOTIONS  ON  NOTICE  IN ACCORDANCE WITH THE CIVIL PRACTICE LAW AND RULES
MADE BY THE MORTGAGOR SHALL BE DEEMED TO  HAVE  BEEN  FILED  BY  A  POOR
PERSON  PURSUANT  TO  ARTICLE ELEVEN OF THE CIVIL PRACTICE LAW AND RULES
AND ALL COURT FEES OTHERWISE APPLICABLE TO SUCH ACTIONS AND PAYABLE BY A
MORTGAGOR SHALL  BE  WAIVED.  IF  A  FORECLOSURE  ACTION  HAS  NOT  BEEN
COMMENCED  PRIOR TO THE EFFECTIVE DATE OF THIS SECTION, A MORTGAGOR MUST
COMMENCE AN ACTION IN STATE  SUPREME  COURT  BY  FILING  AND  SERVING  A
SUMMONS  PURSUANT  TO  ARTICLE THREE OF THE CIVIL PRACTICE LAW AND RULES
WITH A REQUEST FOR RELIEF PURSUANT TO THE TERMS OF THIS SECTION. IN SUCH
CASE, SUCH FILING SHALL BE DEEMED TO HAVE BEEN FILED BY  A  POOR  PERSON
PURSUANT  TO  ARTICLE ELEVEN OF THE CIVIL PRACTICE LAW AND RULES AND ALL
FILING AND COURT FEES OTHERWISE APPLICABLE TO SUCH ACTIONS  AND  PAYABLE
BY A MORTGAGOR IN THE FORM OF INDEX AND MOTION FEES SHALL BE WAIVED.
  4.  PRIMA FACIE CASE. A MORTGAGOR MUST ESTABLISH A PRIMA FACIE CASE IN
THE MOTION OR PLEADING. AMENDMENTS TO SUCH MOTION OR PLEADING  SHALL  BE
LIBERALLY GRANTED. SUCH PLEADING MUST ESTABLISH THAT:
  A. THE MORTGAGOR IS A NATURAL PERSON; AND
  B. THE DEBT IS INCURRED BY THE MORTGAGOR PRIMARILY FOR PERSONAL, FAMI-
LY OR HOUSEHOLD PURPOSES; AND
  C.  THE  LOAN IS SECURED BY A MORTGAGE, SECOND MORTGAGE OR HOME EQUITY
LOAN ON REAL PROPERTY WHICH IS  IMPROVED  WITH  A  RESIDENTIAL  BUILDING
CONTAINING ONE TO FOUR DWELLING UNITS; AND
  D. THE REAL PROPERTY SUBJECT TO FORECLOSURE IS THE PRINCIPAL RESIDENCE
OF THE MORTGAGOR; AND
  E. THE MORTGAGOR OWNS NO OTHER REAL PROPERTY; AND
  F. THE REAL PROPERTY IS LOCATED IN THIS STATE.
  5.  MONTHLY  PAYMENT  SCHEDULE.  IF A PRIMA FACIE CASE HAS BEEN ESTAB-
LISHED, THE COURT OFFICER OR  MEDIATOR  PRESIDING  OVER  THE  SETTLEMENT
CONFERENCE  SET  FORTH  IN  RULE  THIRTY-FOUR HUNDRED EIGHT OF THE CIVIL
PRACTICE LAW AND RULES SHALL WORK WITH  THE  PARTIES  TO  ESTABLISH  THE
TERMS  OF  A  MONTHLY  PAYMENT SCHEDULE WHICH WILL PRESERVE THE RELATIVE
FINANCIAL INTERESTS OF BOTH PARTIES UNDER TERMS WHICH ARE EQUITABLE  AND
JUST. TOWARDS THAT END, THE COURT OFFICER OR MEDIATOR SHALL INQUIRE INTO
THE  FINANCES  OF  BOTH  THE MORTGAGEE AND THE MORTGAGOR. THE PURPOSE OF
SUCH INQUIRY SHALL BE TO DETERMINE THE MINIMUM AMOUNT NECESSARY TO MAIN-
TAIN THE MORTGAGEE'S FINANCIAL POSITION  AND  TO  DETERMINE  THE  AMOUNT
WHICH  THE MORTGAGOR WILL BE ABLE TO AFFORD. SUCH MONTHLY PAYMENTS SHALL
BE APPLIED TO THE PRINCIPAL AND INTEREST UPON THE INDEBTEDNESS.  IF  THE
FINANCIAL  CONDITION  OF THE MORTGAGOR EXCEEDS THE MINIMUM AMOUNT NECES-
SARY TO MAINTAIN THE FINANCIAL POSITION OF THE MORTGAGEE,  SUCH  MONTHLY
AMOUNT  MAY  BE INCREASED BEYOND THE MINIMUM AMOUNT AS DETERMINED WITHIN
THE DISCRETION OF THE COURT OFFICER OR MEDIATOR. IT IS WITHIN THE  COURT
OFFICER'S  OR  MEDIATOR'S DISCRETION TO DETERMINE WHETHER THE ESTABLISH-
MENT OF SUCH PAYMENT SCHEDULE IS POSSIBLE UNDER TERMS WHICH ARE  EQUITA-
BLE  AND  JUST.  THE PURPOSE OF SUCH MONTHLY PAYMENTS IS TO PRESERVE THE
RELATIVE FINANCIAL INTERESTS OF BOTH PARTIES UNTIL A SETTLEMENT  CAN  BE
REACHED  BUT IN NO EVENT SHALL SUCH ORDER GOVERN FOR MORE THAN ONE YEAR.

S. 5931--B                         11

FAILURE TO ADHERE TO THE TERMS OF SUCH SCHEDULE MAY ALSO RESULT IN FORE-
CLOSURE OR LIFTING OF THE ABEYANCE.
  6. POSTPONEMENT ORDER. ONCE THE COURT DETERMINES THAT AN EQUITABLE AND
JUST  PAYMENT SCHEDULE CAN BE ESTABLISHED, IT SHALL ISSUE AN ORDER WHICH
SETS FORTH THE TERMS OF SUCH PAYMENT SCHEDULE  AND  SERVE  IT  UPON  ALL
PARTIES  TO THE PROCEEDING. SUCH ORDER SHALL SET FORTH A RETURN DATE FOR
THE RE-EXAMINATION OF SUCH MATTER AFTER PASSAGE OF THE POSTPONEMENT TIME
PERIOD AT A FORMAL HEARING ON NOTICE  TO  THE  PARTIES.  THE  COURT  MAY
TAILOR  RELIEF  AS  REQUIRED BY THE FACTS OF EACH CASE THAT FALLS WITHIN
THE PURVIEW OF THIS SECTION. HOWEVER, IN NO EVENT SHALL SUCH ORDER POST-
PONE FINAL ACTION BEYOND  ONE  YEAR  WITHOUT  A  RE-EXAMINATION  OF  THE
PARTIES'  FINANCIAL  CIRCUMSTANCES AFTER FORMAL HEARING ON NOTICE TO THE
PARTIES. THE TIME PERIOD OF SUCH ORDER SHALL RUN FROM THE  DATE  OF  THE
ENTRY OF SUCH ORDER. SUCH ABEYANCE SHALL NOT BEGIN UNTIL THE FORECLOSURE
PROCESS  HAS  REACHED  THE POINT WHERE A FINAL DETERMINATION IS POSSIBLE
BUT SHALL BE WITHHELD UNTIL THE POSTPONEMENT PERIOD HAS  ELAPSED.  ENTI-
TLEMENT  TO  SUCH  ABEYANCE MAY BE ESTABLISHED AT ANY TIME REGARDLESS OF
WHETHER FORECLOSURE IS BEING SOUGHT BY THE MORTGAGEE. MULTIPLE POSTPONE-
MENTS MAY BE GRANTED IN THE DISCRETION OF THE COURT IF WARRANTED BY  THE
FACTS OF A GIVEN CASE AND THE ECONOMIC CONDITIONS ACROSS THE STATE.
  7. CONTINUING JURISDICTION. THE COURT SHALL MAINTAIN CONTINUING JURIS-
DICTION OF THE MATTER UNTIL IT REACHES FINAL RESOLUTION. UPON THE APPLI-
CATION  OF  EITHER  PARTY,  PRIOR  TO THE EXPIRATION OF THE POSTPONEMENT
PERIOD, UPON PRESENTATION OF EVIDENCE THAT THE TERMS FIXED BY THE  COURT
ARE  NO  LONGER  JUST AND EQUITABLE, THE COURT MAY REVISE AND ALTER SUCH
TERMS IN SUCH MANNER AS THE CHANGED  CIRCUMSTANCES  AND  CONDITIONS  MAY
REQUIRE.
  S  9. Section 1311 of the real property actions and proceedings law is
amended by adding two new subdivisions 5 and 6 to read as follows:
  5.  A PERSON MAY NOT BE NAMED AS A PARTY DEFENDANT BY USE OF A PSEUDO-
NYM UNLESS PLAINTIFF HAS SUBMITTED TO THE COURT AN  AFFIDAVIT  ATTESTING
TO THE INQUIRY UNDERTAKEN SO AS TO DEMONSTRATE THAT REASONABLE AND DILI-
GENT EFFORTS WERE MADE TO ASCERTAIN THE IDENTITY OF SUCH DEFENDANT.
  6.  THE  TENANCY  OF A TENANT WHO IS NOT NAMED AS A PARTY DEFENDANT IN
THE ACTION SHALL NOT BE AFFECTED IN ANY  WAY  BY  THE  JUDGMENT  IN  THE
ACTION.  THE  INTEREST OF THE PREVAILING PLAINTIFF IN THE ACTION AND ANY
PURCHASER PURSUANT TO A FORECLOSURE SALE SHALL BE SUBJECT TO THE  INTER-
EST OF ANY SUCH TENANT.
  S  10.  The  real  property  actions and proceedings law is amended by
adding a new section 1316 to read as follows:
  S 1316.   THE COURT SHALL NOTIFY  THE  DEFENDANT  OF  ANY  FORECLOSURE
ACTION ON A RESIDENTIAL MORTGAGE LOAN, IN WHICH THE ACTION WAS INITIATED
BUT WHERE THE FINAL ORDER OF JUDGMENT WAS NOT ISSUED PRIOR TO THE EFFEC-
TIVE  DATE OF THIS SECTION, THAT SUCH DEFENDANT MAY REQUEST A SETTLEMENT
CONFERENCE IN ACCORDANCE WITH RULE  THIRTY-FOUR  HUNDRED  EIGHT  OF  THE
CIVIL PRACTICE LAW AND RULES.
  S 11. Section 1351 of the real property actions and proceedings law is
amended by adding a new subdivision 4 to read as follows:
  4.  THE  TENANCY  OF A TENANT WHO IS NOT NAMED AS A PARTY DEFENDANT IN
THE ACTION SHALL NOT BE AFFECTED IN ANY  WAY  BY  THE  JUDGMENT  IN  THE
ACTION.  THE  INTEREST OF THE PREVAILING PLAINTIFF IN THE ACTION AND ANY
PURCHASER PURSUANT TO A FORECLOSURE SALE SHALL BE SUBJECT TO THE  INTER-
EST OF ANY SUCH TENANT.
  S 12. Section 221 of the real property actions and proceedings law, as
added by chapter 312 of the laws of 1962, is amended to read as follows:

S. 5931--B                         12

  S  221.  Compelling  delivery of possession of real property.  Where a
judgment affecting the title to, or the possession, enjoyment or use of,
real property allots to any person a distinct parcel of  real  property,
or  contains a direction for the sale of real property, or confirms such
an  allotment or sale, it also may direct the delivery of the possession
of the property to the person entitled thereto, SUBJECT  TO  THE  RIGHTS
AND OBLIGATIONS SET FORTH IN SECTION THIRTEEN HUNDRED FIVE OF THIS CHAP-
TER.
  If  a  party,  or his representative or successor, who is bound by the
judgment, withholds possession from the person thus declared to be enti-
tled thereto, the court, by order, in its discretion, besides  punishing
the  disobedience  as  a  contempt,  may require the sheriff to put that
person into possession.  Such an order shall be executed as if  it  were
an  execution for the delivery of the possession of the property. IF THE
PROPERTY TO BE DELIVERED INCLUDES A DWELLING UNIT LOCATED IN A  RESIDEN-
TIAL  BUILDING,  THE JUDGMENT IN A FORECLOSURE ACTION SHALL PROVIDE THAT
ONLY AN OCCUPANT OF SUCH DWELLING UNIT WHO WAS NAMED AS A  DEFENDANT  IN
THE  FORECLOSURE  ACTION  AND WHO WAS SERVED WITH THE NOTICE REQUIRED BY
SECTION THIRTEEN HUNDRED THREE OF THIS CHAPTER  MAY  BE  SUBJECT  TO  AN
EXECUTION  DIRECTING  DELIVERY  OF  SUCH DWELLING UNIT AND SUCH OCCUPANT
SHALL BE SERVED  WITH  A  NINETY-DAY  NOTICE  TO  QUIT,  IN  THE  MANNER
PRESCRIBED  IN  SECTION SEVEN HUNDRED THIRTY-FIVE OF THIS CHAPTER, PRIOR
TO THE EXECUTION OF THAT PART OF THE JUDGMENT THAT DIRECTS  DELIVERY  OF
POSSESSION OF THE DWELLING UNIT.
  S  13.  Subdivision  5 of section 713 of the real property actions and
proceedings law, as amended by chapter 642  of  the  laws  of  1976,  is
amended to read as follows:
  5.  [The]  SUBJECT  TO THE RIGHTS AND OBLIGATIONS SET FORTH IN SECTION
THIRTEEN HUNDRED FIVE OF THIS CHAPTER, THE property  has  been  sold  in
foreclosure  and  either  the deed delivered pursuant to such sale, or a
copy of such deed, certified as provided in the civil practice  law  and
rules,  has  been exhibited to [him] THE RESPONDENT WHO IS NOT THE OCCU-
PANT OF A DWELLING UNIT LOCATED IN A RESIDENTIAL BUILDING.
  S 14.  The real property actions and proceedings  law  is  amended  by
adding a new section 713-b to read as follows:
  S  713-B.   GROUNDS WHERE NO LANDLORD-TENANT RELATIONSHIP EXISTS AFTER
FORECLOSURE SALE OF RESIDENTIAL PROPERTY. A SPECIAL  PROCEEDING  MAY  BE
MAINTAINED  UNDER  THIS  ARTICLE TO OBTAIN POSSESSION OF A DWELLING UNIT
LOCATED IN A RESIDENTIAL BUILDING AFTER A NINETY-DAY NOTICE TO QUIT  HAS
BEEN  SERVED  UPON  THE  RESPONDENT  IN THE MANNER PRESCRIBED IN SECTION
SEVEN HUNDRED THIRTY-FIVE OF THIS ARTICLE, UPON  THE  FOLLOWING  GROUND:
THE  PROPERTY HAS BEEN SOLD IN FORECLOSURE AND RESPONDENT WAS NAMED AS A
DEFENDANT IN THE FORECLOSURE ACTION  AND  WAS  SERVED  WITH  THE  NOTICE
REQUIRED  BY  SECTION  THIRTEEN HUNDRED THREE OF THIS CHAPTER AND EITHER
THE DEED DELIVERED PURSUANT TO SUCH SALE, OR A COPY OF SUCH DEED, CERTI-
FIED AS PROVIDED IN THE CIVIL PRACTICE LAW AND RULES, HAS BEEN EXHIBITED
TO THE RESPONDENT.
  S 15.  Rule 3408 of the civil practice law and rules is REPEALED and a
new rule 3408 is added to read as follows:
  RULE 3408. MANDATORY SETTLEMENT CONFERENCE IN RESIDENTIAL  FORECLOSURE
ACTIONS. 1. IN ANY RESIDENTIAL FORECLOSURE ACTION IN WHICH THE DEFENDANT
IS  A  RESIDENT  OF THE PROPERTY SUBJECT TO FORECLOSURE, THE COURT SHALL
HOLD A MANDATORY CONFERENCE WITHIN NINETY DAYS AFTER THE DATE WHEN PROOF
OF SERVICE IS FILED WITH THE COUNTY CLERK, OR ON SUCH ADJOURNED DATE  AS
HAS BEEN AGREED TO BY THE PARTIES, FOR THE PURPOSE OF HOLDING SETTLEMENT
DISCUSSIONS  PERTAINING  TO  THE  RELATIVE RIGHTS AND OBLIGATIONS OF THE

S. 5931--B                         13

PARTIES UNDER THE MORTGAGE LOAN DOCUMENTS, INCLUDING, BUT NOT LIMITED TO
DETERMINING WHETHER THE PARTIES CAN REACH A  MUTUALLY  AGREEABLE  RESOL-
UTION TO HELP THE DEFENDANT AVOID LOSING HIS OR HER HOME, AND EVALUATING
THE POTENTIAL FOR A RESOLUTION IN WHICH PAYMENT SCHEDULES OR AMOUNTS MAY
BE  MODIFIED OR OTHER WORKOUT OPTIONS MAY BE AGREED TO, AND FOR WHATEVER
OTHER PURPOSES THE COURT DEEMS APPROPRIATE.
  2. THE COURT SHALL CAUSE A NOTICE TO BE SENT TO THE PARTIES BY  CERTI-
FIED  MAIL INFORMING THEM OF THE DATE, TIME, AND LOCATION OF THE CONFER-
ENCE, AND INFORMING THE HOMEOWNER OF HIS OR HER OPTION OF  PARTICIPATION
IN  THE  RESIDENTIAL  MORTGAGE FORECLOSURE DIVERSION PROGRAM. THE NOTICE
SHALL INCLUDE THE HOTLINE ESTABLISHED BY THE BANKING  DEPARTMENT  AND  A
STATEMENT THAT THE HOMEOWNER MUST COMPLETE A COUNSELING SESSION PRIOR TO
HIS  OR  HER  SCHEDULED SETTLEMENT CONFERENCE IN ORDER TO PARTICIPATE IN
THE RESIDENTIAL MORTGAGE FORECLOSURE DIVERSION PROGRAM.
  3. IF THE HOMEOWNER COMPLETES A COUNSELING SESSION  WITH  A  COUNSELOR
FROM  A  NOT-FOR-PROFIT  ASSISTANCE  PROVIDER  APPROVED  BY  THE BANKING
DEPARTMENT, SUCH COUNSELOR SHALL SEND A LOAN  MODIFICATION  PROPOSAL  TO
THE  FORECLOSING PARTY AT LEAST TEN DAYS PRIOR TO THE SETTLEMENT CONFER-
ENCE.  THE FORECLOSING PARTY SHALL, PRIOR TO THE SETTLEMENT  CONFERENCE,
REVIEW THE MODIFICATION PROPOSAL AND MAKE A GOOD FAITH EFFORT TO REACH A
RESOLUTION WITH THE HOMEOWNER.
  4.  AT  THE  INITIAL  CONFERENCE  HELD  PURSUANT  TO THIS SECTION, ANY
DEFENDANT CURRENTLY APPEARING PRO SE, SHALL BE DEEMED  TO  HAVE  MADE  A
MOTION  TO  PROCEED AS A POOR PERSON UNDER SECTION ELEVEN HUNDRED ONE OF
THIS CHAPTER. THE COURT SHALL DETERMINE WHETHER SUCH PERMISSION SHALL BE
GRANTED PURSUANT TO STANDARDS SET FORTH IN SECTION ELEVEN HUNDRED ONE OF
THIS CHAPTER. IF THE COURT APPOINTS DEFENDANT COUNSEL PURSUANT TO SUBDI-
VISION (A) OF SECTION ELEVEN HUNDRED  TWO  OF  THIS  CHAPTER,  IT  SHALL
ADJOURN  THE  CONFERENCE TO A DATE CERTAIN FOR APPEARANCE OF COUNSEL AND
SETTLEMENT DISCUSSIONS PURSUANT TO SUBDIVISION ONE OF THIS SECTION,  AND
OTHERWISE SHALL PROCEED WITH THE CONFERENCE.
  5.  AT  ANY  CONFERENCE  HELD  PURSUANT TO THIS SECTION, THE PLAINTIFF
SHALL APPEAR IN PERSON OR BY COUNSEL. ANY PERSON REPRESENTING THE PLAIN-
TIFF SHALL HAVE FULL SETTLEMENT AUTHORITY, INCLUDING  THE  AUTHORITY  TO
DISPOSE  OF THE CASE AND TO ENTER INTO OR APPROVE A LOAN MODIFICATION OR
WORKOUT AGREEMENT. THE DEFENDANT-MORTGAGOR SHALL APPEAR IN PERSON OR  BY
COUNSEL.  SUCH  APPEARANCE  AND PARTICIPATION BY THE DEFENDANT-MORTGAGOR
SHALL NOT CONSTITUTE AN APPEARANCE IN THE ACTION NOR SHALL IT BE  DEEMED
TO  BE A WAIVER, IN WHOLE OR IN PART, OF ANY DEFENSES, JURISDICTIONAL OR
OTHERWISE, THAT THE DEFENDANT-MORTGAGOR MAY HAVE TO THE ACTION. ANY  AND
ALL STATEMENTS MADE, WHETHER ORAL OR WRITTEN, AND ANY OR ALL INFORMATION
EXCHANGED  AT THE CONFERENCE, SHALL BE SOLELY FOR THE PURPOSES OF RESOL-
UTION AND SETTLEMENT AND SHALL NOT BE DEEMED TO BE THE ADMISSIONS OF ANY
PARTY WITH RESPECT TO THE UNDERLYING ACTION. IF THE DEFENDANT IS APPEAR-
ING PRO SE, THE COURT SHALL ADVISE THE DEFENDANT OF THE  NATURE  OF  THE
ACTION AND HIS OR HER RIGHTS AND RESPONSIBILITIES AS A DEFENDANT.  WHERE
APPROPRIATE,  THE COURT MAY PERMIT A PLAINTIFF OR THE PLAINTIFF'S REPRE-
SENTATIVE TO ATTEND  THE  SETTLEMENT  CONFERENCE  TELEPHONICALLY  OR  BY
VIDEO-CONFERENCE. UNTIL ALL THE PROVISIONS AND PROCEDURES OF THE SETTLE-
MENT  CONFERENCE  ARE  CONCLUDED,  THE MORTGAGEE SHALL BE PRECLUDED FROM
FILING A MOTION FOR SUMMARY JUDGMENT OR ORDER OF REFERENCE OR  OTHERWISE
PROCEEDING  WITH  THE  FORECLOSURE CASE. THE FAILURE OF THE PLAINTIFF TO
APPEAR AT A SCHEDULED CONFERENCE WITHOUT GOOD CAUSE OR APPEARANCE  BY  A
REPRESENTATIVE  WITHOUT  FULL  AUTHORITY  TO  ENTER  INTO  A SETTLEMENT,
MODIFICATION OR WORKOUT AGREEMENT SHALL  SUBJECT  THE  PLAINTIFF  AND/OR

S. 5931--B                         14

COUNSEL  TO  APPROPRIATE  REMEDIAL  ACTION  INCLUDING BUT NOT LIMITED TO
DEFAULT, NON-SUIT OR DISMISSAL WITH PREJUDICE.
  6.  BOTH  PARTIES  MUST HAVE ANY SUPPORTING DOCUMENTATION WITH THEM AT
THE TIME OF THE CONFERENCE.  IF  THE  HOMEOWNER  ATTENDED  A  COUNSELING
SESSION  WITH  AN  APPROVED  COUNSELOR, SUCH COUNSELOR MUST HAVE GIVEN A
LOAN MODIFICATION PROPOSAL TO THE FORECLOSING PARTY AT  LEAST  TEN  DAYS
PRIOR TO THE SETTLEMENT CONFERENCE.
  7.  THE COURT SHALL PRESIDE OVER THE CONFERENCE IN AN EFFORT TO ESTAB-
LISH A REPAYMENT PLAN THAT IS ACCEPTABLE TO THE LENDER THAT  ALLOWS  THE
HOMEOWNER TO REMAIN IN THE HOME.
  8.  AFTER  THE SETTLEMENT CONFERENCE, THE COURT SHALL PRODUCE A REPORT
FINALIZING AND DETAILING ANY TERMS AND CONDITIONS THAT HAVE BEEN  AGREED
UPON  BY  THE  PARTIES. SUCH REPORT SHALL BE MADE PART OF THE RECORD FOR
THE ACTION.
  S 16. Section 3-a of chapter 472 of the laws  of  2008,  amending  the
real  property  actions  and  proceedings law and other laws relating to
foreclosure actions on home  mortgage  loans,  is  amended  to  read  as
follows:
  S  3-a.  For  any  foreclosure action on a [residential mortgage] HOME
loan AS DEFINED BY  SECTION  1304  OF  THE  REAL  PROPERTY  ACTIONS  AND
PROCEEDINGS LAW, in which the action was initiated prior to September 1,
2008  but  where  the final order of judgment has not [yet] been issued,
the court shall request each plaintiff to identify whether the  loan  in
foreclosure  is  a  subprime home loan as defined in section 1304 of the
real property actions and proceedings law AS IN EFFECT ON THE  EFFECTIVE
DATE  OF  THIS SECTION or is a high-cost home loan as defined in section
6-l of the banking law.
  If the loan is a subprime home loan  AS  THAT  TERM  IS  USED  IN  THE
PRECEDING  PARAGRAPH  or high-cost home loan, the court shall notify the
defendant that if he or she is a resident of such property,  he  or  she
may request a settlement conference.
  FOR  ANY FORECLOSURE ACTION ON A HOME LOAN THAT IS NOT A SUBPRIME HOME
LOAN OR A HIGH-COST HOME LOAN (AS THOSE TERMS ARE USED IN THE  PRECEDING
PARAGRAPHS),  IN WHICH THE FORECLOSURE ACTION WAS INITIATED PRIOR TO THE
DATE THAT SUCH FORECLOSURE ACTION BECAME SUBJECT TO  THE  PROVISIONS  OF
RULE  3408 OF THE CIVIL PRACTICE LAW AND RULES BUT WHERE THE FINAL ORDER
OF JUDGMENT HAS NOT BEEN ISSUED, THE COURT SHALL  NOTIFY  THE  DEFENDANT
THAT  IF HE OR SHE IS A RESIDENT OF SUCH PROPERTY, HE OR SHE MAY REQUEST
A SETTLEMENT CONFERENCE.
  If the defendant requests a conference,  the  court  shall  hold  such
conference  as soon as practicable for the purpose of holding settlement
discussions pertaining to the rights  and  obligations  of  the  parties
under  the mortgage loan documents, including but not limited to, deter-
mining whether the parties can reach a mutually agreeable resolution  to
help  the  defendant  avoid  losing  his or her home, and evaluating the
potential for a resolution in which payment schedules or amounts may  be
modified  or  other  workout  options may be agreed to, and for whatever
other purposes the court deems appropriate.
  At any conference held pursuant to this section, the  plaintiff  shall
appear  in person or by counsel, and if appearing by counsel, such coun-
sel shall be fully authorized to dispose  of  the  case.  The  defendant
shall  appear in person or by counsel. If the defendant is appearing pro
se, the court shall advise the defendant of the nature of the action and
his or her rights and responsibilities as a defendant.  Where  appropri-
ate,  the  court  may permit a representative of the plaintiff to attend
the settlement conference telephonically or by video-conference.

S. 5931--B                         15

  S 17. Paragraph (e) of subdivision 1 of section  6-1  of  the  banking
law, as added by chapter 626 of the laws of 2002 and subparagraph (i) as
amended  by  chapter  552  of  the  laws  of 2007, is amended to read as
follows:
  (e)  "Home  loan"  means  a  [home] loan, including an open-end credit
plan, other than a reverse mortgage transaction, in which:
  (i) The principal amount of the loan AT ORIGINATION  does  not  exceed
the  conforming loan size limit for a comparable dwelling as established
from time to time by the federal national mortgage association;
  (ii) The borrower is a natural person;
  (iii) The debt is incurred by the  borrower  primarily  for  personal,
family, or household purposes;
  (iv) The loan is secured by a mortgage or deed of trust on real estate
[upon  which  there  is located or there is to be located a structure or
structures intended principally for occupancy of from one to four  fami-
lies  which  is  or  will  be occupied by the borrower as the borrower's
principal dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELLING, OR  BY  A
CONDOMINIUM  UNIT,  OR  BY ANY CERTIFICATE OF STOCK OR OTHER EVIDENCE OF
OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A  CORPORATION,  PARTNERSHIP
OR  OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNERSHIP OF REAL
ESTATE, IN EITHER CASE USED OR OCCUPIED OR INTENDED TO BE USED OR  OCCU-
PIED,  WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE PERSONS
AND WHICH IS OR WILL BE OCCUPIED BY THE BORROWER AS THE BORROWER'S PRIN-
CIPAL DWELLING; and
  (v) The property is located in this state.
  S 18. Paragraphs (r) and (s) of subdivision 2 of section  6-l  of  the
banking law, as added by chapter 472 of the laws of 2008, are amended to
read as follows:
  (r)  No  prepayment  penalties.  [No]  NOTWITHSTANDING  PARAGRAPH B OF
SUBDIVISION THREE OF SECTION 5-501 OF THE GENERAL  OBLIGATIONS  LAW,  NO
prepayment  penalties  or  fees shall be charged or collected on a high-
cost home loan. A prepayment penalty in a high-cost home loan  shall  be
unenforceable.
  (s)  No  abusive  yield spread premiums. In arranging a high-cost home
loan, the mortgage broker shall, at the time  of  application,  disclose
the  exact amount and methodology of DETERMINING total compensation that
the broker will receive. Such amount may be paid as direct  compensation
from the lender, direct compensation from the borrower, or a combination
of  the  two.  The  provisions  of this paragraph shall not restrict the
ability of a borrower to utilize a yield  spread  premium  in  order  to
offset  any  up  front costs by accepting a higher interest rate. If the
borrower chooses this option, any compensation from the  lender  [which]
THAT exceeds the [exact] amount of total compensation owed to the broker
must be credited to the borrower. The superintendent shall prescribe the
form  that such disclosure shall take. This provision shall not restrict
a broker from accepting a lesser amount OF COMPENSATION.
  S 19. Paragraph (d) of subdivision 1 and paragraphs  (l)  and  (n)  of
subdivision 2 of section 6-m of the banking law, as added by chapter 472
of the laws of 2008, are amended to read as follows:
  (d)  "Home  loan"  means  a  [home] loan, including an open-end credit
plan, other than a reverse mortgage transaction, in which:
  (i) The principal amount of the loan AT ORIGINATION  does  not  exceed
the  conforming loan size limit for a comparable dwelling as established
from time to time by the federal national mortgage association;
  (ii) The borrower is a natural person;

S. 5931--B                         16

  (iii) The debt is incurred by the  borrower  primarily  for  personal,
family, or household purposes;
  (iv) The loan is secured by a mortgage or deed of trust on real estate
[upon  which  there  is located or there is to be located a structure or
structures intended principally for occupancy of from one to four  fami-
lies  which  is  or  will  be occupied by the borrower as the borrower's
principal dwelling] IMPROVED BY A ONE TO FOUR FAMILY DWELLING, OR  BY  A
CONDOMINIUM  UNIT,  OR  BY ANY CERTIFICATE OF STOCK OR OTHER EVIDENCE OF
OWNERSHIP IN, AND A PROPRIETARY LEASE FROM, A  CORPORATION,  PARTNERSHIP
OR  OTHER ENTITY FORMED FOR THE PURPOSE OF COOPERATIVE OWNERSHIP OF REAL
ESTATE, IN EITHER CASE, USED OR OCCUPIED OR INTENDED TO BE USED OR OCCU-
PIED, WHOLLY OR PARTLY, AS THE HOME OR RESIDENCE OF ONE OR MORE  PERSONS
AND WHICH IS OR WILL BE OCCUPIED BY THE BORROWER AS THE BORROWER'S PRIN-
CIPAL DWELLING; and
  (v) The property is located in this state.
  (l)  Prohibited payments to mortgage BANKERS AND brokers. In making or
arranging a subprime home loan, no lender, MORTGAGE BANKER  or  mortgage
broker  shall accept or give any fee, kickback, thing of value, portion,
split or percentage of charges, other  than  as  payment  for  goods  or
facilities  that  were actually furnished or services that were actually
performed. Such payment must be reasonably related to the value  of  the
goods  or  facilities that were actually furnished or services that were
actually performed.
  (n) No abusive yield spread premiums. In  arranging  a  subprime  home
loan,  the  mortgage  broker shall, at the time of application, disclose
the exact amount and methodology for determining the total  compensation
that  the broker will receive. Such amount may be paid as direct compen-
sation from the lender, direct compensation  from  the  borrower,  or  a
combination  of  the  two.  The  provisions  of this paragraph shall not
restrict the ability of a borrower to utilize a yield spread premium  in
order  to  offset any upfront costs by accepting a higher interest rate.
If the borrower chooses this option, any compensation  from  the  lender
[which]  THAT exceeds the exact amount of total compensation owed to the
broker must be  credited  to  the  borrower.  The  superintendent  shall
prescribe the form that such disclosure shall take. This paragraph shall
not restrict a broker from accepting a lesser amount OF COMPENSATION.
  S  20.  Subdivisions  3,  4,  5,  6, 7, 8, 9, 10, 11, 12, 13 and 14 of
section 6-m of the banking law, as added by chapter 472 of the  laws  of
2008, are amended to read as follows:
  3.  CERTAIN LOAN PROVISIONS RENDERED VOID. Any provision in a subprime
home loan that  violates  subdivision  two  of  this  section  shall  be
rendered void.
  4.  [No  arrangement  of  certain subprime loans] ABILITY TO REPAY. No
lender or mortgage broker shall make or arrange  a  subprime  home  loan
unless  the  lender  or  mortgage  broker  reasonably  and in good faith
believes at the time [the loan is consummated] OF THE LOAN CLOSING  that
one  or  more  of the borrowers, when considered individually or collec-
tively, has the ability to repay the loan according to its terms and  to
pay  applicable  real  estate  taxes and hazard insurance premiums. If a
lender or mortgage broker making or arranging a subprime home loan knows
that one or more home loans secured by the same real  property  will  be
made  contemporaneously to the same borrower with the subprime home loan
being made or arranged by that lender or mortgage broker, the lender  or
mortgage broker making or arranging the subprime home loan must document
the  borrower's  ability  to repay the combined payments of all loans on
the same real property.

S. 5931--B                         17

  (a) A lender or mortgage broker's analysis of a borrower's ability  to
repay  a  subprime  home  loan  according  to  the loan terms and to pay
related real estate taxes and insurance premiums shall  be  based  on  a
consideration  of  the  borrower's  credit history, current and expected
income,  current  obligations,  employment  status,  and other financial
resources other than the borrower's equity in  the  real  property  that
secures repayment of the subprime home loan.
  (b) In determining a borrower's ability to repay a subprime home loan,
the  lender or mortgage broker shall take reasonable steps to verify the
accuracy and completeness of information provided by or on behalf of the
borrower using tax returns, payroll receipts, bank  records,  reasonable
alternative methods, or reasonable third-party verification.
  (c)  In determining a borrower's ability to repay a subprime home loan
according to its terms when the loan has an adjustable rate feature, the
lender or mortgage broker shall calculate the monthly payment amount for
principal and interest by assuming  (i)  the  loan  proceeds  are  fully
disbursed on the date of the loan closing, (ii) the loan is to be repaid
in  substantially  equal  monthly  amortizing  payments of principal and
interest over the entire term of the loan, with no balloon payment,  and
(iii) the interest rate over the entire term of the loan is a fixed rate
equal to the fully indexed rate at the time of the loan closing, without
considering any initial discounted rate.
  (d)  A lender or mortgage broker's analysis of a borrower's ability to
repay a subprime home loan may utilize  reasonable  commercially  recog-
nized  underwriting  standards  and  methodologies,  including automated
underwriting systems, provided the standards  and  methodologies  comply
with the provisions of this section.
  5.  REQUIRED  LEGEND.  Subprime  home  loan  mortgages shall include a
legend on top of the mortgage in  twelve-point  type  stating  that  the
mortgage is a subprime home loan subject to this section.
  6.  EVASION  OF STATUTORY REQUIREMENTS. The provisions of this section
shall apply to any person who [in  bad  faith]  attempts  to  avoid  the
application of this section by any subterfuge, including but not limited
to,  splitting  or dividing any loan transaction into separate parts for
the purpose of evading the provisions of this section.
  7. GOOD FAITH ERROR. A lender of  a  subprime  home  loan  that,  when
acting  in  good  faith,  fails  to  comply  with the provisions of this
section, shall not be deemed to have violated this section if, prior  to
the institution of any action and before the borrower is prejudiced, the
lender  notifies  the  borrower  of  the compliance failure, appropriate
restitution is made, and whatever adjustments  that  are  necessary  are
made  to  the  loan  to  make  the loan satisfy the requirements of this
section.
  8. ENFORCEMENT. The attorney general or the superintendent may enforce
the provisions of this section.
  9. DAMAGES. Any person found by a preponderance  of  the  evidence  to
have violated this section shall be liable to the borrower of a subprime
home loan for actual damages.
  10.  ATTORNEYS FEES. A court may also award reasonable attorneys' fees
to a prevailing borrower in a foreclosure action.
  11. EQUITABLE RELIEF. A borrower may be granted injunctive, declarato-
ry and such other equitable relief as the court deems appropriate in  an
action to enforce compliance with this section.
  12.  REMEDIES NOT EXCLUSIVE. The remedies provided in this section are
not intended to be the exclusive remedies available to a borrower  of  a
subprime home loan.

S. 5931--B                         18

  13.  DEFENSE  TO FORECLOSURE. In any action by a lender or assignee to
enforce a loan against a borrower in default more than sixty days or  in
foreclosure,  a  borrower may assert as a defense, any violation of this
section.
  14.  SEVERABILITY.  The provisions of this section shall be severable,
and if any phrase, clause, sentence, or  provision  is  declared  to  be
invalid,  or  is preempted by federal law or regulation, the validity of
the remainder of this section shall not  be  affected  thereby.  If  any
provision of this section is declared to be inapplicable to any specific
category,  type, or kind of points and fees with respect to a home loan,
the provisions of this section shall nonetheless continue to apply  with
respect to all other points and fees.
  S  21.  The banking law is amended by adding a new section 6-n to read
as follows:
  S 6-N.  COUNSELING OF MORTGAGEES. 1. THE DEPARTMENT SHALL ESTABLISH  A
PROCEDURE TO COUNSEL HOMEOWNERS WHOSE PROPERTY IS SUBJECT TO OR ABOUT TO
BECOME SUBJECT TO FORECLOSURE.
  2.  A  COUNSELOR FROM A NOT-FOR-PROFIT ASSISTANCE PROVIDER APPROVED BY
THE DEPARTMENT SHALL MEET WITH ALL HOMEOWNERS PRIOR TO  THEIR  SCHEDULED
SETTLEMENT  CONFERENCE.  THE COUNSELOR SHALL ALSO CONSULT WITH THE FORE-
CLOSING PARTY OR SUCH PARTY'S REPRESENTATIVE AND ATTEMPT TO FORMULATE  A
REPAYMENT  SCHEDULE  THAT  IS  ACCEPTABLE  TO BOTH THE HOMEOWNER AND THE
FORECLOSING PARTY. IF THE PARTIES AGREE, THEY SHALL FILE  A  CERTIFICATE
OF RESOLUTION WITH THE COURT OF JURISDICTION.
  3.  IF  THE COUNSELOR IS UNABLE TO NEGOTIATE AN ACCEPTABLE RESOLUTION,
THE PARTIES SHALL FILE A CERTIFICATE OF PARTICIPATION WITH THE COURT  OF
JURISDICTION AND THE SCHEDULED SETTLEMENT CONFERENCE SHALL PROCEED.
  S  22.  Paragraphs  (a) and (d) of subdivision 1 of section 590 of the
banking law, as added by chapter 571 of the laws of 1986, are amended to
read as follows:
  (a) "Mortgage loan" shall mean a loan to a natural person made  prima-
rily  for  personal,  family  or  household  use, [primarily] secured by
either a mortgage OR DEED OF TRUST  on  residential  real  property  [or
certificates],  ANY  CERTIFICATE of stock or other evidence of ownership
[interests] in, and proprietary [leases] LEASE  from,  [corporations  or
partnerships]  A  CORPORATION  OR  PARTNERSHIP formed for the purpose of
cooperative ownership of residential real property OR, IF DETERMINED  BY
THE  BANKING BOARD BY REGULATION, SHALL INCLUDE SUCH A LOAN SECURED BY A
SECURITY INTEREST ON A MANUFACTURED HOME;
  (d) "Soliciting, processing, placing or negotiating a  mortgage  loan"
shall  mean  for  compensation  or  gain, either directly or indirectly,
accepting or offering to accept an  application  for  a  mortgage  loan,
assisting  or offering to assist in the processing of an application for
a mortgage loan, soliciting or offering to solicit a  mortgage  loan  on
behalf  of  a  third  party  or negotiating or offering to negotiate the
terms or conditions of a mortgage loan with a  lender  on  behalf  of  a
third  party;  PROVIDED  THAT, FOR PURPOSES OF THIS SECTION, A BONA FIDE
NOT-FOR-PROFIT ORGANIZATION THAT OFFERS COUNSELING OR ADVICE TO HOMEOWN-
ERS IN FORECLOSURE OR LOAN DEFAULT WITH A LOAN MODIFICATION OR REFINANC-
ING SHALL NOT BE DEEMED TO BE SOLICITING, PROCESSING, PLACING OR NEGOTI-
ATING A MORTGAGE LOAN FOR COMPENSATION OR GAIN;
  S 23. Paragraphs (c) and (d) of subdivision 3 of section  590  of  the
banking  law  are relettered paragraphs (d) and (e), and a new paragraph
(c) is added to read as follows:

S. 5931--B                         19

  (C) SUCH RULES AND REGULATIONS UNDER THIS ARTICLE REGARDING THE ORIGI-
NATION, SALE OR SERVICING OF MANUFACTURED HOME LOANS AS MAY BE NECESSARY
AND APPROPRIATE FOR THE PROTECTION OF CONSUMERS;
  S  24. Paragraphs (b) and (b-1) of subdivision 2 of section 590 of the
banking law, paragraph (b) as amended and paragraph (b-1)  as  added  by
chapter 472 of the laws of 2008, are amended to read as follows:
  (b)  No  person, partnership, association, corporation or other entity
shall engage in the business of soliciting, processing, placing or nego-
tiating a mortgage loan or offering to solicit, process, place or  nego-
tiate  a mortgage loan in this state without first being registered with
the superintendent as a mortgage broker in accordance with the registra-
tion procedure provided in this article and by such regulations  as  may
be promulgated by the banking board or prescribed by the superintendent.
The  registration  provisions of this subdivision shall not apply to any
exempt organization [or], mortgage banker OR MORTGAGE LOAN SERVICER.  No
real estate broker or salesman, as defined in section four hundred forty
of the real property law, shall be deemed to be engaged in the  business
of  a mortgage broker if he does not accept a fee, directly or indirect-
ly, for services rendered in connection with the solicitation,  process-
ing, placement or negotiation of a mortgage loan. No attorney-at-law who
solicits,  processes, places or negotiates a mortgage loan incidental to
his legal practice shall be deemed to be engaged in the  business  of  a
mortgage  broker.  The registration provisions of this subdivision shall
not apply to any person or entity which shall be exempted in  accordance
with regulations promulgated by the banking board hereunder.
  (b-1) No person, partnership, association, corporation or other entity
shall engage in the business of servicing mortgage loans with respect to
any  property  located in this state without first being registered with
the superintendent as a mortgage loan servicer in  accordance  with  the
registration procedure provided by such regulations as may be prescribed
by the superintendent. The superintendent may refuse to register a mort-
gage  loan  servicer  on  the  same grounds that he or she may refuse to
issue a registration certificate to a mortgage broker pursuant to subdi-
vision two of section five hundred ninety-two-a of this  article.    The
registration  provisions  of  this  subdivision  shall  not apply to any
exempt organization, mortgage banker, or mortgage broker or  any  person
or  entity  which  shall  be  exempted  in  accordance  with regulations
prescribed by the superintendent hereunder; provided  that  such  exempt
organization, mortgage banker, mortgage broker, or exempted person noti-
fies the superintendent that it is acting as a mortgage loan servicer in
this  state and complies with any regulation applicable to mortgage loan
servicers, promulgated by the banking board or prescribed by the  super-
intendent  with  respect to mortgage loan servicers.  THE SUPERINTENDENT
MAY REQUIRE ALL REGISTRATIONS AND NOTIFICATIONS TO BE MADE  THROUGH  THE
NATIONWIDE  MORTGAGE  LICENSING  SYSTEM  AND REGISTRY. AN APPLICATION TO
BECOME A REGISTERED MORTGAGE  LOAN  SERVICER  OR  ANY  APPLICATION  WITH
RESPECT  TO  A  MORTGAGE  LOAN SERVICER SHALL BE ACCOMPANIED BY A FEE AS
PRESCRIBED PURSUANT TO SECTION  EIGHTEEN-A  OF  THIS  CHAPTER.  ANY  FEE
ESTABLISHED PURSUANT TO THIS SUBDIVISION MAY BE COLLECTED BY AND INCLUDE
A PROCESSING FEE CHARGED BY THE NATIONWIDE MORTGAGE LICENSING SYSTEM AND
REGISTRY.  ANY  SUCH PROCESSING FEES SHALL NOT BE REMITTED TO THE SUPER-
INTENDENT AND SHALL NOT BE DEEMED REVENUE PURSUANT TO  THIS  CHAPTER  OR
THE STATE FINANCE LAW.
  S  25.  Section  595-a  of  the banking law is amended by adding a new
subdivision 5 to read as follows:

S. 5931--B                         20

  5. NO LICENSEE OR REGISTRANT ENGAGING IN ANY  ACTIVITIES  CONSTITUTING
THE  BUSINESS  OF  A  DISTRESSED  PROPERTY  CONSULTANT,  AS DESCRIBED IN
SECTION TWO HUNDRED SIXTY-FIVE-B OF THE REAL PROPERTY LAW, SHALL  CHARGE
FOR  OR  ACCEPT PAYMENT FOR REAL PROPERTY CONSULTING SERVICES AS DEFINED
IN SUCH SECTION BEFORE THE FULL COMPLETION OF SUCH SERVICES.
  S  26.  Subdivisions 1, 2 and 4 of section 187.00 of the penal law, as
added by chapter 472 of the  laws  of  2008,  are  amended  to  read  as
follows:
  1.  "Person" means any individual or entity[, other than an individual
who applies for a residential mortgage loan and intends to  occupy  such
residential property which such mortgage secures unless such person acts
as  an  accessory  to  an  individual  or entity in committing any crime
defined in this article].
  2. "Residential mortgage loan" means a loan  or  agreement  to  extend
credit,  including  the renewal [or], refinancing OR MODIFICATION of any
such loan, made to a person, which loan is primarily secured by either A
mortgage, deed of trust, or other lien upon any interest in  residential
real property or ANY certificate of stock or other evidence of ownership
in,  AND  A  PROPRIETARY LEASE FROM, a corporation or partnership formed
for the purpose of cooperative ownership of residential real property.
  4.  "Residential mortgage fraud" is committed by [any] A  person  who,
knowingly  and with intent to defraud, presents, causes to be presented,
or prepares with knowledge or belief that it will be used in  soliciting
an  applicant  for  [a residential mortgage loan], [or in] applying for,
[the] underwriting [of,] or closing [of] a residential mortgage loan, or
[in documents filed] FILING with a county clerk of  any  county  in  the
state  arising  out of and related to the closing of a residential mort-
gage loan, any written statement which [he or she knows to]:
  (a) [contain] CONTAINS materially  false  information  concerning  any
fact material thereto; or
  (b)  [conceal]  CONCEALS,  for  the purpose of misleading, information
concerning any fact material thereto.
  S 27. The penal law is amended by adding a new section 187.01 to  read
as follows:
S 187.01 LIMITATION ON PROSECUTION.
  NO  INDIVIDUAL WHO APPLIES FOR A RESIDENTIAL MORTGAGE LOAN AND INTENDS
TO OCCUPY SUCH RESIDENTIAL PROPERTY WHICH SUCH MORTGAGE SECURES SHALL BE
HELD LIABLE UNDER THIS ARTICLE PROVIDED, HOWEVER,  ANY  SUCH  INDIVIDUAL
WHO  ACTS  AS  AN ACCESSORY TO AN INDIVIDUAL OR ENTITY IN COMMITTING ANY
CRIME DEFINED IN THIS ARTICLE MAY BE CHARGED AS  AN  ACCESSORY  TO  SUCH
CRIME.
  S  28.    The  judiciary law is amended by adding a new section 2-c to
read as follows:
  S 2-C.  INDIVIDUAL ASSIGNMENTS. THE UNIFIED COURT SYSTEM,  IN  ACCORD-
ANCE  WITH  THEIR  INDIVIDUAL  ASSIGNMENT  SYSTEM, SHALL ENSURE THAT ALL
CAUSES OF ACTION TO FORECLOSE ON REAL PROPERTY SHALL BE ASSIGNED TO  THE
SAME JUDGE OR JUDGES, TO THE EXTENT PRACTICABLE.
  S  29.  Subparagraphs  (i) and (vii) of paragraph (e) of subdivision 1
and paragraph (b) of subdivision 2 of section 265-b of the real property
law, as added by chapter 472 of the laws of 2008, are amended to read as
follows:
  (i) an attorney admitted to practice in the state of New York WHEN THE
ATTORNEY IS DIRECTLY PROVIDING CONSULTING SERVICES TO A HOMEOWNER IN THE
COURSE OF HIS OR HER REGULAR LEGAL PRACTICE;
  (vii) a person licensed as a mortgage banker or registered as a  mort-
gage  broker  or  registered  as  a mortgage loan servicer as defined in

S. 5931--B                         21

article twelve-D of the banking law, PROVIDED THAT NO SUCH PERSON  SHALL
TAKE  ANY  UPFRONT  FEE  IN CONJUNCTION WITH ACTIVITIES CONSTITUTING THE
BUSINESS OF A DISTRESSED PROPERTY CONSULTANT;
  (b)  charging  for  or  accepting  ANY payment for consulting services
before the full completion of ALL such services, INCLUDING A PAYMENT  TO
BE PLACED IN ESCROW PENDING THE COMPLETION OF SUCH SERVICES;
  S  30.  Sections 1 and 2 of part NN of chapter 57 of the laws of 2008,
relating to authorizing the New York state mortgage agency  to  transfer
certain  moneys,  as  amended by section 1 of part B of chapter 2 of the
laws of 2009, are amended to read as follows:
  Section 1. Notwithstanding any other provision of  law,  and  provided
that  the reserves in the project pool insurance-account of the mortgage
insurance fund created pursuant to section 2429-b of the public authori-
ties law are sufficient to attain and maintain  the  credit  rating  (as
determined  by  the  agency) required to accomplish the purposes of such
account, the board of directors of the state of New York mortgage  agen-
cy,  shall,  as  soon  as  practicable  but not later than July 1, 2008,
transfer a sum not to  exceed  one  hundred  million  dollars  from  the
project  pool  insurance  account  of  the  mortgage  insurance  fund as
follows: a sum not to exceed fifty-four million dollars to the New  York
state  housing  finance  agency for its Mitchell Lama Rehabilitation and
Preservation Program and its All Affordable Program; a sum not to exceed
six million dollars to the  Long  Island  Housing  Partnership  for  its
Homeownership  and Economic Stabilization for Long Island Program; a sum
not to exceed twenty-five million dollars to the New York state  housing
trust   fund  corporation  (the  "corporation")  for  the  provision  of
[subprime] foreclosure prevention services as provided in section two of
this act; and a sum not to exceed fifteen million dollars to the  corpo-
ration  for  the greater Catskills flood remediation program as provided
in section three of this act.
  S 2. Within the amounts transferred to  the  corporation  pursuant  to
section  one of this act for [subprime] foreclosure prevention services,
the corporation shall, in consultation with the division of housing  and
community renewal, the banking department and the office of court admin-
istration,  develop  and  administer a [subprime] foreclosure prevention
services program which shall provide assistance related  to  foreclosure
prevention  to  homeowners who entered into [subprime or unconventional]
mortgages, including grants  and  aid  to  non-profit  organizations  to
provide  counseling, mediation, legal representation, and negotiation on
behalf of borrowers facing default or foreclosure, training and  support
for  counselors,  mediators,  and  lawyers  regarding such assistance to
homeowners, and credit counseling. Such assistance shall only be offered
to borrowers who are natural persons who hold a [subprime  or  unconven-
tional] home loan that is secured by a mortgage or deed of trust on real
estate  upon  which  there is located a structure or structures intended
principally for occupancy of from one to  four  families  and  which  is
occupied  by  the  borrower  as the borrower's principal dwelling and is
located in this state. [For  purposes  of  this  section,  "subprime  or
unconventional mortgage" shall mean: for a first lien loan, one that has
an  annual  percentage rate of three or more percentage points above the
yield on treasury securities of comparable maturity measured as  of  the
fifteenth  day of the month immediately preceding the month in which the
application for the loan is received by the lender;  for  a  subordinate
lien  loan,  one  that  has  an  annual  percentage rate of five or more
percentage points above the yield on treasury securities  of  comparable
maturity  measured  as  of  the  fifteenth  day of the month immediately

S. 5931--B                         22

preceding the month in which the application for the loan is received by
the lender; or a mortgage that is a "nontraditional  mortgage"  as  such
term  is  described in the "Interagency Guidance on Nontraditional Mort-
gage  Product  Risks"  issued  September  29,  2006, and published in 71
Federal Register, 58609, on October 4, 2006,  as  updated.]  The  corpo-
ration  shall  develop application procedures for non-profit agencies to
use to apply for funds to carry out  the  provisions  of  this  section,
criteria for evaluating such applications, including criteria that would
encourage  collaborative  applications  by multiple non-profit agencies,
and criteria for use by the non-profits that receive assistance pursuant
to this section to rank applications for assistance from eligible  home-
owners for the provisions of [subprime] foreclosure prevention services,
and  which  shall  consider  the  need for assistance and opportunity to
successfully restructure the applicable mortgage to allow the  homeowner
to  continue  to  occupy the home. The corporation, in consultation with
the division of housing and community renewal, the  banking  department,
and  the  office  of  court administration, shall submit a report to the
governor, the speaker of the assembly, and the  temporary  president  of
the senate on or before December 31, 2008, on the implementation of this
act. Such report shall include, but not be limited to, for each provider
receiving  funds  under  this  act,  a  description  of  such provider's
contract  amount,  the  specific   foreclosure   prevention   activities
performed  by  such  provider,  and the number of persons and households
served by each provider and the number of requests for  assistance  that
could not be granted. The report shall also include an analysis of mort-
gage defaults in the state, the causes of such defaults, the unmet needs
that exist in the state due to defaults on loans, foreclosures of homes,
rates of foreclosures, the need for direct assistance to homeowners, and
the  ability of homeowners to successfully comply with mortgage terms or
negotiate changes in their mortgages in order to remain in their homes.
  S 31. Severability clause. If any clause, sentence, paragraph, section
or part of this act shall be adjudged by any court of  competent  juris-
diction to be invalid, such judgment shall not affect, impair or invali-
date  the  remainder  thereof, but shall be confined in its operation to
the clause,  sentence,  paragraph,  section  or  part  thereof  directly
involved  in  the  controversy  in  which  such judgment shall have been
rendered.
  S 32. This act shall take effect immediately; provided, however, that:
  a. Section four of this act shall take effect  on  the  thirtieth  day
after  this act shall have become a law and shall apply to legal actions
commenced on or after such date;
  b. Sections five, twelve and thirteen of this act shall take effect on
the ninetieth day after this act shall have become a law and shall apply
to residential real property to which title is acquired on or after such
date;
  c. Section six of this act shall take effect on the sixtieth day after
this act shall have become a law and shall apply to notices required  by
section  1304 of the real property actions and proceedings law mailed on
or after such date;
  d. Section seven of this act shall take effect on  the  ninetieth  day
after it shall have become a law and shall expire and be deemed repealed
5 years after such date;
  e.  Section fifteen of this act shall take effect on the ninetieth day
after this act shall have become a law and shall apply to legal  actions
filed on or after such date;

S. 5931--B                         23

  f.  Section nineteen of this act shall take effect on the sixtieth day
after this act shall have become a law;
  g.  Section  twenty-two of this act shall take effect on the ninetieth
day after this act shall have become a law; provided that a  person  who
is  not exempt from registration may continue to engage in mortgage loan
modification activities after such date if he or she: (i) was engaged in
soliciting or negotiating mortgage loan modifications prior to the  date
this  act  shall  have  become  a law; (ii) has filed an application for
registration with the superintendent of banks; and  (iii)  has  received
confirmation that such application is informationally complete, but only
until he or she receives notice from the superintendent that such appli-
cation has been denied;
  h.  Section twenty-four of this act shall take effect on the same date
and in the same manner as section 8 of chapter 472 of the laws of  2008,
takes effect;
  i. Sections one, two, three, eight, nine, ten, eleven, fourteen, twen-
ty-one  and  twenty-eight of this act shall take effect on the ninetieth
day after this act shall have become a law.