BILL NUMBER:S3768

TITLE OF BILL:

An act to amend the banking law, in relation to modifying delinquent
mortgage loans and single point of contact

PURPOSE OR GENERAL IDEA OF BILL:

The bill requires creditors to provide a single point of contact to
borrowers in the foreclosure process who will be responsible for
providing accurate account and other information related to the
foreclosure process and loss mitigation efforts. The bill requires
creditors to provide a dedicated electronic mail address, facsimile
number and mailing address for borrowers to submit information
requested as part of a loan modification, short sale or other loss
mitigation option.

SUMMARY OF SPECIFIC PROVISIONS:

96-e of the banking law provides that mortgage servicers, as defined
in that section, shall designate a person responsible for
communications if said borrower's mortgage becomes sixty days or more
delinquent.

If a borrower who becomes delinquent by sixty days or more, a mortgage
              

servicer shall designate a single point of contact for the borrower in
the event he or she wishes to pursue a loan modification or
foreclosure prevention program.  The single point of contact shall be
responsible for all of the following:

(a) Communicating the options available to the borrower, the actions
the borrower must take to be considered for those options and the
status of the mortgage servicer's evaluation of the borrower for those
options.

(b) Coordinating receipt of all documents associated with loan
modification or loss mitigation activities and notifying the borrower
of any missing documents.

(c) Maintaining and providing accurate information about the
borrower's situation and current status in the loss mitigation
process.

(d) Ensuring that a borrower, who is not eligible for a federal making
home affordable program, is considered for proprietary or other
investor loss mitigation options.

(e) Having access to individuals with the ability to stop foreclosure
proceedings when necessary to comply with the making home affordable
program or New York law.

The single point of contact shall remain assigned to the borrower's
account until the mortgage services determines that all loss
mitigation options have been exhausted, the borrower's account becomes
current, or, in the case of a borrower in bankruptcy, the borrower has


exhausted all loss mitigation options for which the borrower is
potentially eligible and has applied.

§ 2 provides that this act shall take effect immediately.

JUSTIFICATION:

As our state and our nation slowly recover from the nation's financial
crisis, many homeowners are still trying to recover from the financial
impact of the crisis. Massive foreclosures have crippled our economy
and have made the recovery from the crisis very slow.  While the
economy strengthens and employment grows, many citizens are trying to
rebuild their lives.

One way many homeowners have tried to rebuild their lives is to work
to save the largest asset many of them own: their home. As the bottom
dropped out of the economy, many citizens lost their jobs and fell
behind on their mortgages. Many people who had owned their homes for
years or even decades found themselves unable to keep up with their
payments even though they may have never missed a payment before the
crisis.

As the job market has strengthened and people returned to work,
homeowners have reached out to their mortgage servicers to determine
if there are any federal, state or investor foreclosure mitigation
program available to them. Many homeowners were told of these programs
and were encouraged to apply. Many homeowners tried to apply for these
mitigation programs only to find out that the programs were nearly
impossible to gain approval.

On February 9, 2012, the U.S. Attorney General announced that the
federal government and 49 states had reached a settlement agreement
with the nation's five largest mortgage servicers to address mortgage
servicing, foreclosure, and bankruptcy abuses (the "National Mortgage
Settlement"). The National Mortgage Settlement is the largest consumer
financial protection settlement in United States history.  The
National Mortgage Settlement was made after state and federal
investigations into mortgage foreclosure activities revealed extensive
mortgage servicing misconduct, including riot limited to, deceptive
practices in the loan modification process such as telling borrowers
that a loan modification was imminent while simultaneously
foreclosing, repeatedly asking for the same documents, denying a
modification and not informing the borrowers and giving the borrower
incorrect information regarding their modification application.

This bill will require a mortgagor to appoint to the borrower one
contact person who will be responsible for all communications with the
borrower and who will be responsible for the entire process.  Having
one person responsible will make it less likely that a borrower who is
trying to save his or her home will fall victim to the bureaucracy of
the foreclose mitigation process and of the very large mortgage
servicers.

PRIOR LEGISLATIVE HISTORY:

This is a new bill.


FISCAL IMPLICATIONS FOR STATE & LOCAL GOVERNMENTS:

No cost.

EFFECTIVE DATE:

This act shall take effect immediately.