NY State Senate Bill 2019-S8789

Archive: Last Bill Status - In Senate Committee Rules Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 16, 2020	referred to rules

co-Sponsors

2019-S8789 (ACTIVE) - Details

See Assembly Version of this Bill:: A10851
Current Committee:: Senate Rules
Law Section:: Banking Law
Laws Affected:: Amd §595-b, Bank L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S2143, A2428
2023-2024: S564, A2131

2019-S8789 (ACTIVE) - Summary

Provides that any person who has been injured by reason of any violation of any such rules, regulations or policies as the superintendent may promulgate may bring an action in his or her own name; assert a counterclaim; or, if an action is commenced by the mortgagee or anyone acting on its behalf, bring a third party claim, against either the mortgagee and/or the mortgage servicer to enjoin any violations thereof; authorizes damages

2019-S8789 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8789

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend the banking law, in relation to mortgage loan servicers

 
PURPOSE OF BILL:

This bill will add new subdivisions to section 595-b of the banking law
in order to provide a private right of action to homeowners who are
injured by a mortgage servicer or mortgagee's failure to comply with
foreclosure rules and regulations. This bill will make the failure to
comply a denfense in a foreclosure proceeding, and compliance a condi-
tion before which a foreclosure action may be commenced.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 595-b of the banking law to add new subdivi-
sions 3 and 4. Subdivision 3 outlines a private right of action for
those who are personally injured by mortgage loan servicers or mortga-

gees. Injured parties may receive statutory damages, treble damages, and
in cases where injunctive relief is issued, attorneys' fees. Mortgage
servicers and mortgagees shall be jointly and severally liable. Subdivi-
sion 4 makes compliance with this section a condition precedent to
commencing an action to foreclose upon a mortgage subject to this arti-
cle and makes non-compliance a complete defense in a foreclosure
proceeding.

Section 2 sets forth the effective date.

 
JUSTIFICATION:

New York has been in a leader in establishing mortgage servicing regu-
lations, codified in NYRR Part 419, promulgated pursuant to Article 12-D
of the Banking law. They include strict regulations around the loss
mitigation process and a duty of good faith and fair dealing. However,
in contrast to equivalent provisions under federal law (RESPA), these
provisions do not support a private right of action.  Even before the
current financial and public health crisis brought on by COVID-19,
struggling homeowners would have been helped immeasurably by a private
right of action, rather than relying on the Department of Financial
Services to enforce these provisions against the mortgage originators
and servicers it regulates. Now with moratoriums ending and forbearance
agreements terminating, the current crisis has brought with it a renewed
attention to the need for loss mitigation for struggling homeowners. The
private right of action under the servicing rules will assume even
greater importance as a tool for COVID-19-impacted homeowners, among
others, engaging in loss mitigation with mortgage servicers. The current
expansive loss mitigation provisions will be increasingly important but
will be the source of frustration if they exist only on paper with no
redress for consumers harmed by their violation.

 
LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S8789 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8789
 
                             I N  S E N A T E
 
                               July 16, 2020
                                ___________
 
 Introduced  by Sen. KAVANAGH -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the banking law, in relation to mortgage loan servicers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Section 595-b of the banking law is amended by adding two
 new subdivisions 3 and 4 to read as follows:
   3. ACTIONS AND DAMAGES. (A) ANY PERSON WHO HAS BEEN INJURED BY  REASON
 OF  ANY  VIOLATION  OF  ANY  SUCH  RULES, REGULATIONS OR POLICIES AS THE
 SUPERINTENDENT MAY PROMULGATE TO EFFECTUATE THE PURPOSES OF  THIS  ARTI-
 CLE,  INCLUDING  BUT  NOT  LIMITED  TO  3  NYCRR 419 OR ANY SUBSEQUENTLY
 PROMULGATED MORTGAGE SERVICING RULES PURSUANT TO THIS SUBDIVISION, MAY:
   (I) BRING AN ACTION IN HIS OR HER OWN NAME;
   (II) ASSERT A COUNTERCLAIM; OR
   (III) IF AN ACTION IS COMMENCED BY THE MORTGAGEE OR ANYONE  ACTING  ON
 ITS  BEHALF,  BRING  A  THIRD  PARTY CLAIM, AGAINST EITHER THE MORTGAGEE
 AND/OR THE MORTGAGE SERVICER TO ENJOIN ANY VIOLATIONS THEREOF.
   (B) THE PERSON INJURED PURSUANT TO THIS SECTION:
   (I)  MAY  RECOVER  STATUTORY  DAMAGES  OF  ONE  THOUSAND  DOLLARS  PER
 VIOLATION;
   (II) MAY RECOVER TREBLE ACTUAL DAMAGES; AND
   (III)  IF AWARDED DAMAGES OR INJUNCTIVE RELIEF, SHALL ALSO BE ENTITLED
 TO RECOVER COSTS AND EXPENSES, INCLUDING BUT NOT LIMITED  TO  REASONABLE
 ATTORNEYS' FEES.
   (C)  THE  MORTGAGEE  AND  THE  MORTGAGE  SERVICER SHALL BE JOINTLY AND
 SEVERALLY LIABLE FOR ANY RECOVERIES  BY  AN  INJURED  MORTGAGOR  IN  ANY
 ACTION BROUGHT PURSUANT TO THIS SUBDIVISION.
   4. COMPLIANCE WITH RULES, REGULATIONS OR POLICIES. COMPLIANCE WITH ANY
 SUCH RULES, REGULATIONS OR POLICIES AS THE SUPERINTENDENT MAY PROMULGATE
 TO EFFECTUATE THE PURPOSES OF THIS ARTICLE, INCLUDING BUT NOT LIMITED TO
 3  NYCRR  419  OR  ANY SUBSEQUENTLY PROMULGATED MORTGAGE SERVICING RULES
 PURSUANT TO THIS SUBDIVISION, SHALL BE A CONDITION PRECEDENT TO COMMENC-
 ING AN ACTION TO FORECLOSE UPON A MORTGAGE SUBJECT TO THIS ARTICLE OR AN
 ACTION ON THE NOTE, AND THE FAILURE TO COMPLY  WITH  SUCH  RULES,  REGU-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD16957-01-0

 S. 8789                             2
 
 LATIONS  OR POLICIES SHALL BE A COMPLETE DEFENSE TO A FORECLOSURE ACTION
 OR ACTION ON THE NOTE, EVEN IF  SERVICING  HAS  BEEN  TRANSFERRED  TO  A
 DIFFERENT  MORTGAGE  SERVICER WHEN A FORECLOSURE ACTION OR ACTION ON THE
 NOTE IS COMMENCED.
   § 2. This act shall take effect immediately.

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Senate Bill S8789

Sponsored By

Archive: Last Bill Status - In Senate Committee Rules Committee

co-Sponsors

2019-S8789 (ACTIVE) - Details

2019-S8789 (ACTIVE) - Summary

2019-S8789 (ACTIVE) - Sponsor Memo

2019-S8789 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S8789

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Sponsored By

Brian Kavanagh

Archive: Last Bill Status - In Senate Committee Rules Committee

co-Sponsors

James Sanders Jr.

2019-S8789 (ACTIVE) - Details

2019-S8789 (ACTIVE) - Summary

2019-S8789 (ACTIVE) - Sponsor Memo

2019-S8789 (ACTIVE) - Bill Text download pdf

Comments