NY State Senate Bill 2021-S337

Senate Bill S337

2021-2022 Legislative Session

Requires the foreclosing party in a residential foreclosure action to offer a refinancing opportunity to the mortgagor

download bill text pdf

Archive: Last Bill Status - Stricken

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

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Dec 15, 2021	recommit, enacting clause stricken
Jan 06, 2021	referred to housing, construction and community development

co-Sponsors

2021-S337 (ACTIVE) - Details

See Assembly Version of this Bill:: A1651
Law Section:: Real Property Actions and Proceedings Law
Laws Affected:: Amd §1303, RPAP L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S5124, A6656
2023-2024: A6644

2021-S337 (ACTIVE) - Summary

Requires the foreclosing party in a residential foreclosure action to offer a refinancing opportunity to the mortgagor.

2021-S337 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S337

SPONSOR: PERSAUD
 
TITLE OF BILL:

An act to amend the real property actions and proceedings law, in
relation to requiring the foreclosing party in a residential foreclosure
action to offer a refinancing opportunity to the mortgagor

 
PURPOSE:

To provide homeowners the opportunity to refinance their home when they
receive a foreclosure notice.

 
SUMMARY OF PROVISIONS:

Section one of the bill adds subdivision 3-b to § 1303 of the real prop-
erty actions and proceedings law to require that whenever a bank, or a
financial institution that offer mortgages for residential real property
as part of its regular course of business, is the sole holder of a mort-
gage on the property and delivers a foreclosure notice to a residential

mortgagor of an owner-occupied one-to-four family dwelling, that the
aforementioned bank or financial institution also provide an offer to
refinance the mortgage at the same time. The refinancing offer shall be
at the lowest rate offered within the thirty days preceding the origi-
nation of the foreclosure proceeding regardless of the borrower's credit
rating, income, assets, or payment history.The offer to refinance shall
be proffered only once during the foreclosure proceeding or while the
property is owned by the same person. This section also states that its
application is limited to when the foreclosing party is a bank or finan-
cial institution that offers mortgages for residential real property as
part of its regular course of business and is the sole holder of the
mortgage on the property.

Section two of the bill provides the effective date.

 
JUSTIFICATION:

New Yorkers are still feeling the economic impacts of the 2008 financial
crisis. The 2017 Report of the Chief Administrator of the Courts on the
Status of Foreclosures found that there were 50,000 foreclosure cases
pending in New York State. At the time the report was published there
were approximately 27,000 new filings, an amount greater than before the
crisis began in 2007. In addition, according to ATTOM Data Solutions, a
firm that tracks foreclosures, New York was at its highest rate of fore-
closure auctions since 2006, up 9%, bucking the national trend. In fact,
New York ranked 10th in foreclosure rates by state, with 1 home in every
1,672 being foreclosed on. And most alarmingly, according to a 2017
Patch article, the high foreclosure rate for the borough of Brooklyn can
be attributed almost exclusively to impacted neighborhoods in East
Brooklyn.

The Legislature has enacted numerous laws to assist homeowners threat-
ened by foreclosure; however, these startling statistics demonstrate
that more needs to be done and that homeowners need other options to
foreclosure. One option that banks typically offer homeowners is a loan
modification, which may help a homeowner in the short term by reducing
their monthly payment, but comes at the cost of considerably lengthening

the loan over a significant amount of years and potentially putting them
at risk of losing their home in the future.

A better option to help people stay in their homes is by providing home-
owners the option to refinance their mortgage. Amongst other things,
this option allows homeowners to utilize the equity that they have built
up in their home through any number of factors including but not limited
to, the increase in market value of their home. If a homeowner is able
to refinance their home, potentially at a lower interest rate, they may
be able to receive a monthly mortgage payment that not only is more
manageable but is also structured in such a way where the debt is
significantly less and facilitates an environment that will help home-
owners avoid foreclosure. Enactment of this legislation will afford
people a greater opportunity to stay in their homes.

 
PRIOR LEGISLATIVE HISTORY:

2019-2020: 55124 referred to Senate Housing, Construction and Community
Development

 
FISCAL IMPLICATIONS:

None to the State

 
EFFECTIVE DATE:
Sixtieth day after becoming law and shall apply to all foreclosures on
residential properties begun on or after such date.

2021-S337 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    337
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by  Sen. PERSAUD -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN  ACT  to  amend  the  real  property  actions and proceedings law, in
   relation to requiring the foreclosing party in a residential  foreclo-
   sure action to offer a refinancing opportunity to the mortgagor
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 1303 of the real property actions  and  proceedings
 law is amended by adding a new subdivision 3-b to read as follows:
   3-B.  (A) AT THE TIME THE NOTICE TO ANY RESIDENTIAL MORTGAGOR REQUIRED
 BY PARAGRAPH A OF SUBDIVISION ONE OF THIS SECTION IS  DELIVERED  TO  THE
 MORTGAGOR  OR  THE  MORTGAGOR'S  AGENT, THE FORECLOSING PARTY SHALL ALSO
 PROVIDE AN OFFER TO THE MORTGAGOR TO REFINANCE THE MORTGAGE. SUCH  OFFER
 SHALL  BE INCLUDED WITH THE SUMMONS AND COMPLAINT AT THE TIME SUCH DOCU-
 MENTS ARE SERVED UPON THE MORTGAGOR OR THE MORTGAGOR'S AGENT.
   (B) THE REFINANCING OFFER DESCRIBED IN PARAGRAPH A OF THIS SUBDIVISION
 SHALL BE AN OFFER TO REFINANCE THE MORTGAGE AT THE LOWEST INTEREST  RATE
 OFFERED  BY  THE  FORECLOSING  PARTY WITHIN THE THIRTY DAYS PRIOR TO THE
 COMMENCEMENT OF THE FORECLOSURE PROCEEDING, AND SHALL BE IRRESPECTIVE OF
 THE BORROWER'S CREDIT RATING, INCOME, ASSETS OR PAYMENT HISTORY.
   (C) A FORECLOSING PARTY SHALL NOT BE  REQUIRED  TO  OFFER  REFINANCING
 PURSUANT  TO  THIS  SUBDIVISION  MORE  THAN  ONE  TIME  IN A FORECLOSURE
 PROCEEDING OR MORE THAN ONE TIME WITH RESPECT TO THE SAME PROPERTY WHILE
 THE PROPERTY IS OWNED BY THE SAME MORTGAGOR.
   (D) THE PROVISIONS OF THIS SUBDIVISION SHALL ONLY APPLY WHEN THE FORE-
 CLOSING PARTY IS A BANK OR FINANCIAL INSTITUTION THAT  OFFERS  MORTGAGES
 FOR  RESIDENTIAL REAL PROPERTY AS PART OF ITS REGULAR COURSE OF BUSINESS
 AND IS THE SOLE HOLDER OF THE MORTGAGE ON THE PROPERTY.
   § 2. This act shall take effect on the sixtieth  day  after  it  shall
 have  become  a  law  and shall apply to all foreclosures on residential
 properties commencing on or after such date.

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03260-01-1

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Senate Bill S337

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Sponsored By

Roxanne J. Persaud