S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4273
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 14, 2023
                                ___________
 
 Introduced  by M. of A. HYNDMAN -- read once and referred to the Commit-
   tee on Judiciary
 
 AN ACT to amend the  real  property  actions  and  proceedings  law,  in
   relation  to  imposing a temporary ban on the commencement of mortgage
   foreclosure actions and the sale of foreclosed properties; and provid-
   ing for the repeal of such provisions upon expiration thereof
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The real property actions and proceedings law is amended by
 adding a new section 1394 to read as follows:
   §  1394.  TEMPORARY BAN ON FORECLOSURE ACTIONS AND SALES OF FORECLOSED
 PROPERTIES. 1. EXCEPT WITH RESPECT TO A VACANT  OR  ABANDONED  PROPERTY,
 STATE REGULATED SERVICERS, BANKS AND/OR CREDIT UNIONS OF A MORTGAGE LOAN
 MAY  NOT  INITIATE ANY JUDICIAL PROCESS, MOVE FOR A FORECLOSURE JUDGMENT
 OR EXECUTE A FORECLOSURE-RELATED EVICTION OR FORECLOSURE  SALE  OF  REAL
 PROPERTIES  FOR  TWELVE  MONTHS  AFTER  THE DATE THAT THE COVERED PERIOD
 ENDS.
   2. (A) DURING SUCH  MORATORIUM  PERIOD,  STATE  REGULATED  MORTGAGEES,
 LENDERS  OR  SERVICERS  ARE  REQUIRED TO EITHER: (I) SEND THE BORROWER A
 NOTICE OF DEFAULT IN ACCORDANCE WITH THE  TERM  OF  THE  MORTGAGE  LOAN,
 WHICH  SHALL  INCLUDE A LIST OF STATE CERTIFIED HOUSING COUNSELING AGEN-
 CIES AND A LIST OF STATE FUNDED LEGAL SERVICES  WHERE  THE  PROPERTY  IS
 LOCATED.  THIS  REQUIREMENT  IS NOT A SUBSTITUTE FOR THE NOTICE REQUIRED
 UNDER SECTION THIRTEEN HUNDRED FOUR OF THIS ARTICLE; (II) PARTICIPATE IN
 THE MANDATORY SETTLEMENT CONFERENCE PURSUANT TO RULE THIRTY-FOUR HUNDRED
 EIGHT OF THE CIVIL PRACTICE LAW AND RULES FOR  ALL  PENDING  FORECLOSURE
 ACTIONS  INCLUDING  ACTIONS  WHERE  THE  MORTGAGOR  APPEARED  AT A PRIOR
 SETTLEMENT CONFERENCE AND THE CASE WAS MARKED UNSETTLED.  THIS  REQUIRE-
 MENT  SHALL  NOT  APPLY TO PENDING FORECLOSURE ACTIONS WHERE A MORTGAGOR
 HAS NOT APPEARED AT A PRIOR SETTLEMENT CONFERENCE; OR (III)  ENGAGE  THE
 MORTGAGORS  IN  A  PRE-FORECLOSURE  WORKOUT TO NEGOTIATE IN GOOD FAITH A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06432-01-3
              

 A. 4273                             2
 
 MODIFICATION OR FORBEARANCE AGREEMENTS IN ACCORDANCE WITH  RULE  THIRTY-
 FOUR HUNDRED EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
   (B)  THE  MORTGAGORS MUST DEMONSTRATE COMPLIANCE WITH THIS REQUIREMENT
 IN ORDER TO COMMENCE OR PROCEED WITH  A  FORECLOSURE  ACTION  AFTER  THE
 COVERED  PERIOD  HAS EXPIRED. FAILURE TO DEMONSTRATE COMPLIANCE SHALL BE
 AN AFFIRMATIVE DEFENSE TO THE FORECLOSURE ACTION AND/OR THE BORROWER MAY
 REQUEST A BAD FAITH HEARING FOR THE LENDER  OR  SERVICER  NON-COMPLIANCE
 WITH RULE THIRTY-FOUR HUNDRED EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
 SHOULD  THE  COURT  FIND  THE  LENDER  OR SERVICER FAILED TO NEGOTIATE A
 MODIFICATION OR FORBEARANCE AGREEMENT IN GOOD FAITH, THE COURT MAY WAIVE
 ALL INTEREST ACCRUED ON THE LOAN DURING THE MORATORIUM.
   3. FOR THE PURPOSES OF THIS SECTION, THE  TERM  "THE  COVERED  PERIOD"
 SHALL MEAN FROM THE DATE THE GOVERNOR DECLARED A STATE OF DISASTER EMER-
 GENCY  OR  MARCH SEVENTH, TWO THOUSAND TWENTY UNTIL THREE HUNDRED SIXTY-
 FIVE DAYS AFTER THE DATE THE LAST REGION AND/OR COUNTY OF NEW YORK STATE
 ENTERED PHASE THREE OF THE  GOVERNOR'S  REOPENING  PLAN  FOR  THE  STATE
 RELATING TO THE COVID-19 PANDEMIC.
   §  2.  This  act shall take effect immediately and shall expire and be
 deemed repealed 1 year after such effective date.