New York Proposes Foreclosure Action Law
January 25, 2017
S3640 – SPONSOR MEMO
BILL NUMBER: S3640
TITLE OF BILL : An act to amend the real property actions and proceedings law, in relation to requiring a plaintiff in a mortgage foreclosure action to maintain the subject property in good faith.
To require plaintiffs in mortgage foreclosure actions to Act in good faith at the commencement of a foreclosure action and throughout the
SUMMARY OF PROVISIONS :
Section 1307 of the real property, actions and proceedings law is amended to require plaintiffs from the commencement of foreclosure proceedings to obtain a mortgage foreclosure in ‘good faith’ and defines ‘good faith’ as honesty in fact and the observance of reasonable standards of fair dealing.
Due to New York State’s struggling financial situation a financial crisis emerged causing citizens to fall behind on their mortgages and in many instances leave or abandon their homes. In some instances the foreclosing institution will commence the process but not follow
through or delay taking control of the property which in some instances can cause the property to become unmaintained and blighted
in the surrounding neighborhoods. This law would obligate mortgage foreclosure plaintiffs to act in good faith when it commences a foreclosure and throughout the foreclosure process. Financial institutions cannot delay in taking action in controlling and providing upkeep on the vacant dwelling itself.
LEGISLATIVE HISTORY :
2015-16: S.1779/A.335 – Referred to Housing Construction and Community Development
2013-14: S.4055/A.7027 -Referred to Housing Construction and Community Development
FISCAL & LOCAL IMPLICATIONS :
EFFECTIVE DATE :
Immediately after the bill has become law.
Source: The New York State Senate (S3640 full text)