New York Amends and Enacts Foreclosure Provisions
New York recently amended and enacted several statutory provisions that relate to foreclosures. These provisions take effect on December 20, 2016.
First, there are some changes that effect mandatory settlement conferences for foreclosure actions on real property of which the defendant is a resident. The legislation states that at the conference, parties should discuss the possibility of a modification, short sale, deed in lieu of foreclosure and other loss mitigation options. Parties may be required to bring specific documents however, the court will inform each side, in advance, of what items may be required. Each party has a duty to negotiate in good faith but an agreement does not have to be reached in order for this requirement to be satisfied. It should be noted that failure to negotiate in good faith may result in a court awarded sanction.
Expedited Application for Judgment of Foreclosure on Vacant Property
Another change involves foreclosures of vacant property. The plaintiff may make an expedited application for judgment of foreclosure and sale of such property. It should be noted that “vacant and abandoned residential property means residential real property, as defined in section thirteen hundred five of this article, with respect to which the plaintiff has proven, by preponderance of the evidence, that it has conducted at least three consecutive inspections of such property, with each inspection conducted twenty-five to thirty-five days apart and at different times of the day, and at each inspection (i) no occupant was present and there was no evidence of occupancy on the property to indicate that any persons are residing there; and (ii) the residential real property was not being maintained in a manner consistent with the standards set forth in New York property maintenance code chapter 3 sections 301, 302 (excluding 302.2, 302.6, 302.8), 304.1, 304.3, 304.7, 304.10, 304.12, 304.13, 304.15, 304.16, 307.1 and 308.1.” The statue also provides a few other instances in which a property is deemed vacant such as a building occupied seasonally, the absence of windows or blinds, disconnected utilities and more.
Vacant and Abandoned Property Electronic Registry
Another update is the establishment of a statewide vacant and abandoned property electronic registry maintained by the Department of Financial Services. Lenders, assignees or servicers must inform the Department of an abandoned property within 21 days of when they learn or should learn that it is abandoned.
A final New York amendment includes a revision to the statutory format for notice that servicers provide to the borrower. For example, notices must inform the occupant that they have a right to remain in their home until they are ordered by a court to leave the premises. The legislation provides examples with the required updates.
For a link to the Senate bill please see: https://www.nysenate.gov/legislation/bills/2015/S8159