Enhances Consumer Protection Measures and Closes Loopholes to Prevent Deed Fraud and Mortgage Scams
Requires Banks to Continue Paying HOA Fees on Zombie Properties that are Part of a Co-Op
Safeguards Homeowners by Reforming Obligations of Banks and Financial Institutions during Sale of a Mortgage
Governor Andrew M. Cuomo today signed three measures enacting a package of sweeping homeowner protections. The legislation includes enhancing consumer protection measures and closing loopholes to prevent deed fraud and mortgage scams (A.5615/S.1688); requiring banks to continue paying homeowner's association fees on zombie properties that are part of a co-op (S.4182/A.1800); and safeguarding homeowners by reforming the obligations of banks and financial institutions during sale of a mortgage (A.92A/S.5017A).
"These measures enact sweeping protections for homeowners and close loopholes in order to level the playing field and preserve the American Dream for New Yorkers in every part of this great state," Governor Cuomo said. "With these new protections, we take one more step toward a fairer, stronger New York for all."
Preventing Deed Fraud and Mortgage Scams (A.5615/S.1688)
This law provides better protections for homeowners whose homes are either in default or in foreclosure. It closes loopholes to prevent deed fraud and mortgage scams, increasing the likelihood that a victim will have the opportunity to seek recovery in court.
Senator Velmanette Montgomery said, "Passing the Deed Theft Bill is a major step forward in addressing one of the most pressing issues among homeowners, especially in communities of color. Thieves target our most vulnerable homeowners and snatch generations of wealth from our families. For every one that thinks to call their elected officials or speak out, a dozen more do not know where to turn. I thank the Governor for signing this legislation. It will have a tremendous impact on homeowners in my district and throughout New York State."
Assembly Member Helene Weinstein said, "The bill has a simple point. A District Attorney can bring an action and find fraud, but there's not been a way to get the homeowner's home back. This allows the DA to get into court and have the illegal deed thrown out, and have the house restored to the owner. As it stands now there's no simple way to get it back. While it's clearly good to lock somebody up, this voids the illegal transfer and allows the owner to get their home back."
Requiring Payment of Homeowners' Association Fees (S.4182/A.1800)
This measure requires banks or mortgage holders of vacant and abandoned residential properties to continue paying homeowners' association fees or cooperative fees as needed to maintain a property when it has been abandoned during the foreclosure process. This will help to ensure properties do not become dilapidated before the foreclosure is finalized.
Senator Julia Salazar said, "Vacant and abandoned residential buildings contribute to a multitude of problems facing communities across our state. Too often banks and mortgage holders bear no responsibility to the property's neighborhood during the foreclosure process. This law ensures that co-ops and homes within HOA's are also protected from the physical or economic damage that zombie homes can incur. In turn, this protects the neighbors living among abandoned properties from the collateral consequences of housing falling into disrepair. I appreciate that Governor Cuomo is signing this legislation that will positively benefit our communities."
Assembly Member William B. Magnarelli said, "For too many New Yorkers, 'Zombie' properties place an undue financial burden on HOA's and co-op's who must maintain the abandoned property to prevent damage or deterioration to other properties in the association. But under the leadership of Governor Cuomo, residential properties are finally getting the protections they deserve. I thank Governor Cuomo for his leadership and look forward to working with him to strengthen protections for New York homeowners moving forward."
Reforming Bank Obligations During Sale of Mortgage (A.92A/S.5017A)
Consumers who are looking at loan modification options are often in difficult financial situations and are acting to save their homes from foreclosure. The process can be stressful and complicated, and sales or transfers of their loans in the midst of this process can be confusing and additionally stressful. This bill will provide consumers with certain protections if their loan is sold or transferred during the modification process. First, if the loan is transferred during the application process for a loan modification, the original holder of the loan must provide the consumer with a list of all the application documents provided to the buyer or transferee. Second, the bill ensures that that if the loan is sold or transferred after a homeowner has been approved for a modification of their mortgage that the subsequent mortgage servicer honors the terms and conditions of the approval.
Senator Kevin Parker said, "By assisting New York homeowners with protections if their loan is sold or transferred during the modification process, we are relieving taxpayers of the stressful and complicated burden that is loan modification. I commend Governor Cuomo for signing this legislation and for his continued support of taxpayers in every corner of this state."
Assembly Member Nick Perry said, "I applaud Governor Cuomo for signing a package of bills which will protect what will most likely be the largest investment most New Yorkers will ever make. A.92A, which I sponsored in the Assembly, will ensure that homeowners are protected during the modification process when financial institutions pull the trick of selling your mortgage, requiring the homeowner to restart the process; this delay often leads to foreclosure. By signing this bill into law, the Governor ensures that the process continues and the homeowner's does not lose time getting the modification approved, giving them the ability to save their home and hold onto their investment."