As of December 23, 2016, the laws created and amended by Bill S8159 took effect.
These changes affect everything from pre-foreclosure notices, settlement conferences
and the handling of vacant properties within the State of New York. This article
highlights some of the key changes that are now in effect.
Vacant Property Requirements
Mortgage servicers are required to be diligent in determining whether properties subject
to foreclosure are vacant and/or abandoned. The newly created Real Property Actions
and Proceedings Law (“RPAPL”) Section 1308 requires servicers to:
within 7 business days of determining the property is vacant and abandoned;
Secure the property, including:
The new law precludes a servicer from removing personal property from abandoned
property unless the personal property poses a significant health or safety issue or
directed by court order. The requirements of RPAPL §1308 remain in effect until the
earlier of (1) the borrower filing bankruptcy, (2) access precluded by homeowner
association or cooperative, (3) change in servicing or ownership, or (4) court order.
Violators can face penalties of up to $500 per day as well as enforcement proceedings
by the local municipality.
Vacant Property Registrations
In addition to the normal state registration (relating to the mailing of the 90 day notices),
the new law requires mortgage servicers to register vacant properties with the New York
State Department of Financial Services. Under RPAPL §1310, registration of the vacant
property must occur within 21 business days from the servicer determining that the
property is vacant and abandoned. Registration is effectuated by logging into the
Department of Financial Services’ website similar to the current 90-day notice
registration. To access the website,
register the property, the servicer is required to provide:
In addition to the initial registration, the servicer is under an ongoing obligation to report
material changes to the initial registration within 30 days of any change. The
Department of Financial Services has also created a toll-free hotline where neighbors
can report hazards or other concerns relating to the vacant properties. This will likely
lead to the issuance of additional violation notices so it is important that vacant
properties be maintained throughout the foreclosure proceedings.
Expedited Foreclosure Judgment For Vacant Properties
All counties in New York now have an expedited foreclosure process. RPAPL §1309
provides an expedited foreclosure judgment process for vacant and abandoned
properties throughout the State. To qualify, an application under these rules must be
accompanied by an affidavit from the lender or servicer that provides:
If a borrower files an answer, a notice of appearance, or any other document contesting
the foreclosure action, then the property (even if vacant) is not eligible for the expedited
CPLR 3408 is revised to include additional documentation requirements for the
settlement conferences, including initial documentation to be brought to the settlement
conference, additional information to be provided pertaining to the loss mitigation review
and decision, as well as the expectation that the parties negotiate in “good faith” and the
penalties for failing to negotiate in “good faith”.
Servicers must now bring the following documentation to the settlement conferences:
If loss mitigation review is pending at the time of the conference, the servicer must
provide the current status of the review and the expected date of completion of the
review. If a borrower is denied for a modification, a detailed denial letter must be
provided along with data input fields and values used in a net present value evaluation.
If a denial is based upon an investor restriction, the plaintiff must then bring a copy of
the pooling and servicing agreement to court.
The following factors will now be utilized by the court in its analysis of whether parties
are acting in “good faith”:
Under the revised statute, a court, upon the finding of a failure to negotiate in “good
notice of discontinuance of the action and cancellation of the notice of pendency within
The newly revised CPLR 3408 also extends a defendant’s time to answer the complaint
to 30 days from the date of the first settlement conference.
Changes to the Statutory Language of the Help for Homeowners Notice
The “Help for Homeowners Notice” required under RPAPL §1303 is typically provided
by the plaintiff’s counsel in conjunction with the service of the summons and complaint.
The Notice is revised to include a section titled “Rights and Obligations”. This provision
instructs the borrower that the borrower has a continuing obligation to take care of the
property and to pay property taxes while the foreclosure process is ongoing.
Changes to the Statutory Language Used in the 90-Day Notice
RPAPL §1304 contains new mandatory statutory language to be utilized in the 90-day
notice. The new form can be found by clicking on the “English” version in the following
The changes include the elimination of the language “[y]ou can cure this default by
making the payment of ___ dollars by ___.” The new statutory language is now clearer
by stating “[a]s of ___, your home loan is __ days and ____ dollars in default.”
It is also important to note two additional changes to the law: First, only one 90-day
letter must be sent in a 12-month period relating to the same delinquency. This means
that a new 90-day letter must be sent if the borrower cures a default and then re-
defaults in the same 12-month period. This is a change from the prior version of the
statute, which did not currently require the additional mailing. Second, if the servicer
knows that English is not the borrower’s primary language, the statute also requires the
90-day notice be sent in one of six most common non-English languages. The
translated notices are available on the Department of Financial Services’ website by
clicking on the following link: http://www.dfs.ny.gov/banking/hetpfnotice.htm.
Also, note that the Department of Financial Services updated its list of housing
counseling agencies on December 12, 2016. A list of at least 5 housing counseling
agencies is required to be mailed with the 90-day notice. The list is available by clicking
on the following link:
RPAPL §1351 is amended to require the referee to sell the property at a referee’s sale
within 90 days of the entered judgment. It is currently unclear how each of the local
jurisdictions will ensure compliance with this amendment. The purpose of the law was to
make certain that properties are timely sold after a judgment is entered. However, the
law did not take into account the backlog in some of the courts, including Richmond
County where a sale is only held once a month and is scheduled more than three
Lastly, if the foreclosing plaintiff acquires the property at foreclosure sale, newly enacted
RPAPL §1353 now requires that the plaintiff place the property for sale within 180 days
of the execution of the referee’s deed or within 90 days of completion of the
renovation/rehabilitation of the property, whichever occurs first.
A full copy of the Bill and the new changes can be found at
Stern & Eisenberg, P.C. is here to help ensure your compliance with these statutory
changes. Please contact Margaret J. Cascino at 516-630- 0288 x1310 with any
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