NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1935
SPONSOR: Perry TITLE OF BILL:
An act to amend the banking law, in relation to modifying delinquent
home loans and single point of contact
PURPOSE:
The bill requires creditors to provide a single point of contact to
borrowers in the foreclosure process who will be responsible for provid-
ing accurate account and other information related to the foreclosure
process and loss mitigation efforts. The bill requires creditors to
provide a dedicated electronic mail, address, facsimile number and mail-
ing address for borrowers to submit information requested as part of a
loan modification, short sale or other loss mitigation option.
SUMMARY OF PROVISIONS:
Section one of the bill adds § 6-o to the banking law. Subdivision one
requires the lender to provide a borrower who is delinquent on his or
her home loan sixty day or more and chooses to pursue a loan modifica-
tion or other foreclosure prevention alternative, a single point of
contact for the borrower to reach the lender regarding pursuing a loan
modification. The borrower shall make his or her request for the contact
information in writing or by electronic communication and once received,
the lender is required to provide the contact information to the borrow-
er within ten days. The lender is also required to notify the borrower
if the contact information provided to the borrower changes within five
days. This subdivision also provides that the duties imposed on the
lender by this section may be also be performed by a mortgage servicer
acting on behalf of the lender.
Subdivision two requires that the single point of contact to be respon-
sible for the following:
A. Communicating the options available to the borrower for modifying his
or her delinquent home loan.
B. Assisting the borrower with identifying documents necessary for
pursuing a loan modification.
C. Providing the borrower accurate information regarding the status of
his or her loan modification application should the borrower choose to
apply for a modification.
Subdivision three requires that the single point of contact remain
assigned to the borrower's account until the lender determines all loss
modification options have been exhausted or the borrower's account
becomes current.
Subdivision four provides that "home loan" shall have the same defi-
nition as paragraph (e) of subdivision one of section six-1 of this
article.
Section two of the bill provides the effective date.
JUSTIFICATION:
As our state and our nation slowly recover from the nation's financial
crisis, many homeowners are still trying to recover from the financial
impact of the crisis. Massive foreclosures have crippled our economy and
have made the recovery from the crisis very slow. While the economy
strengthens and employment grows, many citizens are trying to rebuild
their lives. One way many homeowners have tried to rebuild their lives
is to work to save the largest asset many of them own: their home. As
the bottom dropped out of the economy, many citizens lost their jobs and
fell behind on their mortgages. Many people who had owned their homes
for years or even decades found themselves unable to keep up with their
payments even though they may have never missed a payment before the
crisis.
As the job market has strengthened and people returned to work, homeown-
ers have reached out to their mortgage servicers to determine if there
are any federal, state, or investor foreclosure mitigation program
available to them. Many homeowners were told of these programs and were
encouraged to apply. Many homeowners tried to apply for these mitigation
programs only to find out that the programs were nearly impossible to
gain approval.
On February 9, 2012, the U.S. Attorney General announced that the feder-
al government and 49 states had reached a settlement agreement with the
nation's five largest mortgage servicers to address mortgage servicing,
foreclosure, and bankruptcy abuses (the "National Mortgage Settlement").
The National Mortgage Settlement is the largest consumer financial
protection settlement in United States history. The National Mortgage
Settlement was made after state and federal investigations into mortgage
foreclosure activities revealed extensive mortgage servicing misconduct,
including, but not limited to, deceptive practices in the loan modifica-
tion process such as telling borrowers that a loan modification was
imminent while simultaneously foreclosing, repeatedly asking for the
same documents, denying a modification and not informing the borrowers,
and giving the borrower incorrect information regarding their modifica-
tion application.
This bill will require a lender to appoint to the borrower one contact
person who will be responsible for all communications with the borrower
and who will be responsible for the entire process. Having one person
responsible will make it less likely that a borrower who is trying to
save his or her home will fall victim to the bureaucracy of the fore-
close mitigation process and of the very large mortgage servicers.
PRIOR LEGISLATIVE HISTORY:
2020:A.7513/S 8761- Third Reading Calendar / Passed Senate
2019:A.7513/S.2105- Referred to Banks / Passed Senate
2017-2018: - S.3216 - Referred to Banks
2015-2016: - S.3768 - Referred to Banks
2014: S.6243 - Referred to Banks
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
Sixty days after becoming law and shall apply to home loans enter into
after the effective date.
STATE OF NEW YORK
________________________________________________________________________
1935
2021-2022 Regular Sessions
IN ASSEMBLY
January 13, 2021
___________
Introduced by M. of A. PERRY -- read once and referred to the Committee
on Banks
AN ACT to amend the banking law, in relation to modifying delinquent
home loans and single point of contact
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The banking law is amended by adding a new section 6-o to
2 read as follows:
3 § 6-o. Single point of contact for modifying delinquent home loans. 1.
4 A lender shall provide to a borrower who is sixty or more days delin-
5 quent on his or her home loan with such lender and who chooses to pursue
6 a loan modification or other foreclosure prevention alternative, a
7 single point of contact for the borrower to reach the lender regarding
8 pursuing a loan modification. The borrower shall make his or her request
9 for such contact information in writing or by electronic communication
10 to his or her lender and such lender shall provide the contact informa-
11 tion required herein within ten business days of receiving such borrow-
12 er's request. If at any time the contact information provided to the
13 borrower changes, a notification of such change shall be provided by the
14 lender to the borrower within five business days of such change. The
15 duties imposed on a lender by this section may also be performed by a
16 mortgage servicer acting on behalf of such lender.
17 2. The single point of contact required by this act shall be responsi-
18 ble for the following:
19 (a) communicating information regarding options the borrower may have
20 for modifying his or her delinquent home loan;
21 (b) assisting the borrower with identifying documents necessary for
22 pursuing a loan modification; and
23 (c) providing accurate information regarding the status of a borrow-
24 er's loan modification application should such borrower choose to apply
25 for a modification.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD04015-01-1
A. 1935 2
1 3. The single point of contact required by this section shall remain
2 assigned to the borrower's account until such time as the lender deter-
3 mines that all loss modification options have been exhausted or until
4 the borrower's account becomes current.
5 4. For the purposes of this section, "home loan" shall have the same
6 meaning as defined in paragraph (e) of subdivision one of section six-l
7 of this article.
8 § 2. This act shall take effect on the sixtieth day after it shall
9 have become a law and shall apply to home loans entered into on or after
10 such effective date.
