Sillitti, Colton, Anderson, Barrett, Simon, Davila, Steck, Taylor, De Los Santos
MLTSPNSR
Requires a stay of certain foreclosure proceedings where the mortgagor has applied for coverage under the New York state homeowner assistance fund or any local program administering federal emergency mortgage assistance program funds; allows such foreclosure proceedings to proceed against a mortgagor who has caused significant damage to the property.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1827
SPONSOR: Jean-Pierre TITLE OF BILL:
An act to stay certain foreclosure proceedings
PURPOSE:
To prevent foreclosure proceedings from being commenced until a determi-
nation of eligibility for the New York state homeowner assistance fund
or any local program administering federal funding for emergency mort-
gage assistance has been made if the mortgagor has applied for such
assistance.
SUMMARY OF PROVISIONS:
Section 1 prohibits the commencement of foreclosure proceedings for
non-payment of mortgage payments that would be eligible for mortgage
assistance funding if the mortgagor has applied for such assistance. If
the mortgagor is approved, foreclosure proceedings may not be commenced,
if the mortgagor is determined to be ineligible, the foreclosure
proceedings may be filed and continue. If a mortgagor presents evidence
of a payment made from a mortgage assistance fund, such evidence creates
a presumption that the obligation for the time period covered by the
payment is fully satisfied.
Section 2 establishes that this bill does not apply when a mortgagor
causes significant property damage to the subject of the action, subject
to the following caveats. First petitioner must file an affidavit under
penalty of perjury that says that mortgagor intentionally caused such
damage and a specific description of the damages. Second, a previously
filed foreclosure proceeding did not claim significant property damage,
the petitioner must file a new petition with those allegations and the
petition must be served and filed according to article 13 of the Real
Property Actions and Proceedings Law. Third, a mere allegation of behav-
ior does not establish that the mortgagor intentionally caused such
damage. Fourth, if the petitioner fails to establish that the mortgagor
intentionally caused significant damage, a pending foreclosure action
will be stayed, and a foreclosure action where the mortgagee has
accepted past-due payments and agreed not to foreclose on the property
will be dismissed with prejudice. Fifth, if the petitioner has estab-
lished that the mortgagor has intentionally caused significant damage to
the property, the action may continue according to RPAPL section 13.
Section 3 is the effective date.
JUSTIFICATION:
The COVID-19 pandemic has been a cataclysmic event, millions of people
lost their jobs two years ago, and as a result, Congress passed aid
packages to help homeowners and renters during the pandemic. The state
has received federal approval to distribute $539m for eligible New York
homeowners, but this program will take time to roll out and fully, proc-
ess applications for the relief. In the meantime, the foreclosure mora-
torium is currently slated to end January 15th, leaving thousands of New
York homeowners in difficult waters to navigate during the coldest
months of the year.
In order to prevent New Yorkers who have applied for aid or may be
eligible for aid from losing their homes, it is necessary to put a
temporary stay on foreclosure proceedings until either mortgage assist-
ance has been distributed to the homeowner, or a determination that the
homeowner is ineligible for the assistance has been made. As a result,
it is imperative that New York work to make sure that the legal system
does not work ahead of the distribution system for the mortgage assist-
ance that New Yorkers need and are qualified for.
This bill helps to slow a legal system that does not have any off-ramps
to slow foreclosure if a homeowner has applied for mortgage assistance.
By requiring a stay until a determination or distribution is made,
people will be allowed to keep their houses.
LEGISLATIVE HISTORY:
2021-2022: A9076/S7637 - Referred to Judiciary
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
1827
2023-2024 Regular Sessions
IN ASSEMBLY
January 23, 2023
___________
Introduced by M. of A. JEAN-PIERRE, SILLITTI, COLTON, ANDERSON, BARRETT,
SIMON, DAVILA, STECK, TAYLOR, DE LOS SANTOS -- read once and referred
to the Committee on Judiciary
AN ACT to stay certain foreclosure proceedings
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Except as provided in section two of this act, foreclosure
2 proceedings for non-payment of mortgage payments that would be eligible
3 for coverage under the New York state homeowner assistance fund adminis-
4 tered by the division of housing and community renewal shall not be
5 commenced against a mortgagor who has applied for such coverage or any
6 local program administering federal emergency mortgage assistance
7 program funds unless or until a determination of ineligibility is made.
8 Except as provided in section two of this act, in any pending foreclo-
9 sure proceeding, whether filed prior to, on, or after the effective date
10 of this act, against a mortgagor who has applied or subsequently applies
11 for benefits under the New York state homeowner assistance fund or any
12 local program administering federal emergency mortgage assistance
13 program funds to cover all or part of the arrears claimed by the peti-
14 tioner, all proceedings shall be stayed pending a determination of
15 eligibility. Evidence of a payment received pursuant to the New York
16 state homeowner assistance fund or a local program administering federal
17 emergency mortgage assistance program funds may be presented in such
18 proceeding and create a presumption that the mortgagor's obligation for
19 the time period covered by the payment has been fully satisfied.
20 § 2. Section one of this act shall not apply if a mortgagor inten-
21 tionally causes significant damage to the property that is the subject
22 of the mortgage agreement, provided:
23 1. If a foreclosure proceeding is not pending on the effective date of
24 this act, the petitioner shall file an affidavit under penalty of perju-
25 ry with the petition attesting that the respondent intentionally caused
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03021-01-3
A. 1827 2
1 significant damage to the property, with a specific description of the
2 damages alleged.
3 2. If a foreclosure proceeding is pending on the effective date of
4 this act, but the petitioner has not previously alleged that the mortga-
5 gor intentionally caused significant damage to the property, the peti-
6 tioner shall be required to submit a new petition with such allegations
7 and comply with all notice and service requirements under article thir-
8 teen of the real property actions and proceedings law.
9 3. For the purposes of this act, a mere allegation of the behavior by
10 the petitioner or an agent of the petitioner alleging such behavior
11 shall not be sufficient evidence to establish that the mortgagor has
12 intentionally caused significant damage to the property.
13 4. If the petitioner fails to establish that the mortgagor inten-
14 tionally caused significant damage to the property: (i) if the
15 mortgagor's application is still pending, the court shall stay or
16 continue to stay any further proceedings pending a determination of
17 eligibility pursuant to section one of this act; or (ii) if the mortga-
18 gee has accepted payment of mortgage arrears and agreed not to foreclose
19 the mortgage, the court shall dismiss the proceeding with prejudice.
20 5. If the petitioner establishes that the mortgagor intentionally
21 caused significant damage to the property, the proceeding may continue
22 pursuant to article thirteen of the real property actions and
23 proceedings law.
24 § 3. This act shall take effect immediately.
