Provides that any person who has been injured by reason of any violation of any such rules, regulations or policies as the superintendent may promulgate may bring an action in his or her own name; assert a counterclaim; or, if an action is commenced by the mortgagee or anyone acting on its behalf, bring a third party claim, against either the mortgagee and/or the mortgage servicer to enjoin any violations thereof; authorizes damages; makes related provisions.
STATE OF NEW YORK
2023-2024 Regular Sessions
January 23, 2023
Introduced by M. of A. DINOWITZ, SEAWRIGHT, SIMON, DICKENS, GLICK,
TAPIA, FORREST -- Multi-Sponsored by -- M. of A. McDONOUGH -- read
once and referred to the Committee on Banks -- committee discharged,
bill amended, ordered reprinted as amended and recommitted to said
AN ACT to amend the banking law, in relation to mortgage loan servicers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 595-b of the banking law is amended by adding two
2 new subdivisions 3 and 4 to read as follows:
3 3. Actions and damages. (a) Any person who has been injured by reason
4 of any violation of any such rules, regulations or policies as the
5 superintendent may promulgate to effectuate the purposes of this arti-
6 cle, including but not limited to 3 NYCRR 419 or any subsequently
7 promulgated mortgage servicing rules pursuant to this subdivision, may:
8 (i) Bring an action in his or her own name;
9 (ii) Assert a counterclaim; or
10 (iii) If an action is commenced by the mortgagee or anyone acting on
11 its behalf, bring a third party claim, against either the mortgagee
12 and/or the mortgage servicer to enjoin any violations thereof.
13 (b) The person injured pursuant to this section:
14 (i) May recover statutory damages of one thousand dollars per
16 (ii) May recover treble actual damages; and
17 (iii) If awarded damages or injunctive relief, shall also be entitled
18 to recover costs and expenses, including but not limited to reasonable
19 attorneys' fees.
20 (c) The mortgagee and the mortgage servicer shall be jointly and
21 severally liable for any recoveries by an injured mortgagor in any
22 action brought pursuant to this subdivision.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
A. 2131--A 2
1 4. Compliance with rules, regulations or policies. Material compliance
2 with any such rules, regulations or policies as the superintendent may
3 promulgate to effectuate the purposes of this article, including but not
4 limited to 3 NYCRR 419 or any subsequently promulgated mortgage servic-
5 ing rules pursuant to this subdivision, shall be a condition precedent
6 to commencing an action to foreclose upon a mortgage subject to this
7 article or an action on the note, and the failure to materially comply
8 with such rules, regulations or policies shall be a defense to a fore-
9 closure action or action on the note, even if servicing has been trans-
10 ferred to a different mortgage servicer when a foreclosure action or
11 action on the note is commenced.
12 § 2. This act shall take effect on the thirtieth day after it shall
13 have become a law.