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A07737 Summary:

COSPNSRZinerman, Seawright, Colton, Simon, Zebrowski, Pretlow, Burdick, Bronson, Davila, Englebright, Dinowitz, Glick, Sayegh, Abinanti, Eichenstein, Rosenthal D, Weprin, Gallagher, Tapia, Forrest, Otis, Carroll, Hunter, Hyndman, Galef, Jackson, Anderson, Jean-Pierre, Fernandez, Cook, Bichotte Hermelyn
Amd §§203, 205 & 213, R3217, add §205-a, CPLR; amd §17-105, Gen Ob L; amd §1301, RPAP L
Relates to the rights of parties involved in foreclosure actions; provides additional details regarding the commencement and termination of certain actions related to real property.
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A07737 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
SPONSOR: Weinstein
  TITLE OF BILL: An act to amend the real property actions and proceedings law, the general obligations law and the civil practice law and rules, in relation to the rights of parties involved in actions commenced upon real property related instruments   PURPOSE AND INTENT OF BILL: The legislature finds that there is an ongoing problem with abuses of the judicial foreclosure process and lenders' attempts to manipulate statutes of limitations; that the problem has been exacerbated by recent court decisions which, contrary to the intent of the legislature, have given mortgage lenders and loan servicers opportunities to avoid strict compliance with remedial statutes and manipulate statutes of limitation to their advantage; and that the purpose of the present legislation is to clarify the meaning of existing statutes, and to rectify these erro- neous judicial interpretations thereof. Accordingly, this bill amends certain statutes and rules to clarify the existing law and overturn certain court decisions to ensure the laws of this state apply equally to all litigants, including those currently involved in mortgage foreclosure actions, in order to ensure that parties purporting to sue on mortgage debt are bound by the same stat- utes of limitations that bind all other litigants. The aim of the bill is to thwart and eliminate abusive and unlawful litigation tactics that have been adopted and pursued in mortgage foreclosure actions to manipu- late the law and judiciary to yield to expediency and the convenience of mortgage banking and servicing institutions at the expense of the final- ity and repose that statutes of limitations are meant to ensure. The gravity of the aforementioned problem, and the legislature's deter- mination to remedy same, is illustrated by the determination of the legislature in passing this bill to apply to all actions governed by CPLR 213 (4) in which a final judgment of foreclosure and sale has not yet been enforced.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the bill contains the title of the bill, the "foreclosure abuse prevention act". Section 2 amends the RPAPL to address the deleterious and onerous effect of a recent decision of the Appellate Division in Citi Mortgage, Inc. v. Ramirez, 192 AD3d 70 (2020), which effectively gives mortgagees a second bite of the mortgage apple, permitting actions to be instituted on a note after a foreclosure action based on the same debt has already been adjudicated to be barred by the statute of limitations, making a mockery of the well well-settled statutory and case law concerning election of remedies in connection with proceedings to enforce mortgage debts. Section 3 of the bill makes conforming changings to the General Obli- gations Law to create clear limits on when a cause of action to fore- close a mortgage accrues. Sections 4, 5 and 7 make conforming changes to the statute of limita- tions provisions in the CPLR to clarify the relevant accrual periods for actions upon a mortgage and note. Section 6 of the bill creates a new "savings" statute expressly for mortgage foreclosure cases in order to address judicial decisions that have been contrary to the spirit of this savings provision which have been overly indulgent of foreclosure plaintiffs whose cases have been dismissed for various forms of neglect, who are not entitled to the six months grace period meant for diligent plaintiffs whose cases were dismissed for reasons that do not reflect their own fault. This will ensure that mortgagees do not have an unfettered ability to bring numer- ous successive actions on the same mortgage, without any limitation in law. Section 8 of the bill amends CPLR Sec. 3217 as concerns discontinuance of mortgage foreclosure actions, and is a response to the Court of Appeals recent holding Freedom Mtge. Corp. v Engel,37 NY3d 1 (2021). This will restore longstanding law that made it clear that a lenders' discontinuance of a foreclosure action that accelerated a mortgage loan does not serve to reset the statute of limitations. Section 9 contains a severability clause. Section 10 contains the effective date and makes it clear that this legislation will apply immediately, and will apply to all such actions commenced where a final judgment of foreclosure and sale has not been enforced.   JUSTIFICATION: As a direct result of the aforementioned judicial decisions, thousands of New York homeowners who secured closure of their cases by operation of longstanding statute of limitations principles are at risk of an onslaught of successive foreclosure actions that would otherwise be barred by the statute of limitations under longstanding statutory and case law. This will cause the loss of countless homes and will burden the Courts, which had significant budget cuts and forced retirement of-dozens of senior judges, with cases that should be barred by the statute of limitations and with excessive motion practice now that the foreclosure moratoriums have ended. This bill levels the fields for all homeowners, and ensures the statute of limitation applies to all parties equally without exemption.   PRIOR LEGISLATIVE HISTORY: New Bill, 2021.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: Immediately and will apply to all such actions commenced where a final judgment of foreclosure and sale has not been enforced.
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