Enacts the "deed protection act" in relation to prohibiting a mortgage banker or mortgage loan servicer from commencing, maintaining, or proceeding with a foreclosure action on a mortgage loan where such mortgage banker or mortgage loan servicer knows or has reason to know that the mortgage securing such loan is dependent on a deed, conveyance, or other instrument affecting title to residential real property that was procured by fraud, forgery, or other unlawful means.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9554B
SPONSOR: Meeks TITLE OF BILL:
An act to amend the banking law, in relation to enacting the "deed
protection act"
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of the bill is to prevent foreclosure on victims of deed
theft.
SUMMARY OF PROVISIONS:
Section One: Titles the bill as the "Deed Protection Act"
Section Two: Adds a new Section 595-d to the Banking law.
Subdivision One: Prohibits mortgage banks and mortgage loan servicers
from foreclosing on a residential property if they know or should know
that the mortgage loan is derived from a deed procured by fraud,
forgery, or unlawful acts.
Subdivision Two: Requires lenders to review the mortgage loan and rele-
vant documents to ensure the mortgage is secured by a legitimate, valid
ownership interest in the property.
Subdivision Three: Specifies that this bill doesn't impede any right or
remedy related to fraud or forgery.
Subdivision Four: Establishes that a violation of this section is a
violation of Article 12-D of the banking law which governs licensed
mortgage bankers and mortgage loan servicers.
Section Three: Effective Date.
JUSTIFICATION:
Citizens throughout the state have reported that they have lost homes
due to fraudulent mortgages borrowed against homes that they own. It is
incumbent upon financial institutions to verify the rightful owner of a
property prior to bringing a foreclosure action. Many New Yorkers who
have fought to obtain the American Dream of homeownership have become
victims of this predatory practice.
PRIOR LEGISLATIVE HISTORY:
New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
9554--B
IN ASSEMBLY
January 14, 2026
___________
Introduced by M. of A. MEEKS, MAGNARELLI, REYES, CUNNINGHAM, GLICK,
SOLAGES, SCHIAVONI, WRIGHT, KASSAY, P. CARROLL, RAGA, LUNSFORD,
VALDEZ, STIRPE, LUPARDO, McMAHON, CASHMAN, CLARK, BRONSON, HEVESI,
LAVINE, FORREST, HYNDMAN, ANDERSON, LEE, O'PHARROW, ALVAREZ,
DE LOS SANTOS, HOOKS, SAYEGH, JENSEN -- read once and referred to the
Committee on Banks -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- again
reported from said committee with amendments, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the banking law, in relation to enacting the "deed
protection act"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "deed protection act".
3 § 2. The banking law is amended by adding a new section 595-d to read
4 as follows:
5 § 595-d. Foreclosure dependent on fraudulent title prohibited. 1. No
6 mortgage banker or mortgage loan servicer shall commence, maintain, or
7 proceed with a foreclosure action on a mortgage loan where such mortgage
8 banker or mortgage loan servicer knows or has reason to know that the
9 mortgage securing such loan is dependent on a deed, conveyance, or other
10 instrument affecting title to residential real property that was
11 procured by fraud, forgery, or other unlawful means, such that the mort-
12 gagor did not obtain a valid interest in the property.
13 2. Prior to commencing a foreclosure action, a mortgage banker or
14 mortgage loan servicer shall conduct a reasonable review of the mortgage
15 loan and available records to determine whether there is a reasonable
16 basis to believe that such mortgage loan is secured by a valid and
17 enforceable interest in the mortgaged residential real property.
18 3. Nothing in this section shall be construed to limit or impair any
19 right or remedy available at law or in equity relating to fraud,
20 forgery, or other unlawful acts affecting title to residential real
21 property.
22 4. A violation of this section shall constitute a violation of this
23 article.
24 § 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD14344-04-6
