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New York’s Vacant and Abandoned Property Law and Regulations (Effective 12/20/2016)

Posted By USFN, Tuesday, November 29, 2016
Updated: Monday, October 31, 2016

November 29, 2016

by Robert H. King
Rosicki, Rosicki, & Associates, P.C. – USFN Member (New York)

New York’s vacant and abandoned property law goes into effect on December 20, 2016. The law affects various aspects of New York’s foreclosure law. Servicers should be aware of each of the provisions of the new law; the provisions include:

Vacant and Abandoned Properties
• Real Property Actions and Proceedings Law (RPAPL) § 1308 requires servicers to maintain vacant and abandoned properties at the 90th day delinquency.

• RPAPL § 1309 creates an expedited process for obtaining judgments for uncontested actions involving vacant and abandoned properties.

• RPAPL § 1310 requires servicers to register vacant and abandoned properties with the New York Department of Financial Services.

The New York State Department of Financial Services (DFS) released their proposed rules for comment, seeking to compel servicers to report such information as the date of inspections, when notices were posted, and the actions taken to maintain the property. The DFS will require quarterly reporting of vacant and abandoned properties.

RPAPL § 1304 – New York’s Pre-Foreclosure 90-Day Notice
In order to continue to comply with the 90-day pre-foreclosure notices and to prevent delays in commencement of New York foreclosure actions, it is important for servicers to review the amendments to the 90-day pre-foreclosure notice required by RPAPL § 1304. The language of the 90-day pre-foreclosure notice was amended to include:

• A disclaimer to borrowers that they have the right to remain in the property until a court orders the borrowers to leave the premises; the 90-day notice also informs of the borrower’s ongoing ownership of the property and of responsibilities as owner.

• The New York State Attorney General Homeowner Protection Program toll-free consumer hotline.

The statute makes clear that the 90-day notice is required to be sent for all residential loans regardless of whether the borrower occupies the property or files for bankruptcy.

The new statute clarifies that a new 90-day notice must be sent if the borrower cures the delinquency but then re-defaults.

90-Day Notice and Limited English Proficiency
In order to comply with the new amended provisions in RPAPL § 1304, servicers should consider this question: Does the person preparing the 90-day notice have access to communication logs to determine if the borrower is non-native English proficient?

If the servicer knows that the borrower has limited English proficiency, then the RPAPL §1304 notice must be drafted in the native non-English language, provided that the language is one of the six most common non-English languages spoken by individuals with limited English proficiency in the state of New York. The New York State Department of Financial Services will provide a list of these six most common non-English languages based on the United States Census data. Further, the DFS will post the 90-day notice in the six most common non-English languages on its website (www.dfs.ny.gov).

Housing Counseling Agencies
The list of housing counseling agencies attached to the 90-day notice must include at least five current housing counseling agencies serving the county where the property is located.

RPAPL § 1303 – Help for Homeowners in Foreclose Notice
The content of the notice was amended to include a “rights and obligations” provision to borrowers that they have the right to remain in the property until a court orders the borrowers to leave the property. This notice is delivered to all parties in the foreclosure action at service of the summons and complaint.

CPLR 3408 – Settlement Conferences and Mediations
The amendments define good faith in negotiations, require detailed loan modification denial letters, and require the court to provide borrowers with a Consumer Bill of Rights. (DFS has been tasked with publishing a Consumer Bill of Rights.) The amendments also allow borrowers to interpose an answer/contested pleading 30 days after the first settlement conference date.

Conclusion
Servicers should be aware of the changes made to New York foreclosure law, and ensure that they have processes in place to comply.

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November/December e-Update

Note for consideration of the USFN Award of Excellence: This article is not a "Feature."

 

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