Thursday, September 29, 2016

New York Foreclosure Alert - 9-29-2016

New York recently adopted sweeping legislation to reform the foreclosure process. New York's Governor, Andrew M. Cuomo, signed legislation into law that:

1. Enhances the effectiveness of settlement conferences for homeowners by prescribing the rights and duties of the parties and clarifying how the process should work to best protect homeowners contesting foreclosures and prevent them from losing their homes.

2. Establishes a Consumer Bill of Rights informing property owners of their rights in foreclosure proceeds to prevent people from losing their homes.

3. Creates the Community Restoration Fund (CRF), a new tool for the State of New York Mortgage Agency (SONYMA) to assist homeowners facing mortgage foreclosure. CRF will purchase defaulted mortgage notes from other lenders and offer favorable mortgage modifications to keep homeowners in their residences. CRF will have the ability to forgive a portion of a loan’s principal and make the loan affordable in areas where home values have declined or where a homeowner has experienced a decrease in income.

4. Imposes a pre-foreclosure duty on the banks and servicers to maintain vacant and abandoned properties. The bank has a duty to maintain and secure a residential real property where there is a reasonable basis to believe it is vacant and abandoned, and faces civil penalties up to $500 per violation, per property, per day for failing to do so.

5. Expedites foreclosures for vacant and abandoned properties.

6. Requires a lender to auction a property within 90 days of obtaining a foreclosure judgment. In addition, a foreclosing party would be required to take action to ensure that the property is reoccupied within 180 days of taking title.

7. Establishes an electronic registry of vacant and abandoned properties.

8. Provides a mechanism to “expeditiously complete a foreclosure” and work with land banks, Community Development Financial Institutions, and other local nonprofits to rehabilitate properties and resell them to new buyers.

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