By Michael L. Moskowitz
On June 23, 2016, New York Governor Andrew Cuomo signed into law legislation which amends section 1307 of the New York Real Property Actions and Proceedings Law (RPAPL). The new law becomes effective 90 days from June 23, 2016.
Section 1307 addresses the duty of a mortgagee, or its loan servicing agent, to maintain real property secured by a delinquent mortgage. Lenders will be subject to civil penalties of up to $500 per day for failure to maintain abandoned property once they become aware the property has become vacant. The old law required lenders to take responsibility following a foreclosure judgment which left hundreds of “zombie properties” across the state.
The legislation also imposes a new notice requirement which lenders must provide to the mortgagor when the mortgage on their residential real property is three monthly payments past due. The notice will set forth mortgagor’s right to occupy the property until he or she is ordered to leave by a court of competent jurisdiction.
The law also adds new section 1308 of the RPAPL to establish a streamlined foreclosure process for abandoned properties. (New Jersey already has such a process). Additionally, the new law establishes an electronic statewide registry of abandoned homes, as well as a state hotline where neighbors can report them.
A related measure establishes a State of New York Mortgage Agency fund to buy and sell abandoned properties at below-market rates and demolish those beyond repair.
It is important for lenders to engage experienced New York foreclosure attorneys, like Weltman & Moskowitz, who understand the ever-evolving foreclosure laws of New York and New Jersey. Call Weltman & Moskowitz today, or reach out directly to Richard E. Weltman or Michael Moskowitz to discuss your foreclosure questions and challenges.
About Weltman & Moskowitz, LLP, A New York and New Jersey Business, Bankruptcy, and Creditors’ Rights Law Firm:
Founded in 1987, Weltman & Moskowitz, LLP is a highly regarded business law firm concentrating on creditors’ rights, bankruptcy, foreclosure, and business litigation. Michael L. Moskowitz, a partner with the firm, focusing on business and bankruptcy litigation, as well as corporate counseling, M&A, and transactional matters. Michael can be reached at (212) 684-7800, (201)794-7500 or mlm@weltmosk.com.
