Establishes the "Abandoned Property Neighborhood Relief Act of 2014"; relates to the duty of the mortgagee or its loan servicing agent to maintain property secured by a delinquent mortgage.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9341A
SPONSOR: Weinstein TITLE OF BILL: An act establishing the "New York state abandoned
property neighborhood relief act of 2014"; and to amend the real proper-
ty actions and proceedings law, in relation to the duty of the mortgagee
or its loan servicing agent to maintain property secured by delinquent
mortgage
PURPOSE: To help community residents and municipalities throughout
the State better address the growing problem of vacant and abandoned
residential properties by creating a statewide registry of such proper-
ties and imposing a duty on mortgagees and their loan servicing agents
to report these properties to the registry and take earlier (pre-fore-
closure) action to identify, secure and maintain them.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 establishes the title of the Act as the "New York State Aban-
doned Property Neighborhood Relief Act of 2014."
Section 2 amends section 1307 of the Real Property Actions and
Proceedings Law to: create a definition of "vacant and abandoned" resi-
dential real property; expand the existing duty of a mortgagee to main-
tain vacant residential real property to include pre-foreclosure "vacant
and abandoned" residential property as defined in the bill, and to
expand such duty to the mortgagee's loan servicing agent; establish a
periodic inspection requirement for mortgagees and loan servicing agents
to determine if residential real property subject to a delinquent mort-
gage is currently occupied; and make it unlawful for a mortgagee or loan
servicing agent, or a person acting on their behalf, to enter residen-
tial real property that is not vacant or abandoned for the purpose of
forcing, intimidating, harassing or coercing a lawful occupant thereof
to vacate the property. in order to render it vacant and abandoned.
Section 3 adds a new section 1307-a to the Real Property Actions and
Proceedings Law to: require the Attorney General to establish and main-
tain a statewide electronic Vacant and Abandoned Property Registry that
shall be accessible to local officials across the State; require mortga-
gees or their agents to promptly submit to the statewide Registry infor-
mation about vacant and abandoned properties, including but not limited
to the current name, address and contact information for the lender or
servicer responsible for maintaining the property, whether a foreclosure
action has been filed, and any updated material information when it
becomes available; authorize a municipality wherein vacant and abandoned
residential property is located to intervene as of right in a foreclo-
sure action involving the property for the purpose of requesting injunc-
tive relief to ensure the property is maintained in accordance with law
and that the foreclosure action is timely prosecuted; require the Attor-
ney General to establish and maintain a toll-free hotline that community
members concerned about vacant and abandoned properties can call to
report such properties and to obtain information relating to such prop-
erties, including but not limited to whether a specific property is
listed on the Attorney General's statewide Vacant and Abandoned Property
Registry and, if so, the identity of the mortgagee or loan servicing
company responsible for maintaining the property; and authorize the
Attorney General, and any affected locality upon written notice to the
Attorney General, to seek injunctive relief and/or civil penalties
against mortgagees and/or their agents for violations of RPAPL sections
1307 and 1307-a.
Section 4 establishes an effective date of 180 days after the act shall
have become a law.
EXISTING LAW:
Section 1307 of the Real Property Actions and Proceedings Law currently
requires a plaintiff in a mortgage foreclosure action who obtains a
Judgment of Foreclosure and Sale involving residential real property
that is or becomes vacant to maintain the property until such time as
ownership of the property has been transferred through the closing of
title in foreclosure or other disposition, and the deed is duly
recorded.
JUSTIFICATION: Vacant and abandoned residential properties securing
delinquent mortgages fall into disrepair and harm neighboring properties
and the surrounding community. These properties are a blight on neigh-
borhoods because they are often boarded up, inhabited by squatters or
used for criminal purposes. When a vacant and abandoned property is not
maintained for an extended period of time, there is a decline in the
community's real estate market and the state's property tax base. There
is also an increased likelihood of crime in and around the property.
There are instances of such properties being used by criminals to manu-
facture and/or distribute illegal drugs. Municipalities are often
forced to expend taxpayer funds to prevent a vacant and abandoned prop-
erty from becoming a public hazard. If a municipality is forced to care
for a significant number of vacant and abandoned properties, its budget
can be depleted quickly.
Current law, enacted in 2009, imposes a duty on plaintiff-mortgagees to
maintain vacant residential properties only after a Judgment of Foreclo-
sure and Sale has been entered. Unfortunately, this law has proven inad-
equate to address the growing number of vacant and abandoned properties
falling into disrepair across New York State. A survey in one jurisdic-
tion showed that most vacant and abandoned properties were not subject
to foreclosure actions and, if they were, the cases had not proceeded to
Judgment of Foreclosure and Sale. In many instances, the plaintiff-mort-
gagee abandoned the foreclosure effort. In others, the plaintiff-mortga-
gee sought to vacate its own Judgment of Foreclosure and Sale, bringing
the property outside of the existing maintenance requirement imposed on
the plaintiff-mortgagee by statute. There is also evidence showing that
current and former New York homeowners have been misled into believing
they need to leave their homes earlier in the foreclosure process than
they actually have to, resulting in even more vacant and abandoned prop-
erties.
In response to this growing threat to communities across New York State,
the Abandoned Property Neighborhood Relief Act of 2014 will ensure that
homeowners are provided with early notice that they are legally entitled
to remain in their homes until ordered to leave by a court and will
require mortgagees and their loan servicers and agents to identify,
secure and maintain vacant and abandoned properties much earlier in the
mortgage delinquency timeline. It will also require that they electron-
ically register these properties with the newly-created Vacant and Aban-
doned Property Registry to be established and maintained by the Attorney
General. The Registry, in turn, will provide a much needed and readily
available source of information on vacant and abandoned residential
properties to local officials throughout the State, and will be supple-
mented by a toll-free hotline that community residents can use to report
suspected vacant and abandoned properties to the Attorney General and
receive information regarding the status of registered properties,
including the identity of the mortgagee or agent responsible for main-
taining them.
PRIOR LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: It is expected that there will be costs to the
Office of the Attorney General for the establishment and maintenance of
the statewide Vacant and Abandoned Property Registry and the toll-free
community resident hotline established by the Act.
EFFECTIVE DATE: 180 days.
