NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7386
SPONSOR: Lavine TITLE OF BILL:
An act to amend the real property law and the banking law, in relation
to preventing fraudulent deed transfers
PURPOSE OR GENERAL IDEA OF BILL:
This bill would prevent unscrupulous investors from taking advantage of
distressed homeowners by having them signed a deed, in most cases
unknowingly, to transfer ownership of property under the guise that by
doing so, they would receive assistance in saving their property from
foreclosure.
SUMMARY OF PROVISIONS:
This legislation seeks to prevent distressed homeowners from being
tricked into signing a deed transferring ownership of their property to
a third parties because they are seeking assistance to save their home
from foreclosure. in two ways. First, by requiring all deeds to include
mandatory language in bold letters that clearly informs the title owner
by signing the deed they are transferring ownership of said property,
which must be signed and notarized. Second, prohibits any deed transfer
to be done in order to apply for a modification. Authorizes the divi-
sion of financial services to investigate all fraudulent deed transfers.
It also makes it a crime to executive a deed transfers without providing
the required warning to owner of property.
JUSTIFICATION:
Distressed homeowners who are desperate to save their home from foreclo-
sure are often victims of fraudulent deed transfer by unscrupulous
investors through deceptive practices resulting in the permanent loss of
their home and property. Victims of fraudulent deed transfer often time
may not be aware that by signing a deed they are transferring ownership
to a third party. This legislation aims to protect distressed homeowners
by informing them of the consequences of signing such deed and author-
izes DFS to investigate such complaint, which currently does not exist.
PRIOR LEGISLATIVE HISTORY:
2021-22 REFERRED TO SENATE JUDICIARY 2021-22 referred to assembly judi-
ciary
2020 REFERRED TO SENATE JUDICIARY
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
There is no fiscal impact to the State, but may generate revenue for the
state in the form of fines.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7386
2023-2024 Regular Sessions
IN ASSEMBLY
May 19, 2023
___________
Introduced by M. of A. LAVINE -- read once and referred to the Committee
on Judiciary
AN ACT to amend the real property law and the banking law, in relation
to preventing fraudulent deed transfers
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 333 of the real property law is amended by adding a
2 new subdivision 4 to read as follows:
3 4. A recording officer shall not record or accept for record any
4 conveyance of real property affecting land in New York state unless such
5 conveyance contains, or is accompanied by an addendum containing,
6 explicit and bold language that reads, "YOU ARE HEREBY MADE AWARE THAT
7 BY SIGNING THIS DEED YOU ARE TRANSFERRING OWNERSHIP OF YOUR LAND OR
8 HOME", with a signature line under such language which shall contain a
9 notarized signature of the transferor. Failure of a person or corpo-
10 ration to use a deed without such warning language or if the transferor
11 does not sign the acknowledgement to complete such deed transfer pursu-
12 ant to this section shall be a class E felony.
13 § 2. Section 6-n of the banking law is amended by adding a new subdi-
14 vision 3 to read as follows:
15 3. No deed transfer from a borrower to a mortgage servicer that is
16 transferred as part of a modification of mortgage terms shall be consid-
17 ered a valid deed transfer. The department shall have the authority to
18 investigate any deed transfer that is in violation of this subdivision.
19 § 3. Subdivision 1 of section 14 of the banking law is amended by
20 adding a new paragraph (t) to read as follows:
21 (t) To prescribe the methods and standards under which the department
22 shall receive and investigate claims of fraudulent deed transfers,
23 including, but not limited to deed transfers that are in violation of
24 subdivision three of section six-n of this chapter.
25 § 4. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03255-01-3
