Enacts the "access to justice in lending act"; relates to a mortgagor's right to recover attorney's fees in actions or proceedings arising out of foreclosures of residential property which consists of a one- to four-family residence, condominium that is occupied by the mortgagor or cooperative unit that is occupied by the mortgagor; provides reciprocal attorney's fees.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1239B
SPONSOR: Lancman (MS) TITLE OF BILL: An act to amend the real property law, in relation to
enacting the "access to justice in lending act"
PURPOSE OR GENERAL IDEA OF THE BILL: The purpose of this bill is to
allow borrowers in a foreclosure proceeding access to legal represen-
tation by providing that mortgage agreements which allow a prevailing
lender to recover attorneys fees in a foreclosure proceeding shall be
read to allow prevailing borrowers to recover attorneys fees as well,
thereby enabling borrowers with meritorious defenses to foreclosure to
obtain the legal representation necessary to assert those defenses,
similar to the reciprocal attorneys fees rights given tenants by Real
Property Law Section 234.
SUMMARY OF SPECIFIC PROVISIONS: Section 1: Adds Real Property Law
section 282 to provide that mortgage agreements which allow a prevailing
lender to recover attorneys fees in a foreclosure proceeding shall be
read to allow prevailing borrowers to recover attorneys fees as well.
LEGISLATIVE HISTORY: New Bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: 60 days after it shall have become law, These new
provisions shall apply to all real property mortgages that are in exist-
ence on or after such date, and apply to all actions and proceedings
commenced on or after such date.
STATE OF NEW YORK
________________________________________________________________________
1239--B
Cal. No. 111
2009-2010 Regular Sessions
IN ASSEMBLY(Prefiled)
January 7, 2009
___________
Introduced by M. of A. LANCMAN, ALFANO, JAFFEE, PERRY, MILLMAN --
Multi-Sponsored by -- M. of A. PHEFFER, WEINSTEIN -- read once and
referred to the Committee on Banks -- reported and referred to the
Committee on Codes -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- passed by
Assembly and delivered to the Senate, recalled from the Senate, vote
reconsidered, bill amended, ordered reprinted, retaining its place on
the order of third reading
AN ACT to amend the real property law, in relation to enacting the
"access to justice in lending act"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "access to
2 justice in lending act".
3 § 2. The real property law is amended by adding a new section 282 to
4 read as follows:
5 § 282. Mortgagor's right to recover attorneys' fees in actions or
6 proceedings arising out of foreclosures of residential property. 1.
7 Whenever a covenant contained in a mortgage on residential real property
8 shall provide that in any action or proceeding to foreclose the mortgage
9 that the mortgagee may recover attorneys' fees and/or expenses incurred
10 as the result of the failure of the mortgagor to perform any covenant or
11 agreement contained in such mortgage, or that amounts paid by the mort-
12 gagee therefor shall be paid by the mortgagor as additional payment,
13 there shall be implied in such mortgage a covenant by the mortgagee to
14 pay to the mortgagor the reasonable attorneys' fees and/or expenses
15 incurred by the mortgagor as the result of the failure of the mortgagee
16 to perform any covenant or agreement on its part to be performed under
17 the mortgage or in the successful defense of any action or proceeding
18 commenced by the mortgagee against the mortgagor arising out of the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01064-11-0
A. 1239--B 2
1 contract, and an agreement that such fees and expenses may be recovered
2 as provided by law in an action commenced against the mortgagee or by
3 way of counterclaim in any action or proceeding commenced by the mortga-
4 gee against the mortgagor. Any waiver of this section shall be void as
5 against public policy.
6 2. For the purposes of this section, "residential real property"
7 means real property improved by a one- to four-family residence, a
8 condominium that is occupied by the mortgagor or a cooperative unit that
9 is occupied by the mortgagor.
10 § 3. This act shall take effect on the sixtieth day after it shall
11 have become a law, shall apply to residential real property mortgages in
12 existence on or after such date and shall apply to actions and
13 proceedings commenced on or after such date.
