STATE OF NEW YORK
________________________________________________________________________
9447
IN ASSEMBLY
January 6, 2026
___________
Introduced by M. of A. CRUZ -- read once and referred to the Committee
on Banks
AN ACT to amend the real property law and the real property actions and
proceedings law, in relation to the discharge of a mortgage; and to
amend a chapter of the laws of 2025 amending the real property law and
the real property actions and proceedings law relating to discharge of
a mortgage, as proposed in legislative bills numbers S. 6363 and A.
2739, in relation to the effectiveness thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (b) of subdivision 2 of section 275 of the real
2 property law, as added by a chapter of the laws of 2025 amending the
3 real property law and the real property actions and proceedings law
4 relating to discharge of a mortgage, as proposed in legislative bills
5 numbers S. 6363 and A. 2739, is amended to read as follows:
6 (b) [Notwithstanding any provision of this section to the contrary, if
7 payment is received at the location and in the manner specified by the
8 mortgagee, the mortgagee must accept and may not return or destroy any
9 payment received in reliance on a payoff statement and must promptly
10 apply such payment to the unpaid principal, interest or any other
11 amounts due under the mortgage.] No mortgagee shall return, destroy, or
12 otherwise refuse to accept a payment made pursuant to the terms of a
13 payoff letter, including but not limited to terms regarding the location
14 and the manner of payment specified by the mortgagee, even if such
15 payment does not cover the full amount of principal, interest, and any
16 other amounts due and owing under the mortgage, provided, however, if
17 there is a defect with the payment that prevents the mortgagee from
18 identifying with reasonable diligence the mortgage for which such
19 payment is made, the mortgagee may refuse to accept such payment and
20 return the payment to the remitter. The mortgagee shall apply such
21 payment to the unpaid principal, interest or any other amounts due
22 under the mortgage, provided that a payment made pursuant to a payoff
23 statement shall not result in the issuance of a certificate of discharge
24 of mortgage pursuant to subdivision one of this section or in the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05468-02-6
A. 9447 2
1 execution of a satisfaction of mortgage pursuant to subdivision one of
2 section nineteen hundred twenty-one of the real property actions and
3 proceedings law unless the payment covers the full amount of principal,
4 interest, and any other amounts due and owing under the mortgage.
5 § 2. Paragraph (b) of subdivision 1 of section 1921 of the real prop-
6 erty actions and proceedings law, as added by a chapter of the laws of
7 2025 amending the real property law and the real property actions and
8 proceedings law relating to discharge of a mortgage, as proposed in
9 legislative bills numbers S. 6363 and A. 2739, is amended to read as
10 follows:
11 (b) [Notwithstanding any provision of this section or section nineteen
12 hundred twenty-one-a of this article to the contrary, if payment is
13 received at the location and in the manner specified by the mortgagee,
14 the mortgagee must accept and may not return or destroy any payment
15 received in reliance on a payoff statement and must promptly apply such
16 payment to the unpaid principal, interest or any other amounts due under
17 the mortgage.] No mortgagee shall return, destroy, or otherwise refuse
18 to accept a payment made pursuant to the terms of a payoff letter,
19 including but not limited to terms regarding the location and the manner
20 of payment specified by the mortgagee, even if such payment does not
21 cover the full amount of principal, interest, and any other amounts due
22 and owing under the mortgage, provided, however, if there is a defect
23 with the payment that prevents the mortgagee from identifying with
24 reasonable diligence the mortgage for which such payment is made, the
25 mortgagee may refuse to accept such payment and return the payment to
26 the remitter. The mortgagee shall apply such payment to the unpaid
27 principal, interest or any other amounts due under the mortgage,
28 provided that a payment made pursuant to a payoff statement shall not
29 result in the execution of a satisfaction of mortgage pursuant to para-
30 graph (a) of this subdivision or in the issuance of a certificate of
31 discharge of mortgage pursuant to subdivision one of section two hundred
32 seventy-five of the real property law unless the payment covers the full
33 amount of principal, interest, and any other amounts due and owing under
34 the mortgage.
35 § 3. Section 3 of a chapter of the laws of 2025 amending the real
36 property law and the real property actions and proceedings law relating
37 to discharge of a mortgage, as proposed in legislative bills numbers S.
38 6363 and A. 2739, is amended to read as follows:
39 § 3. This act shall take effect [immediately] on the one hundred
40 eightieth day after it shall have become a law.
41 § 4. This act shall take effect immediately; provided, however, that
42 sections one and two of this act shall take effect on the same date and
43 in the same manner as a chapter of the laws of 2025 amending the real
44 property law and the real property actions and proceedings law relating
45 to discharge of a mortgage, as proposed in legislative bills numbers S.
46 6363 and A. 2739, takes effect.
