Legal Media Analysts

Tuesday, November 22, 2022

New Mortgage Default Law as New York Home Prices Tumble

On November 22, 2022, Governor Hochul signed A3081 into law, which immediately prohibits the registration of mortgages in default prior to the filing of a notice of pendency. This is on the same day that the homepage of Newsday reads "Long Island homebuyers see highest rate of price cuts since 2019." It seems like foreclosures are on everyone's mind this Thanksgiving season. 

The new law can be found at Real Property Actions and Proceedings Law section 1393 and it basically cuts against the trend of local towns and villages enacting laws that require lenders to maintain foreclosed property - for example, here is the one in Smithtown New York. Specifically, it restricts these laws, which are problematic because they often required action on defaulted mortgages that were not yet in suit. Now, this new law requires a notice of pendency to have first been filed in a court before these laws can be effective. Smart.

Regardless, this is the beginning of the new focus on foreclosure trend that will be coming to all of us soon when we all start paying our heating bills.

Happy Thanksgiving.