A bill (S1579A) awaiting Gov. Hochul's signature will amend section 1307 of New York Real Property Actions and Proceedings Law ("RPAPL") & require plaintiffs, lenders, assignees, or mortgage loan servicers in a residential mortgage foreclosure action to maintain vacated foreclosed property at the commencement of a foreclosure action. 

Currently, section 1307 of the RPAPL imposes a similar duty on plaintiffs to maintain vacated foreclosed property after obtaining a judgment of foreclosure and sale through the time ownership of the vacated foreclosed property has been transferred to another party. 

It is not uncommon for residents who fall behind on their mortgage to leave or abandon their homes. As a result, lenders will commence a foreclosure action, but may delay in taking control of the vacated or abandoned property, resulting in unmaintained and deteriorating property. 

As we all know, the foreclosure process in New York State can be quite lengthy and, in many instances, it can take years for a plaintiff or lender to obtain a judgment of foreclosure and sale. 

Requiring plaintiffs or lenders to maintain abandoned or vacated foreclosed property at the start of a foreclosure proceeding ensures that the foreclosed property will not deteriorate due to lack of maintenance and upkeep and will ensure that the future owner of the foreclosed property will have a home that is in adequate, or even pristine condition, at the time of closing. 

On the other hand, plaintiffs and lenders will likely argue that this amendment places an undue burden on them since they now have to maintain a vacated property at the start of a foreclosure action, rather than towards the tail end of it. 

This could cause lenders to either: 

1. Move quickly in a foreclosure action rather than take their time, or 
2. Delay or limit foreclosure actions altogether in order to avoid the burden of maintaining a vacant or abandoned residential home at the start of a foreclosure proceeding. 

Regardless, aren't there going to be disputes as to whether a property was abandoned and whether the lender was trespassing? Would you want a lender going into your home, even if they were maintaining it, as obligated? 

Lenders would be wise to seek court orders confirming that property is abandoned and they can enter prior to acting under this bill, if it becomes law. Otherwise, they should expect to be counterclaimed for trespassing as they don't have any legal right to the property until the foreclosure proceeding is concluded. 

Stay tuned to see if Gov. Hochul signs this bill into legislation...

Starting January 2, 2022, borrowers negotiating a loan modification have a right to a single point of contact at their lender.

On November 3, 2021, Governor Hochul signed BillS671 into law, which amends Section 6-o to the banking law, and starting on January 3, 2022, upon written request by the borrower, lenders will be required to provide borrowers with a single point of contact who must provide accurate account and other information related to the foreclosure process and loss mitigation efforts.

This is huge because many mortgage modifications are functionally blocked by a lack of access to lenders rather than based upon qualification criteria. As the foreclosure moratorium is coming to an end on January 15, 2022 and a wave of foreclosures are about to hit New York State, this is a needed law for borrowers, and their attorneys, to settle cases.

• Extend residential and commercial eviction and foreclosure moratoria to January 15, 2022;
• Expand eviction protections for tenants under the COVID-19 Emergency Rental Assistance Program (CERAP);
• Create a due process mechanism for a landlord to challenge a tenant’s Hardship Declaration;
• Direct judges to require residential tenants to apply for CERAP if their hardship claim is determined to be valid;
• Extend the period covered by the Tenant Safe Harbor Act to January 15, 2022; and
• Increase funding for CERAP, Hardship Fund, and legal services for tenants facing evictions.

Eligible tenants are:

1. Tenants or occupants obligated to pay rent in their primary NYS residence;
2. Individuals who have qualified for unemployment or experienced a reduction in household income, incurred significant costs, or experienced other financial hardship due – directly or indirectly – to the COVID-19 outbreak;
3. Tenants who demonstrate a risk of experiencing homelessness or housing instability; AND
4. Tenants who have a household income at or below 80% of the area median income, adjusted for household size.

If a tenant is approved for rental assistance under CERAP, the money goes directly to the landlord. However, landlords who accept CERAP payments, must:

• Not use any prior arrears as a basis for a nonpayment eviction proceeding;
• Waive late fees;
• Not increase monthly rent due 1 year from the date the first CERAP payment is received; and
• Not evict based on an expired lease for a period of 12 months after the first CERAP payment is received, UNLESS the property is in a building with 4 or fewer units, and in which case, the landlord may decline to extend the lease only if the landlord or his immediate family intends to immediately occupy the unit for personal use as a primary residence.

Nonetheless, landlords who accept CERAP may still commence evictions against tenants who:

• Intentionally cause significant damage to the property;
• Persistently and unreasonably engage in behavior that substantially infringes on the use and enjoyment of other tenants or occupants; or
• Causes a substantial safety hazard to others.

What should landlords do now?
Start an eviction proceeding and challenge the hardship, which will either result in CERAP money or permission to continue the eviction process. Alternatively, if a landlord does not have a good faith basis to challenge the hardship or does not want to be restricted by the program’s requirements, then, a landlord should bring a breach of contract lawsuit in NYS Supreme Court against their non-paying tenants, as explained by the federal courts in Elmsford Apartment Associates LLC v. Cuomo.