New York Servicing Reference Guide
- Kacey Olson
| Citation | Topic | Requirement |
| Real Property Actions and Proceedings Law / N.Y. Real Prop. Acts. Law §231(2) | Advertisement of Foreclosure Sale | Once a judgment directing the sale of the mortgaged premises is entered by the court, the lender must advertise the foreclosure sale in a newspaper in the county where the property is located once a week for 4 successive weeks, or at least twice a week for 3 successive weeks preceding the original dated fixed for sale. If the publication is for 3 weeks, the sale must take place on or between the 21st and 28th days after the day of first publication. If the publication is for 4 weeks, the sale must take place on or between the 28th and 35th days after the day of first publication. |
| NY § 419.11(e) | Borrower programs and counseling | The Servicer shall make available to homeowners who are at least 60 days delinquent or who they have reason to believe are experiencing a financial hardship and are in imminent risk of default a list of government approved not‐for‐profit housing counselors in the homeowner’s geographic area as listed on the Department of Financial Services website (www.dfs.ny.gov) or the Division of Housing and Community Renewal’s website (www.nysdhcr.gov). |
| NY § 419.4(c) | Consumer Complaints Notification | A servicer shall clearly and conspicuously disclose with its welcome packet to borrowers, with each periodic billing statement, including as applicable either the monthly mortgage statement or annual coupon book, and with each annual statement pursuant to section 419.7(a) of this Part: (1) an address to which borrowers can direct complaints and inquiries; (2) a toll-free telephone number or collect calling services that gives the borrower access to a live person trained to answer inquiries and resolve or help resolve complaints, provided that the superintendent in his or her discretion may waive or modify this requirement for good cause; and (3) statements: (i) if applicable, that the servicer is registered with the superintendent; (ii) that the borrower may file complaints about the servicer with the New York State Department of Financial Services; and (iii) that the borrower may obtain further information from the New York State Department of Financial Services by calling the department’s consumer assistance unit at 1-800-342-3736 or by visiting the department’s website at www.dfs.ny.gov. |
Crediting of payments | (c) Non-conforming payments. (f) Notice of noncredit. | |
| NY § 419.11 | Delinquencies and Loss Mitigation Efforts | (d) Decisions regarding loss mitigation options. Within 30 days of receiving all required documentation from the borrower and third parties, unless a shorter time is required under regulations or guidelines implementing HAMP, a Servicer shall complete its evaluation of the borrower’s eligibility for a loan modification or other loss mitigation option requested by the borrower and advise the borrower, and if applicable, the borrower’s authorized representative, in writing of its determination. Where the Servicer approves the borrower for a loan modification, including a trial modification, or other loss mitigation option, the written notice must provide the borrower with clear and understandable written information explaining the material terms, costs and risks of the option offered. Where the Servicer determines that the borrower cannot be approved for a loan modification or other requested loss mitigation option, the written notice must state with specificity the reasons for the determination, contact information for a person at the mortgage servicer to reconsider such a denial and any other foreclosure prevention alternatives for which the borrower may be considered. In addition, such denial shall also include the following statement, in boldface type and in print no smaller than the largest print used elsewhere in the main body of the denial: If you believe the loss mitigation request has been wrongly denied, you may file a complaint with the New York State Department of Financial Services at 1-800-342-3736 or www.dfs.ny.gov. (k) Foreclosure. A Servicer must develop and implement policies and procedures to provide notification to its foreclosure attorneys and trustees regarding a borrower’s status for consideration of a loss mitigation option and whether the borrower is being evaluated for, or is currently in, a trial or permanent modification. A Servicer should avoid initiating a foreclosure action if the borrower has requested and is being considered for a loss mitigation option or if the borrower is in a trial or permanent modification and is not more than 30 days in default under the modification agreement. A Servicer must also develop and implement policies and procedures to ensure that its foreclosure attorneys comply with the requirements of New York Civil Practice Law and Rules Section 3408 with regard to mandatory settlement conferences in residential foreclosure actions, including that their attorneys are fully authorized to resolve the foreclosure action and to negotiate with the borrower in good faith to reach a mutually agreeable resolution of the action, including a loan modification, if possible, and that its attorneys bring to the settlement conference relevant documents and information, including the payment history, an itemization of the amounts needed to cure and pay off the loan, the mortgage and note and, if the plaintiff is not the owner of the mortgage and note, the name, address and telephone number of the legal owner of the mortgage and note. |
| N.Y. C.P.L.R. §3408(g) | Discontinuance and Vacatur of Lis Pendens | (g) The plaintiff must file a notice of discontinuance and vacatur of the lis pendens within ninety days after any settlement agreement or loan modification is fully executed. |
| NY § 419.10 | Fees | b. Authorized fees. A Servicer may only collect a fee if the fee is for services actually rendered and one of the following conditions is met: (1) the fee is expressly authorized and clearly and conspicuously disclosed by the loan instruments and not prohibited by law; (2) the fee is expressly permitted by law and not prohibited by the loan instruments; or (3) the fee is not prohibited by law or the loan instruments and is a reasonable fee for a specific service requested by the borrower that is assessed only after clear and conspicuous disclosure of the fee is provided to the borrower and the borrower expressly consents to pay the fee in exchange for the services. c. Attorneys Fees. In addition to the limitations in paragraph (b), attorneys fees charged in connection with a foreclosure action shall not exceed reasonable and customary fees for such work. In the event a foreclosure action is terminated prior to the final judgment and sale for a loss mitigation option, a reinstatement or payment in full, the borrower shall only be liable for reasonable and customary fees for work actually performed. d. Late fees and Delinquency Charges. A Servicer shall not impose any late fee or delinquency charge when the only delinquency is attributable to late fees or delinquency charges assessed on an earlier payment, and the payment is otherwise a full payment for the applicable period and is paid on its due date or within any applicable grace period. Late charges shall be in accordance with Real Property Law section 254-b. Late charges shall not be (1) based on an amount greater than the past due amount; (2) collected from the escrow account or from escrow surplus without the approval of the borrower; or (3) deducted from any regular payment. Except as provided in Real Property Law section 254-b(2), late charges shall not be imposed more than once with respect to a single delinquent installment and shall not exceed 2% of the amount of the delinquent installment. |
| Action to Foreclose a Mortgage / N.Y. Real Prop. Acts. Law §1303(1) | Help for Homeowners in Foreclosure | If a mortgage foreclosure action involves 1-4- family owner occupied residential real property, then the Help for Homeowners in Foreclosure notice must be delivered with the summons and complaint served on any mortgagor. It must be on its own page and must be printed on colored paper that is other than the color of the summons and complaint. The title of the notice must be in bold, 20-point type and the body of the notice must be in bold, 14-point type. |
| NY § 419.4(d) | Information Request Response Timing | (d) Within 10 days of receiving a request in writing from a borrower or the borrower’s authorized representative, a servicer shall provide the borrower with the name, address, phone number or email address, if available, and other relevant contact information for the owner or assignee of the mortgage loan. |
| Action to Foreclose a Mortgage / N.Y. Real Prop. Acts. Law §1306 | Information to be filed with the Superintendent | A mortgage lender, assignee and servicer must file the following information with the Superintendent of Banks of the New York State Department of Financial Services (Superintendent) within 3 business days of the mailing of the Notice to Borrowers in Default: (1) the name, address and last known telephone number of the borrower; (2) the amount claimed as due and owing on the mortgage, and (3) other information as will enable the Superintendent to ascertain the type of loan at issue. |
| NY § 419.8 | Late payment notices | Except where inconsistent with the automatic stay provisions of the Bankruptcy Code with respect to a borrower in a pending bankruptcy proceeding, a Servicer shall send a payment reminder notice to a borrower at the borrower’s last known address no later than 17 days after the payment becomes due and remains unpaid, provided that a Servicer is not required to send a separate payment reminder notice for each consecutive month in which the mortgage loan continues to remain unpaid. |
| Action to Foreclose a Mortgage / N.Y. Real Prop. Acts. Law §1304 | Notice of Default and List of Approved Housing Counseling Agencies | At least 90 days prior to commencing legal action against a borrower, including foreclosure, the mortgage lender, assignee or servicer must provide a notice of default. The notice must contain a list of at least 5 housing counseling agencies (as designated by the Department of Financial Services) that serve the region where the borrower resides. |
General Regulations of the Banking Board / N.Y. Comp. Codes R. & Regs. tit. 3, §80.5(a) N.Y. Comp. Codes R. & Regs. tit. 3, §82.5 | Notice of Loan Maturity | A lender must provide the borrower with notice in writing of a balloon payment at least 90 but not more than 120 days prior to the expected maturity of a balloon-payment mortgage loan. This notice must be provided in writing, or where the borrower has consented in advance, via electronic media. |
| NY § 419.4(f) | Notice of Noncredit of Payment | If the Servicer receives any payment on a mortgage loan and does not credit it or treat it as credited by the due date or within 30 days from the date of receipt, whichever is earlier, the Servicer shall, within 10 business days of receipt, send the borrower notice by mail at the borrower’s last known address indicating the reason the payment was not credited or treated as credited to the account, and any actions by the borrower necessary to make the loan current. |
General Regulations of the Banking Board / N.Y. Comp. Codes R. & Regs. tit. 3, §80.5(a) N.Y. Comp. Codes R. & Regs. tit. 3, §82.5 | Notice of Payment Adjustment | A lender must provide the borrower with notice, in writing or via electronic media if consented in advance, of a payment adjustment at least 30 days but not more than 120 days before the payment adjustment. See citation as to when notice is not required. |
| Action to Foreclose a Mortgage / N.Y. Real Prop. Acts. Law §1331 | Notice of Pendency | A notice of pendency must be filed at least 20 days before final judgment directing a sale is rendered. |
| Action to Foreclose a Mortgage / N.Y. Real Prop. Acts. Law §1305 | Notice to Tenant Following Foreclosure Sale | A successor in interest of residential real property must provide written notice to all tenants: (1) that the tenant is entitled to remain in occupancy of the property for the remainder of the lease term, or a period of 90 days from the date of mailing the notice, whichever is greater, on the same terms and conditions as were in effect at the time of entry of the judgment of foreclosure and sale, or if no judgment was entered, upon the terms and conditions as were in effect at the time of transfer of ownership of the property; and (2) of the name and address of the new owner. |
| Action to Foreclose a Mortgage / N.Y. Real Prop. Acts. Law §1303(5) | Notice to Tenants of Buildings in Foreclosure | Notice must be on its own page and must be printed on colored paper that is other than the color of the summons and complaint. The title of the notice must be in bold, 20-point type and the body of the notice must be in bold, 14-point type. The notice must be delivered within 10 days of the service of the summons and complaint. With respect to buildings with fewer than 5 dwelling units, the notice must be delivered to the tenant by certified mail, return receipt requested, and by first-class mail: (1) to the tenant's address at the property, if the identity of the tenant is known; and (2) delivered to “occupant,” if the identity of the tenant is not known. For buildings with 5 or more dwelling units, a legible copy of the notice must be posted on the outside of each entrance and exit of the building. |
| NY § 419.7(b) | Payment Histories | Within 30 days of receipt of a request from the borrower or the borrower’s authorized representative, a Servicer shall deliver to the borrower a payment history for the last 36 months (unless a different period is requested) of the borrower's account showing the date and amount of all payments made or credited to the account and the total unpaid balance. The Servicer shall have 60 days to deliver a payment history where the request is for a period longer than the last 36 months. |
| NY § 419.9 | Payoff Statement | A Servicer shall provide a clear, understandable and accurate statement of the total amount that is required to pay off the mortgage loan as of a specified date, within a reasonable time, but in any event no more than 5 business days after receipt of a request from the borrower or borrower’s authorized representative. No borrower shall be charged a fee for being informed or receiving a payoff statement or for being provided with a release upon full prepayment, provided that a Servicer may charge a reasonable fee for providing a payoff statement after five or more requests in any calendar year. |
| N.Y. Real Prop. Acts. Law §1353(1) | Post-Sale Market Sale | 1. After the property has been sold, the officer conducting the sale shall execute a deed to the purchaser. The plaintiff, or any other party, may become a purchaser. If the plaintiff (or its affiliate, as defined in paragraph (a) of subdivision one of section six-l of the banking law ) is the purchaser, such party shall place the property back on the market for sale or other occupancy: (a) within one hundred eighty days of the execution of the deed of sale, or (b) within ninety days of completion of construction, renovation, or rehabilitation of the property, provided that such construction, renovation, or rehabilitation proceeded diligently to completion, whichever comes first, provided however, a court of competent jurisdiction may grant an extension for good cause. |
| N.Y. C.P.L.R. §3408(h) | Prohibited Fees During Mediation | (h) A party to a foreclosure action may not charge, impose, or otherwise require payment from the other party for any cost, including but not limited to attorneys' fees, for appearance at or participation in the settlement conference. |
| N.Y. Real Prop. Acts. Law §1304(3); N.Y. Real Prop. Acts. Law §1304(4) | Reverse Mortgage Pre-Foreclosure Notice | New provisions enacted in NY Assembly Bill 9508 With regard to a reverse mortgage home loan, at least ninety days before commencement of legal action, including foreclosure, against the borrower or borrowers at the property address and any other addresses on record, a notice must be given to the borrower in at least 14 point type, except for the heading which shall be in at least 16 point type, which shall be titled as follows "YOU COULD LOSE YOUR HOME TO FORECLOSURE. PLEASE READ THE FOLLOWING CAREFULLY." The notice must include all required data as is stated in the rule and must be sent by to the borrower, by registered or certified mail and also by first-class mail to the last known address of the borrower, and to the residence that is the subject of the mortgage. |
| NY § 419.14 | Servicing Prohibitions | a. Engaging in unfair or deceptive business practices or misrepresenting or omitting any material information in connection with the servicing of the loan, including, but not limited to, misrepresenting the amount, nature or terms of any fee or payment due or claimed to be due on a loan, the terms and conditions of the servicing agreement or the borrower’s obligations under the loan g. Refusing to communicate with an authorized representative of the borrower who provides a written authorization signed by the borrower, provided that the servicer may adopt procedures reasonably related to verifying that the representative is in fact authorized to act on behalf of the borrower |
| NY § 419.7(b) | Statement of Account | Payment Histories. A Servicer shall promptly provide a borrower with an accurate accounting in plain English of the debt owed when requested by the borrower or borrower’s authorized representative. Within 30 days of receipt of a request from the borrower or the borrower’s authorized representative, a Servicer shall deliver to the borrower a payment history for the last 36 months (unless a different period is requested) of the borrower's account showing the date and amount of all payments made or credited to the account and the total unpaid balance. The Servicer shall have 60 days to deliver a payment history where the request is for a period longer than the last 36 months. |
N.Y. Real Prop. Acts. §1302(1) N.Y. Real Prop. Acts. Law §1306(2) N.Y. Real Prop. Acts. Law §1311 | Summons and Complaint | 1. Any complaint served in a proceeding initiated pursuant to this article relating to a high-cost home loan or a subprime home loan, as such terms are defined in section six-l and six-m of the banking law , respectively, must contain an affirmative allegation that at the time the proceeding is commenced, the plaintiff: (a) is the owner and holder of the subject mortgage and note, or has been delegated the authority to institute a mortgage foreclosure action by the owner and holder of the subject mortgage and note; and (b) has complied with all of the provisions of section five hundred ninety-five-a of the banking law and any rules and regulations promulgated thereunder,section six-l or six-m of the banking law, and section thirteen hundred four of this article. 2. Each filing delivered to the superintendent shall be on such form as the superintendent shall prescribe, and shall include at a minimum, the name, address, last known telephone number of the borrower, and the amount claimed as due and owing on the mortgage, and such other information as will enable the superintendent to ascertain the type of loan at issue. The superintendent may subsequently request such readily available information as may be reasonably necessary to facilitate a review of whether the borrower might benefit from counseling or other foreclosure prevention services. Each of the following persons, whose interest is claimed to be subject and subordinate to the plaintiff's lien, shall be made a party defendant to the action: 1. Every person having an estate or interest in possession, or otherwise, in the property as tenant in fee, for life, by the curtesy, or for years, and every person entitled to the reversion, remainder, or inheritance of the real property, or of any interest therein or undivided share thereof, after the determination of a particular estate therein. 2. Every person having a right of dower or an inchoate right of dower in the real property or any part or share thereof. 3. Every person having any lien or incumbrance upon the real property which is claimed to be subject and subordinate to the lien of the plaintiff. 4. Where the mortgage is upon any of the public utilities regulated by the public service law, the public service commission. In an action to foreclose a mortgage on a residential property containing not more than three units, in addition to the usual requirements applicable to a summons in the court, the summons shall contain a notice in boldface in the following form: NOTICE YOU ARE IN DANGER OF LOSING YOUR HOME If you do not respond to this summons and complaint by serving a copy of the answer on the attorney for the mortgage company who filed this foreclosure proceeding against you and filing the answer with the court, a default judgment may be entered and you can lose your home. Speak to an attorney or go to the court where your case is pending for further information on how to answer the summons and protect your property. Sending a payment to your mortgage company will not stop this foreclosure action. YOU MUST RESPOND BY SERVING A COPY OF THE ANSWER ON THE ATTORNEY FOR THE PLAINTIFF (MORTGAGE COMPANY) AND FILING THE ANSWER WITH THE COURT. |
Transfer of Servicing | A mortgage investing institution must provide written notice to a borrower no later than 10 business days after the transfer to another mortgage investing institution of the right to receive all payments from the borrower, including payments made into an escrow account. The notice must include the name, address and telephone number of the mortgage investing institution to which the rights have been transferred. Upon request by the borrower, the mortgage investing institution must advise the borrower of the amount of money in an escrow account as of the date of the transfer. |