2019 Consumer Finance & Housing NYS Legislative Wrap-up

Kirsten Keefe December 23, 2019


Updated December 23, 2019


Reverse Mortgage and Loans bills

  • Reverse Mortgage Lending Protections (A.5626/S.4407) – Provides protections for consumers and prohibitions for lenders when making reverse mortgage loans such as requiring enhanced disclosures, prohibiting unfair marketing practices, and requiring additional notice when a borrower defaults. Signed into law December 6, 2019.
  • DFS Reverse Mortgage Comparison Website (A.5625A/S.3221) – Authorizes DFS to establish and operate a home equity conversion mortgage comparison website. It is not required for lenders to submit information to be included, but they may provide factors related to pricing and future rate adjustments that may impact borrowers. Vetoed by the Governor on December 6, 2019.  
  • Reverse Loans for Coops (A.2632-B/S.3686-B) – Authorizes lenders to make reverse loans on coops in New York State and includes consumer protections in the loan origination, as well as the default that are afforded to borrowers of reverse mortgage loans. Vetoed by the Governor on December 13, 2019.


Mortgage Servicing and Foreclosure Prevention

  • 90 Day Pre-Foreclosure Filing Notices and Mandatory Settlement Conferences made Permanent (Budget bill, A.2005-c/S.1505-c, Part W) – Sunset date of February 2020 was removed from the laws making both provisions permanent in New York State law. Signed into law April 12, 2019.
  • Standing to Sue Defense in Foreclosure Actions (A.5619/S.5160) – standing to sue shall not be waived as a defense if the borrower failed to raise it in the answer or a pre-answer motion to dismiss. Governor action due by December 28, 2019.
  • Borrower Rights When Mortgage Loan Servicing is Transferred (A.0092-A/S.5017-A) – preserves homeowner’s rights when servicing of a mortgage loan is sold; if a loan modification application is in process, the servicer must inform borrower of all documents related to the application that were given to the new servicer and if a modification has been finalized, the bill requires the new servicer to honor the modification. Signed into law August 14, 2019.
  • Deed Theft and Rescue Scam Laws Amendments (A.5615/S.1688) – Updates and strengthens the Home Equity Theft Prevention Act and New York’s Distressed Property Consultants law addressing deed theft and foreclosure rescue scams by clarifying coverage of lawyers providing assistance, expanding list of prohibited practices, and allowing district attorneys to more easily bring actions on behalf of harmed homeowners to transfer title back to homeowner’s name. Signed into law August 14, 2019.
  • Notice of Conveyance of Real Property (A.0440-A/S.5372) – Requires the county or city clerk to send a prescribed notice to homeowners when property to their home has been transferred into another name. Signed into law December 12, 2019.


Vacant and Abandoned Properties and Neighborhood Preservation

  • Expedited tax foreclosure process for Vacant and Abandoned Properties (A.4403/S.1864) – allows counties to bring a tax foreclosure action on verified vacant and abandoned properties within one year, rather than two years of default. Signed into law December 20, 2019.
  • Zombie Property Remediation Act of 2019 (A.1859-A/S.5079-A) – Provides for a city, village or town to commence an action in court to compel a mortgagee of a property that has been certified vacant and abandoned to bring a foreclosure action if the note is in default, move a foreclosure action forward if already filed, or issue a certificate of discharge of the mortgage. Signed into law December 18, 2019.
  • Property Maintenance Act (A.1800/S.4182) – Adds requirement to the law which mandates mortgagees maintain vacant and abandoned properties the requirement to pay homeowner association or coop fees as needed to maintain the property. Signed into law August 14, 2019.
  • Uniform Partition of Heirs Property Act (A.7058/S.4865) – Sets standards and a right for a settlement conference is actions to partition heir property. Signed into law December 6, 2019.
  • Transparency of Ownership of Homes Owned by LLCs (A.7190/S.1730) – When a 1-4 family home is transferred into the name of a limited liability company (LLC), the LLC must identify the names and business address of all members, managers, and other persons responsible for the property in its tax filings. Signed into law September 13, 2019.


Community Banking

  • Banking Development Districts (A.3320/S.0727-A) – Enhances role of Banking Development Districts and provides for credit unions to be included under the designation. Signed into law December 12, 2019.
  • Community Reinvestment Enhancements (A.1772A/S.3227) – Enhances New York State’s version of the community reinvestment act by requiring DFS to put in writing it’s assessment of a bank’s performance in meeting the needs of communities when the bank makes an application to DFS that impacts its activities in some way. Signed into law December 6, 2019.


Contract Law

  • Victims of Domestic Violence may opt out of Contracts (A.5318/S.2356)- Allows victims of domestic violence to opt-out of contracts with telephone, cable and direct satellite companies. Signed into law August 28, 2019.


Student Lending and Higher Education

  • Student Loan Servicing Rules (Budget bill, A.2008-c/S.1508-c, Part L) – Establishes student loan servicing standards and authorizes DFS to promulgate regulations, supervise and examine student loan servicers. Signed into law April 12, 2019.