A.1387 (Weinstein)/S.475 (Peralta)
This bill requires mortgage lenders and assignees to submit a form along with any recording of a mortgageor assignment. The form must include the name of the mortgage originator or assignee, their address, phone number, the date the mortgage or assignment was made, and the name of an authorized representative of the mortgagee. The bill exempts individuals (natural persons) who may enter into a mortgage agreement. Failure to provide such form is subject to a $250 penalty to be paid to the recording officer.
Empire Justice Center supports this bill as it will provide transparency regarding mortgage transactions involving residential real property. One of the pitfalls of the securitization of real estate loans process proved to be the buying and selling of mortgage notes without a publicly available paper trail. Loans move through ownership from one company to another, often by only a stroke on a keyboard, but the homeowner has no way of knowing who their mortgagee is. While this is not generally problematic as the mortgagee hires a mortgage servicer to interface with the homeowner, issues arise if the homeowner has a legal claim against the mortgagee, or if the mortgagee sues the homeowner. It is certainly not uncommon for homeowners to have no knowledge of the entity suing them in a foreclosure and until New York State instilled consumer protections to prevent incorrect filings, there were many instances in which homeowners were being sued by the wrong party but had no easy way to prove such.
The lack of identity regarding who owns the mortgage note can be problematic for counties, municipalities and towns, as well. One can ascertain if a mortgage lien is on a property but there is no way of knowing the identity of the current mortgage holder. This form would perhaps be most useful for localities to be able to identify and reach out to the right party regarding properties that are vacant and abandoned by the homeowner, but which the lender has a responsibility to maintain pursuant to New York’s new law, Real Property and Proceedings Law section 1308.
For more information, please contact:
Kirsten E. Keefe
Empire Justice Center
119 Washington Avenue
Albany, NY 12210