The 2014-15 New York State budget contains Article VII legislation that amends SSL 106 to clearly state that HEAP, child care and SNAP cannot be charged against welfare mortgages. Although this was true before the law was amended, the rules appeared only in regulation and sub-regulatory materials resulting in errors in the calculation of these mortgages. The errors have been particularly egregious since there is no right to a fair hearing to challenge erroneous liens. 18 NYCRR 358-3.1(f)(5). Effective May 30, 2014, the bill requires a signed acknowledgement from all applicants who are asked to sign a welfare mortgage that
- HEAP, child care and food stamps cannot be charged against the mortgage;
- Child support retained by the district, as well as any other payment (lottery winnings, etc.), must be applied to reduce the mortgage;
- That a person can refuse to sign a mortgage and still get a grant for their children.
On June 2, 2014, the Office of Temporary and Disability Assistance promulgated 14 GIS/DC019, which provides all Social Services Districts with this acknowledgement form. The form can be found at https://otda.ny.gov/policy/gis/2014/14DC019.pdf.
The bill will require biennial accountings for welfare mortgages and a prohibition against recovery for that period if no accounting is provided. If the person is no longer on assistance, the penalty will be applied against the last two years that the person was on public assistance. The accounting provision will not be effective until February 1, 2016.
The language, which appears as part of the large budget bill (A.8556-D/S.6356-D) is below.
21 PART S
22 Section 1. Section 106 of the social services law, as amended by chap-
23 ter 200 of the laws of 1946, the section heading as amended, subpara-
24 graph 5 of paragraph (a) of subdivision 2 as renumbered and paragraphs
25 (e) and (f) of subdivision 2 as added by chapter 1080 of the laws of
26 1974, subdivision 1 and paragraph (a) of subdivision 2 as amended by
27 chapter 764 of the laws of 1972, paragraph (b) of subdivision 2 as
28 amended by chapter 150 of the laws of 1955, paragraph (c) of subdivision
29 2 as amended by chapter 310 of the laws of 1962, paragraph (d) of subdi-
30 vision 2 as added by chapter 43 of the laws of 1952, subdivision 3 as
31 amended by chapter 271 of the laws of 1948 and subdivision 4 as added by
32 chapter 340 of the laws of 2003, is amended to read as follows:
33 § 106. Powers of social services official to receive and dispose of a
34 deed, mortgage, or lien. 1. A social services official responsible, by
35 or pursuant to any provision of this chapter, for the administration of
36 assistance or care granted or applied for may accept a deed of real
37 property and/or a mortgage thereon on behalf of the [public welfare]
38 social services district for the assistance and care of a person at
39 public expense but such property shall not be considered as public prop-
40 erty and shall remain on the tax rolls and such deed or mortgage shall
41 be subject to redemption as provided in paragraph (a) of subdivision
42 [two] six hereof.
43 2. A social services official may not assert any claim under any
44 provision of this section to recover payments made as part of Supple-
45 mental Nutrition Assistance Program (SNAP), child care services, Emer-
46 gency Assistance to Adults or the Home Energy Assistance Program (HEAP).
47 3. A social services official may not assert any claim under any
48 provision of this section to recover payments of public assistance if
49 such payments were reimbursed by child support collections.
50 4. A social services official may not assert any claim under any
51 provision of this section to recover payments of public assistance
52 unless, before it has accepted a deed or mortgage from an applicant or
S. 6356–D 48 A. 8556–D
1 recipient, it has first received a signed acknowledgment from the appli-
2 cant or recipient acknowledging that:
3 (a) benefits provided as part of Supplemental Nutrition Assistance
4 Program (SNAP), child care services, Emergency Assistance to Adults or
5 the Home Energy Assistance Program (HEAP) may not be included as part of
6 the recovery to be made under the mortgage or lien; and
7 (b) if the applicant or recipient declines to provide the lien or
8 mortgage the children in the household remain eligible for public
9 assistance.
10 5. (a) Until a deed, mortgage, or lien, accepted prior to or after the
11 effective date of this act, is satisfied or otherwise disposed of, the
12 social services district shall issue and mail to the last known address
13 of the person giving such deed or mortgage, or his or her estate or
14 those entitled thereto, a biennial accounting of the public assistance
15 incurred and repairs and taxes paid on property. The social services
16 district shall provide such accounting no later than February first, two
17 thousand sixteen and biennially thereafter.
18 (b) Such accounting shall include information regarding the debt owed
19 as of the end of the district’s most recent fiscal year including, but
20 not limited to:
21 (1) an enumeration of all public assistance incurred by the person
22 giving such deed or mortgage or his or her household to date;
23 (2) the current amount of recoverable public assistance under the deed
24 or mortgage;
25 (3) the amount of any credits against public assistance including but
26 not limited to:
27 A. the amount of child support collected and retained by the social
28 services district as reimbursement for public assistance;
29 B. recoveries made under section one hundred four of this title;
30 C. recoveries made under section one hundred thirty-one-r of this
31 chapter.
32 (4) Said accounting shall also provide information regarding the
33 manner in which payments may be made to the social services district to
34 reduce the amount of the mortgage or lien.
35 (c) In the event that a biennial accounting is not issued and mailed
36 to the last known address of the person giving such deed or mortgage or
37 his or her estate or those entitled thereto, within the time period
38 required in paragraph (a) of this subdivision, no public assistance
39 shall be recoverable under this section for the previous two fiscal
40 years. In the event that a biennial accounting is not issued and mailed
41 to the last known address of the person giving such deed or mortgage or
42 his or her estate or those entitled thereto, within the time period
43 required in paragraph (a) of this subdivision, and such person has
44 received no recoverable public assistance in the district’s most recent
45 fiscal year, no public assistance shall be recoverable under this
46 section for the most recent two fiscal years where public assistance
47 remains recoverable.
48 6. (a) (1) Until such property or mortgage is sold, assigned or fore-
49 closed pursuant to law by the social services official, the person
50 giving such deed or mortgage, or his estate or those entitled thereto,
51 may redeem the same by the payment of all expenses incurred for the
52 support of the person, and for repairs and taxes paid on such property,
53 provided, however, that a social services official may enter into a
54 contract for such redemption, subject to the provisions of this para-
55 graph, and containing such terms and conditions, including provisions
56 for periodic payments, [with or] without interest, [as the social]
S. 6356–D 49 A. 8556–D
1 [services official shall deem appropriate,] for an amount less than the
2 full expenses incurred for the support of the person and for repairs and
3 taxes paid on such property (hereinafter called a “lesser sum”), which
4 lesser sum shall in no event be less than the difference between the
5 appraised value of such property and the total of the then unpaid prin-
6 cipal balance of any recorded mortgages and the unpaid balance of sums
7 secured by other liens against such property.
8 (2) In the case of a redemption for a lesser sum, the social services
9 official shall obtain (i) an appraisal of the current market value of
10 such property, by an appraiser acceptable to both parties, and (ii) a
11 statement of the principal balance of any recorded mortgages or other
12 liens against such property (excluding the debt secured by the deed,
13 mortgage or lien of the social services official). Any expenses incurred
14 pursuant to this paragraph shall be audited and allowed in the same
15 manner as other official expenses.
16 (3) Every redemption contract for any lesser sum shall be approved by
17 the department upon an application by the social services official
18 containing the appraisal and statement required by subparagraph two, a
19 statement by the social services official of his reasons for entering
20 into the contract for such lesser sum and any other information required
21 by regulations of the department.
22 (4) So long as the terms of the approved redemption contract are
23 performed, no public sale of such property shall be held.
24 (5) The redemption for a lesser sum shall reduce the claim of the
25 social services official against the recipient on the implied contract
26 under section one hundred four of this chapter or under any other law,
27 to the extent of all sums paid in redemption.
28 (b) In order to allow a minimum period for redemption, the [public
29 welfare] social services official shall not sell the property or mort-
30 gage until after the expiration of one year from the date he received
31 the deed or mortgage, but if unoccupied property has not been redeemed
32 within six months from the date of death of the person who conveyed it
33 to him by deed the [public welfare] social services official may there-
34 after, and before the expiration of such year, sell the property.
35 (c) Except as otherwise provided in this chapter, upon the death of
36 the person or his receiving institutional care, if the mortgage has not
37 been redeemed, sold or assigned, the [public welfare] social services
38 official may enforce collection of the mortgage debt in the manner
39 provided for the foreclosure of mortgages by action.
40 (d) Provided the department shall have given its approval in writing,
41 the [public welfare] social services official may, when in his judgment
42 it is advisable and in the public interest, release a part of the prop-
43 erty from the lien of the mortgage to permit, and in consideration of,
44 the sale of such part by the owner and the application of the proceeds
45 to reduce said mortgage or to satisfy and discharge or reduce a prior or
46 superior mortgage.
47 (e) While real property covered by a deed or mortgage is occupied, in
48 whole or in part, by an aged, blind or disabled person who executed such
49 deed or mortgage to the social services official for old age assistance,
50 assistance to the blind or aid to the disabled granted to such person
51 before January first, nineteen hundred seventy-four, the social services
52 official shall not sell the property or assign or enforce the mortgage
53 unless it appears reasonably certain that the sale or other disposition
54 of the property will not materially adversely affect the welfare of such
55 person. After the death of such person no claim for assistance granted
S. 6356–D 50 A. 8556–D
1 him shall be enforced against any real property while it is occupied by
2 the surviving spouse.
3 (f) Except as otherwise provided, upon the death of a person who
4 executed a lien to the social services official in return for old age
5 assistance, assistance to the blind or aid to the disabled granted prior
6 to January first, nineteen hundred seventy-four, or before the death of
7 such person if it appears reasonably certain that the sale or other
8 disposition of the property will not materially adversely affect the
9 welfare of such person, the social services official may enforce such
10 lien in the manner provided by article three of the lien law. After the
11 death of such person the lien may not be enforced against real property
12 while it is occupied by the surviving spouse.
13 [3.] 7. The sale of any parcel of real property or mortgage on real
14 property by the [public welfare] social services official, under the
15 provisions of this section, shall be made at a public sale, held at
16 least two weeks after notice thereof shall have been published in a
17 newspaper having a general circulation in that section of the county in
18 which the real property is located. Such notice shall specify the time
19 and place of such public sale and shall contain a brief description of
20 the premises to be sold, or upon which the mortgage is a lien, as the
21 case may be. Unless in the judgment of the [public welfare] social
22 services official, it shall be in the public interest to reject all
23 bids, such parcel or mortgage shall be sold to the highest responsible
24 bidder.
25 [4. Any inconsistent provision of this chapter or of any other law
26 notwithstanding, a social services official may not assert any claim
27 under any provision of this chapter to recover payments of public
28 assistance if such payments were reimbursed by child support
29 collections.]
30 8. It is permissible for social services officials to subordinate a
31 mortgage taken on behalf of the social services district pursuant to
32 this section. In the event that a social services official determines
33 to subordinate a mortgage, or lien, he or she shall do so within thirty
34 days of receipt of written notice that the mortgagor is attempting to
35 modify their mortgage that is held by a mortgagee with superior lien
36 rights and subordination of the social services district’s mortgage is
37 required by such mortgagee in order for it to approve or complete the
38 modification.
39 § 2. This act shall take effect on the sixtieth day after it shall
40 have become a law.