Bill Text: NY S05187 | 2021-2022 | General Assembly | Introduced


Bill Title: Relates to prohibiting robosigned documents in foreclosure actions; allows for an award of damages to the borrower.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2022-01-05 - REFERRED TO HOUSING, CONSTRUCTION AND COMMUNITY DEVELOPMENT [S05187 Detail]

Download: New_York-2021-S05187-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          5187

                               2021-2022 Regular Sessions

                    IN SENATE

                                    February 26, 2021
                                       ___________

        Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Housing, Construction  and
          Community Development

        AN  ACT  to  amend  the  real  property  actions and proceedings law, in
          relation to foreclosure actions and robosigned documents

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. The real property actions and proceedings law is amended by
     2  adding a new section 1393 to read as follows:
     3    §  1393.  Robosigned  documents.  1.  For  the purpose of this section
     4  "robosigned document" shall mean  any  document  that  contains  factual
     5  assertions  that are not accurate, are incomplete, or are unsupported by
     6  competent, reliable evidence. A "robosigned  document"  also  means  any
     7  document  that  has  not been reviewed by its signer to substantiate the
     8  factual assertions contained in the document. For purposes of this defi-
     9  nition, multiple people may verify the document or statement so long  as
    10  the  document or statement specifies the portions verified by each sign-
    11  er.
    12    2. Any entity that records a robosigned document or files a robosigned
    13  document in any court relative to  a  foreclosure  proceeding  shall  be
    14  liable  for a civil penalty of ten thousand dollars per robosigned docu-
    15  ment. The civil penalties under  this  section  are  separate  from  and
    16  exclusive  of  any  other  remedies  or liabilities that may apply. This
    17  section is not intended to limit the type  of  actions  regarding  robo-
    18  signed documents that may be filed by any governmental entity.
    19    3.  A  borrower  may seek an order in any court having jurisdiction to
    20  enjoin any pending  trustee's  sale,  if  a  notice  of  sale  has  been
    21  recorded, and the borrower reasonably believes that the mortgagee, trus-
    22  tee, beneficiary, or authorized agent failed to comply with the require-
    23  ments  of  this  section.  A borrower who obtains an injunction shall be
    24  awarded reasonable attorney's fees and costs.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05187-01-1

        S. 5187                             2

     1    4. Following a trustee's sale, a borrower may recover the  greater  of
     2  actual  damages  or ten thousand dollars plus reasonable attorney's fees
     3  and costs in any  court  of  competent  jurisdiction,  if  the  borrower
     4  reasonably believes that the mortgagee, trustee, beneficiary, or author-
     5  ized agent failed to comply with the requirements of this section.
     6    5.  A  court may award a borrower the greater of treble actual damages
     7  or statutory damages of fifty thousand dollars, plus attorney's fees and
     8  costs, if it finds that the violation of this section  was  intentional,
     9  reckless,  or  resulted from willful misconduct by a mortgagee, trustee,
    10  beneficiary, or authorized agent.
    11    6. A violation of this article shall not affect the validity of a sale
    12  in favor of a bona fide purchaser and any of its encumbrancers for value
    13  without notice.
    14    7. Notwithstanding subdivisions three and  four  of  this  section,  a
    15  borrower may not obtain relief under this section for any violation that
    16  was technical or de minimis in nature that did not impact the borrower's
    17  ability  to  pursue  an  alternative  to foreclosure as provided by this
    18  article.
    19    8. It shall be an affirmative defense to any liability  for  violation
    20  of  this  section  that a signatory to a consent judgment entered in the
    21  case entitled United States of America v. Bank of  America  Corporation,
    22  filed  in  the  Federal  District  Court for the District of Washington,
    23  D.C., case number 1:12-cv-00361 RMC, is in compliance with that  consent
    24  judgment while the consent judgment is in effect.
    25    9.  A  third-party  encumbrancer  shall not be relieved from liability
    26  resulting from a violation of this section committed by that third-party
    27  encumbrancer, that occurred prior to the sale of the subject property to
    28  the bona fide purchaser.
    29    § 2. This act shall take effect immediately.
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