Bill > S00070

This bill amends the New York banking law to provide significant protections for mortgage borrowers by establishing new legal remedies against mortgage lenders and servicers who violate specific rules and regulations. Specifically, the bill allows any person who has been injured by a violation of mortgage servicing rules to bring a legal action in their own name, assert a counterclaim, or bring a third-party claim against the mortgagee or mortgage servicer to stop the violations. The bill provides substantial financial incentives for enforcement, allowing injured borrowers to recover statutory damages of $1,000 per violation, potentially treble actual damages, and reasonable attorney's fees. Moreover, the bill establishes that material compliance with mortgage servicing rules is a condition for initiating foreclosure proceedings, meaning that failure to follow these rules can be used as a defense against foreclosure, even if the servicing has been transferred to a different servicer. The mortgagee and mortgage servicer are also declared jointly and severally liable for any recoveries by an injured borrower, which means a borrower can potentially recover the full damages from either party.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/S70