Bill > A03348

This bill amends the New York banking law to provide stronger protections for mortgage borrowers by allowing them to take legal action against mortgage lenders and servicers who violate certain rules and regulations. Specifically, if a borrower is injured by a violation of rules set by the state superintendent (including specific mortgage servicing rules), they can now bring a lawsuit in their own name, assert a counterclaim, or file a third-party claim against the mortgagee or mortgage servicer. The bill allows borrowers to recover statutory damages of $1,000 per violation, potentially treble (triple) actual damages, and reasonable attorneys' fees. Additionally, the bill establishes that material compliance with these rules is now a condition for initiating a foreclosure action, meaning that failure to follow the regulations can be used as a defense against foreclosure, even if the mortgage servicing has been transferred to a different servicer. The mortgagee and mortgage servicer are also declared jointly and severally liable for any damages awarded to an injured borrower, which means a borrower can pursue either or both parties for compensation.

Business and Industry

https://www.nysenate.gov/legislation/bills/2025/A3348