Provisions meant to strengthen protections against abuse in the foreclosure process are set to take effect after Gov. Kathy Hochul's approval of a law addressing a top court ruling lawmakers have argued weakened safeguards for consumers.
The measure, initially approved by state lawmakers last year, was backed after a state Court of Appeals ruling that made it easier for lenders and mortgage servicers to halt the statute of limitations period during the foreclosure process.
The new law bars any party in a mortgage foreclosure process from unilaterally stopping and restarting the statute of limitations to bring back what would otherwise be a time-barred application. Lawmakers who backed the measure argue it's meant to restore fairness to the application of the statute of limitations in the mortgage foreclosure process.
The hope is the law will give homeowners a more level playing field in foreclosure proceedings.
"I heartily applaud Governor Kathy Hochul for doing the right thing to make sure the foreclosure process in New York is fair to all parties concerned," said state Sen. James Sanders, who sponsored the legislation. "For most two people, a home is a family’s biggest investment and it is where they live their lives."
The proposal had the support of a wide swath of New York officials as well as foreclosure defense attorneys, who had raised concerns with delays in foreclosure hearings in the state.
“This important law will protect homeowners by preventing mortgage lenders from getting an unfair and unwarranted second bite of the mortgage foreclosure apple," said Assemblywoman Helene Weinstein, who backed the measure in the state Assembly. "The deck has long been stacked against homeowners due to a highly flawed mortgage foreclosure process, and this bill will go a long way to adding back some fairness to the process."