NY Passes Prohibitions Regarding Registration of Defaulted Mortgages

As of November 21, 2022, New York prohibits local government registration of defaulted residential mortgages before a notice of pendency is filed in court.  The new law also places limits on local governments and mortgage lenders and servicers that use these registries.

This new section of New York’s Real Property Actions and Proceedings law, among other things, (1) prohibits any laws requiring a homeowner to register their own default, (2) caps the amount a local government entity can charge for this registration at $75 annually, and (3) prohibits a lender or servicer from passing the local government’s default registration fee or any fine for not complying with this new law on to the defaulting homeowner.  Prior to this law, regulators had found mortgage lenders and servicers were passing the often high charge for registration on to the defaulting homeowner.