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Pre-Foreclosure and Foreclosure Notice Home Page (RPAPL §§ 1304, 1304)

RPAPL § 1303 has been amended to require plaintiffs in foreclosure actions to provide a more specific and helpful notice to borrowers regarding their rights and obligations during the foreclosure process. Specifically, the notice must indicate that homeowners have the right to remain in their homes until a foreclosure sale occurs and the obligation to maintain their property and pay applicable taxes until such time. This section is intended to help prevent properties from becoming vacant in the first place. The specific language required by RPAPL § 1303 is available in here.

RPAPL 1304 requires mortgage creditors to give borrowers at least ninety days’ notice before commencing a foreclosure action. Currently, this Pre-Foreclosure Notice (“PFN”) must include the following language: “As of ___, your home loan is ___ days in default…You can cure this default by making the payment of ___ dollars by ___.” Unfortunately, borrowers often interpreted this provision to mean that as long as the borrower provided the stated amount by the date specified, the loan would be reinstated. Quite often, the “cure date” specified in the PFN is the earliest date on which the creditor can start a foreclosure action, which is 90 days after sending the PFN. When the borrower waits a full 90 days to provide the amount specified, any missed payments and associated interest and fees from the intervening months would be added to the deficiency. In such a case, the borrower who submits the amount set forth in the PFN would remain in default due to intervening accruals, despite his or her good-faith efforts to address the default specified in the PFN.

The new law addresses this issue by amending the first line of the notice to read "As of ____ your home loan is ____ days and ___ dollars in default.” Similarly, it adds language to RPAPL § 1304 which highlights the borrower’s ongoing rights and responsibilities throughout the foreclosure process. The new pre-foreclosure language is available here.

Updated 12/20/2016

 

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