General Industry Letters
Mortgage Banking Letters
Executive Order #52 and Pre-Foreclosure Notices and Filings with the Department of Financial Services
March 19, 2013
To the Individual or Institution Addressed:
Section 1304 of the Real Property Actions and Proceedings Law (“RPAPL”) requires lenders, assignees or mortgage loan servicers to give borrowers on home loans at least ninety days prior notice (“Notice”) before commencing a foreclosure proceeding. Section 1306 of RPAPL in turn requires that within three business days of the mailing of each Notice lenders file with the Department of Financial Services (the “Department”) certain information regarding the borrower and his or her loan.
In the aftermath of Superstorm Sandy, Governor Cuomo issued Executive Order 52. This Order, issued on October 31, 2012, provided in relevant part:
In addition, I hereby temporarily suspend and modify, for the period from the date of this Executive Order until further notice, any other statute, local law, ordinance, order, rule or regulation or part thereof, establishing limitations of time for the filing or service of any legal action, notice or other process or proceeding that the courts lack authority to extend through the exercise of discretion, where any limitation of time concludes during the period commencing from the date that the disaster emergency was declared pursuant to Executive Order Number 47, issued on October 26, 2012, until further notice.
The Order expired on December 25, 2012.
A number of lenders have raised questions regarding the effectiveness of their Notices and Department filings in light of the disruptions caused by Sandy and under the Governor’s Executive Order. It is beyond the authority of the Department to provide specific guidance to individual lenders, assignees, and mortgage loan servicers with respect to the impact of the Executive Order on a particular situation. The Department recommends that you analyze the legal effect of your particular fact scenario with your counsel.
Nevertheless, it is the Department’s view that Notices and filings made during the effectiveness of the Executive Order may be found to be legally defective. The Department recommends that if lenders have not yet done so, they should re-serve any Notice and resubmit any filing made during the period covered by the Executive Order.
Daniel S. Alter