Banking Interpretations

General Regulations Part 419

Marjorie E. Gross/legal/NYSBD

To [---]


Subject:  NYS Disclosure in HAMP Foreclosures 

Your June 24 email to Barbara Hall Ballard asks whether a letter from a lender or servicer to a borrower denying a HAMP loan modification must include the language "If you believe the loss mitigation has been wrongly denied, you may file a complaint with the New York Banking Department."

The language you quote comes from Part 419.11(d) of the Regulations of the Superintendent of Banks, also known as the Business Conduct Rules for Mortgage Loan Servicers, which reads as follows:

Where the Servicer determines that the borrower cannot be approved for a loan modification or other requested loss mitigation option, the written notice must state with specificity the reasons for the determination, contact information for a person at the mortgage servicer to reconsider such a denial and any other foreclosure prevention alternatives for which the borrower may be considered. In addition, such denial shall also include the following statement, in boldface type and in print no smaller than the largest print used elsewhere in the main body of the denial: If you believe the loss mitigation request has been wrongly denied, you may file a complaint with the New York State Banking Department at 1-877-BANK-NYS (226-5679) or

The Business Conduct Rules were adopted by the Superintendent under Banking Law Section 590(5)(d). Under Banking Law Section 590(2)(b-1), a mortgage loan servicer -- even one that is exempt from registration as a mortgage loan servicer because it is a mortgage bankers, mortgage broker or exempt organization -- is required to comply with any regulation applicable to mortgage loan servicers prescribed by the superintendent with respect to mortgage loan servicers.

Consequently, any servicer servicing loans in New York must include the language notifying consumers of their right to file a complaint with us as a result of a HAMP denial notice.

Marjorie E. Gross
Deputy Superintendent and General Counsel
New York State Banking Department
One State Street
New York, NY 10004