"The new law expands the requirement under RPAPL § 1304, providing that as of January 14, 2010, 3 a lender,4 assignee or a mortgage loan servicer must send a notice to all borrowers with a home loan 5 at least 90 days prior to the commencement of a legal action. (Previously, only borrowers with “high-cost,” “subprime” and “nontraditional” home loans had to be sent this notice. 6) A new provision requires the notice to be sent in a separate envelope from any other mailing or notice. The notice is the same as set forth in the Foreclosure Prevention and Responsible Lending Act of 2008 (“2008 Act”) and must be sent to the borrower by registered or certified mail, as well as by first-class mail, to the last known address of the borrower and if different, to the residence that is subject to the mortgage. The date the notice is mailed is the date that the notice is considered to be given.
Specific and personalized information required: The exact language required for the notice is set forth in the law. 7 The notice must be in fourteen-point font and must state that as of a specific date, the home loan is “X” number of days in default and that the homeowner is at risk of losing their home. The notice must also state that the homeowner can save their home by making a payment of “X” amount of dollars by a specific date, or may consider another option if they are having financial difficulty. The notice must set forth the telephone number of the lender or mortgage servicer, where the homeowner can contact them directly. The notice also must inform the borrower that it will be more beneficial to take immediate action as it is probable that there will be fewer options available the longer the homeowner waits. If the matter is not resolved in 90 days the lender or mortgage servicer can take action against the homeowner, or sooner, if the property is no longer the mortgagor’s primary residence.
Referrals to specified counseling services: One of the primary purposes of the notice is to refer borrowers to agencies that assist homeowners in doing work-outs with lenders, whether it be a loan modification, an easier payment plan, or a period of loan forbearance. The Division of Housing and Community Renewal and the Banking Department must make available on their websites the listing by region of such agencies. The lender or mortgage servicer must attach a list of at least five government approved housing counseling agencies in the homeowner’s geographic region that provide free or low-cost counseling. 8 The notice must also direct the homeowner to call the Banking Department’s Toll-Free Helpline or go to their website for more information.
Exemptions from the notice requirement: The 90-day period does not apply to mortgagors in bankruptcy, or if the borrower does not occupy that residence as their principal dwelling. The notice and the ninety-day period must be provided only once per year to the same borrower for the same loan.
Remedies: A defendant may raise a violation of this section as a defense to a foreclosure action
3 The 90 day notice provision sunsets five years from the effective date.
4 “Lender” means a mortgage banker as defined in Banking Law § 590.1(f) or an exempt organization as defined is Banking Law § 590.1(e). Private lenders who make under five mortgage loans in a year are not obligated to obtain a license under Banking Law § 590.1 to be a mortgage banker.
5 “Home loan” is defined as a loan, including an open-end credit plan in which the borrower is a natural person, the debt is incurred primarily for personal family, or household purposes, and the loan is secured by a mortgage or deed of trust on real estate improved by a one to four family dwelling, or a condominium unit, to be used or intended to be used or occupied wholly or partly, as the home or residence of one or more persons and which is or will be occupied by the borrower as their principal dwelling, but does not include a reverse mortgage transaction. RPAPL § 1304(5)(a).
6 Definitions for “subprime” and “nontraditional” home loans were removed from this section. The 2008 Act referenced the definition of “high-cost” home loans as set forth in Banking Law § 6-l for purposes of this section and therefore, the definition of “high-cost” home loan was not removed.
7 The notice is available on Empire Justice Center’s website at
8 Agencies will include U.S. Dept of Housing and Urban Dev. Approved Housing Counseling Agencies or other such agencies as designated by the division of Housing and Community Renewal (DHCR). The list is provided to lenders by the NYS Banking Department and DHCR, available at