Effective November 12, 2019, the New York Banking Law has been changed to required that:
If a mortgage that is the subject of an application for a modification of the mortgage terms is sold or transferred during the modification process, the bank or financial institution selling or transferring such mortgage shall provide the borrower with a written list of all documents relating to such application for modification that were provided to the bank or financial institution to which such mortgage was sold or transferred.
Additionally, If a borrower has been approved in writing for a first lien loan modification or other modification to avoid foreclosure, and the servicing of such borrower’s loan is transferred or sold to another mortgage servicer, the subsequent mortgage servicer shall assume all duties and obligations related to any previously approved first lien loan modification or other foreclosure prevention alternative.
It will be more important than ever to have smooth transitions of files that are in the modification process. It’s critical that all communication is well documented and conveyed to the new financial institution.
For more information, please contact Deborah Gallo, Director of Operations at [email protected]