New York Senate Bill S09309

New York 2025-2026 Regular Session

• Introduced: 2/27/26
• Refer: 2/27/26
• Report Pass: 5/12/26

Caption

Enacts the "deed protection act" in relation to prohibiting a mortgage banker or mortgage loan servicer from commencing, maintaining, or proceeding with a foreclosure action on a mortgage loan where such mortgage banker or mortgage loan servicer knows or has reason to know that the mortgage securing such loan is dependent on a deed, conveyance, or other instrument affecting title to residential real property that was procured by fraud, forgery, or other unlawful means.

Summary

S09309, the “deed protection act,” would amend the New York Banking Law to restrict foreclosure actions on residential mortgage loans when the mortgage is tied to a deed or other title instrument that was obtained through fraud, forgery, or other unlawful means. The bill bars a mortgage banker or mortgage loan servicer from commencing, maintaining, or continuing a foreclosure if they know or have reason to know that the underlying title is invalid because the mortgagor did not obtain a valid interest in the property. Before filing a foreclosure, the bill requires mortgage bankers and servicers to conduct a reasonable review of the loan and available records to determine whether there is a reasonable basis to believe the mortgage is secured by a valid and enforceable interest in the residential property. It also states that the new section does not limit existing legal or equitable remedies for fraud, forgery, or other unlawful acts affecting title, and a violation would be treated as a violation of the Banking Law article.

Impact

The bill would create a new section 595-d in the Banking Law and impose a pre-foreclosure due diligence obligation on mortgage bankers and mortgage loan servicers for residential real property. It would effectively prevent foreclosure proceedings where the lender or servicer is aware, or should be aware, that the mortgage depends on a fraudulent or otherwise invalid deed or conveyance, while preserving separate fraud and title-related remedies under existing law.

Sentiment

Based on the bill text and available context, the measure appears to be framed as a consumer-protection and anti-fraud reform aimed at preventing enforcement of mortgages rooted in defective title. There is no recorded committee transcript or vote history provided, so no formal opposition or support can be measured from the legislative record here; however, the bill’s structure suggests a generally protective posture toward homeowners and property owners affected by title fraud.

Contention

The main point of potential contention is the burden placed on mortgage bankers and servicers to investigate title validity before foreclosure, including what constitutes a “reasonable review” and when they “know or have reason to know” of a title defect. Lenders and servicers may view the bill as increasing compliance costs and creating uncertainty in foreclosure enforcement, while supporters would likely argue that the requirement is necessary to stop foreclosures based on fraudulent or forged deeds and to protect residential property owners from wrongful loss of their homes.