When The 90-Day Notice Must Be In Another Language – A New Burden For Lenders In New York

Few lenders and servicers would be unfamiliar with the mandate that for a New York home loan in default a certain 90-day notice is a condition precedent to a foreclosure.  Less widely recognized, however, may be the new requirement for (as of December 20, 2016) special procedures when a non-English speaker is involved.  Problems assuredly lurk here.

Specifically [per the new RPAPL § 1304(5)] where it is known that the borrower has limited English proficiency, the notice must be in the borrower’s native language, or alternatively, a language in which the borrower is proficient.  This mandate prevails provided the language is one of the six most common non-English languages spoken by those with limited English proficiency in New York based upon United States census data.  Such a list with the notice in those six languages is to be posted on the website of the department of financial services.

Here are the potential difficulties for mortgage holders.  How will a mortgage holder know if a borrower has limited English proficiency or what may be the alternative language with which he or she is proficient?  While the statute at least confines these language choices to a category of six, defines them and offers the notice in those languages, nonetheless, the question remains as to how this is to be divined.

It seems apparent that this will have to be part of the mortgage origination process, that is to say, the original lender will need to have inquired and determined with precision whether the use of English was limited (how limited must that be?) and if so, what the native language was, or, again, alternatively glean what the language was with which the borrower was proficient.  It will be up to the application process and staff dedication to ferret out this information with certainty.  Then, the record will have to be preserved so that a servicing department will have the knowledge or, if the mortgage is assigned, that this information travels with the note and mortgage so that subsequent assignees have the requisite information should default ensue necessitating a notice.

If this process is less than perfect, it portends that an ultimate mortgage holder will send the notice in English and encounter a defense that it is void for want of being in one of the alternative foreign tongues mandated by the statute.

What is completely unanswered is how a mortgage holder now will obtain this information if the loan was originated prior to December 20, 2016 – before there was an awareness of this particular obligation.

Mr. Bergman, author of the four-volume treatise, Bergman on New York Mortgage Foreclosures, LexisNexis Matthew Bender (rev. 2017), is a partner with Berkman, Henoch, Peterson, Peddy & Fenchel, P.C. in Garden City, New York. He is also a member of the USFN, The American College of Real Estate Lawyers, The American College of Mortgage Attorneys, an adviser to the New York Times on foreclosure issues and writes a regular servicing column for the New York Law Journal. He is AV rated by Martindale-Hubbell, his biography appears in Who’s Who In American Law and he has been for years listed in Best Lawyers In America and New York Super Lawyers.