The state Department of Financial Services issued guidance for mortgage servicers, reminding them about their obligations under the state’s Vacant and Abandoned Property Law. The guidance was issued after PHH Mortgage was fined $119,000 for failing to maintain an abandoned property in New Lebanon, New York.
In the guidance, the DFS reminds mortgagees and servicers subject to the law that they must update the vacant and abandoned registry within 30 days of any material change to the status of a registered property. The department noted that they have continued to see errors in the reporting of applicable properties to the registry, including incorrect properties listed, as well as a lack of updated information on previously registered properties.
A material status change includes the occurrence of any event that would remove the property from the requirements of the law, such as the completion of the foreclosure process, the demolition of the house, the property becoming real estate owned, or a lien release – and a transfer in the servicing rights. The registry enables transferee servicers to take over for an existing filing once the transferor has marked the file as inactive.
Additionally, the guidance reiterates that the law applies only to one- to four-family properties that are subject to a mortgage.