NYDFS Issues Order and Instructions to Regulated Entities in Response to COVID-19

In response to challenges facing the financial services industry as a result of coronavirus (COVID-19), New York's Department of Financial Services (DFS) has issued a COVID-19 compliance order, along with a series of industry guidance letters related to the organizational preparedness of regulated institutions to manage risks associated with the outbreak.

Below is a summary of these recent actions and requests for information. Institutions are encouraged to visit the DFS website for additional updates and information. Hinshaw is well-positioned to assist impacted institutions in their review of the DFS instructions and the preparation of responses. More ›

Legal Guidance Watch: Second Circuit Nostra Sponte Certifies a Series of Mortgage Lender Compliance Questions to New York Court of Appeals

The Second Circuit recently certified two questions to the New York Court of Appeals regarding the requisite proof needed for borrowers to dispute the lender's compliance with New York Real Property Procedures and Acts ("RPAPL") § 1304 and the required filings under RPAPL § 1306 for a multi-borrower mortgage loan. The New York Court of Appeals has not yet ruled on these statutes and the requisite proof needed to comply with them. A decision on these issues could greatly impact the mortgage industry, given the impact of these statutes on mortgage foreclosure proceedings. More ›

An Emerging Trend in Favor of Student Loan Discharges in Bankruptcy

We recently reported on a Fifth Circuit decision that ruled some private, for-profit student loans are dischargeable in bankruptcy without a showing of undue hardship—something unusual and inconsistent with the widely-held belief that student loans are rarely discharged. It turns out that the Fifth Circuit's decision may have initiated a trend, for both private and federal loans. More ›

Governors of California and New York Announce Enhanced Consumer Protection Agendas for 2020

The Governors of California and New York have announced 2020 policy agendas that aim to expand consumer protections in response to what they describe as federal inaction, roll backs, and failures. We explore these proposed changes in detail below. More ›

New York's Highest Court to Determine Whether Voluntary Discontinuance Revokes Acceleration of Debt

We previously discussed the State of New York's Appellate Division for the Second Judicial Department's holding that a lender's voluntary discontinuance of a judicial foreclosure action by itself, whether by court order or stipulation of the parties, is insufficient to evidence a lender's intent to revoke the acceleration of the entire mortgage debt. Now, the legal landscape in New York might drastically change given the Court of Appeals' grant of leave to appeal in Freedom v Engel. More ›

New Edition of 50 State Guide on Student Loan Servicing Regulations Now Available

An important resource for financial services compliance professionals just received a new update. The Third Edition of the 50 State Guide on Student Loan Servicing Regulations—a quick reference guide and resource for student loan servicers regarding the regulations specific to the industry, along with pending legislation, litigation, and court rulings—now also includes language of the rules implementing state student loan servicer laws. More ›

A New Bright-Line Rule in New York Courts: Plead or Move, But a Borrower Can't Just Deny Standing to Challenge Foreclosure

In US Bank N.A. v. Nelson, the New York Appellate Division for the Second Department held that to raise a challenge to a foreclosing lender's standing it is not sufficient merely to deny the lender's allegations. In prior decisions, the Second Department allowed borrowers to raise a standing defense by mere denial of the allegation in the mortgagee's complaint that the plaintiff was the owner and holder of the note and mortgage being foreclosed. Under Nelson, the Second Department overturned its prior decisions and provided a bright line rule for practitioners in that Department. More ›

New York Mandates New Consumer Protections for Relatives of Deceased Debtors

Effective March 28, 2019, § 601-a of New York's General Business Law ("GBL 601-a") will provide additional consumer protections to relatives of deceased borrowers. Typically, when a debtor passes away, the obligations on their uncollected debts pass to the debtor's estate. This can result in confusion about whom debt collectors should contact and what they can say regarding the decedent's unpaid debt. GBL 601-a will require, among other things, that no representations are made to relatives of deceased debtors to the effect that they are obligated to pay the decedent's unpaid debt. More ›

New York Court Slams Door on Lender's Revocation of Acceleration of Entire Mortgage Debt by Voluntary Discontinuance—but Leaves Latch Ajar

The State of New York's Appellate Division for the Second Department has now addressed the issue of whether a lender's voluntary discontinuance of a judicial foreclosure action, whether by court order or stipulation of the parties, is sufficient evidence of a lender's intent to revoke the acceleration of the entire mortgage debt. Unfortunately for mortgage lenders, the court determined voluntary discontinuance is not sufficient. More ›

Consumer Plaintiff Avila Sues Using the Safe Harbor Precedent She Established in Avila Decision—and Loses

Following the Second Circuit's 2016 decision in Avila v. Riexinger & Associates (Avila I), consumer plaintiff Annmarie Avila returned to court in Avila v. Reliant (Avila II) to sue for violations of the Fair Debt Collection Practices Act (FDCPA) under the so called "safe-harbor" provision she helped establish in her previous successful appeal. More ›