The New York General Assembly has prefiled a bill that would allow mortgagors to receive assignments of mortgage in lieu of a discharge of mortgage when the mortgagor is refinancing an existing loan.
The bill, SB 25, was introduced by Sen. John DeFrancisco, R-Syracuse.
Under the proposed law, the mortgagor, at his or her option, could demand an assignment of the mortgagor’s note and mortgage securing its payment to another lender. The original lender then would assign the mortgagor’s note and mortgage securing its payment to another lender upon demand.
The demand for the assignment of mortgage would have to be made by the mortgagor to the mortgagee in writing within 20 days of closing on the refinancing and would state that the purpose of the assignment is to effectuate the refinancing of the existing loan with a new lender. The person signing the assignment would have to deliver the assignment and any necessary accompanying papers or affidavits at least two days prior to the closing, to the escrow agent designated by the mortgagor and the mortgagee or original lender.
Upon closing, the escrow agent would have to transmit the assignment and any necessary accompanying papers or affidavits to the new lender or mortgagee.
The bill states that its provisions “shall neither expand nor diminish the liability against a mortgagee who, after a good faith effort, is unable to deliver the note to the escrow agent because the note was misplaced or lost.”