New York DFS Fines Servicer $100,000 For Failing to Register and Maintain Abandoned Properties

New York’s Department of Financial Services (the “DFS”) recently entered a consent order fining a mortgage loan servicer (“SN”) $100,000 for failing to register and maintain two abandoned properties.  See In re: SN Servicing Corporation, (Jan. 14, 2019).  Under the Abandoned Property Relief Act (the “Act”), lenders and servicers with first mortgage liens on vacant or abandoned residential properties are required to register, secure and maintain these properties.  See RPAPL §§ 1308, 1310.  Failure to comply could result in fines of up to $500 per day per property. 

In this matter, the DFS received a complaint in 2017 from a municipal fire department about two abandoned and unmaintained properties in the same town.  The DFS determined that SN was the servicer for both properties, but that it had failed to register, secure or maintain them.  Although the DFS requested that SN remediate the issues, SN failed to do so.  Based on these violations of the Act, the DFS issued a penalty of $100,000 against SN.  The consent order further required SN to undergo continued auditing to ensure compliance with the Act, including requirements that SN will provide bi-monthly reports that confirm continued compliance and also that SN will provide inspection and maintenance reports for all of SN’s properties subject to the Act.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Dylan Goetsch at dgoetsch@riker.com.