Enacts the "deed protection act"

2025 Regular Session Introduced by George Alvarez and 30 co-sponsors

Prohibits foreclosures if a mortgage is secured by a deed or title obtained via fraud or unlawful means, requiring lenders to verify title validity before proceeding.

PRINT NUMBER 9554B

Summary of Bill A09554 (2025-2026) – New York

Purpose and intent

Enacts the “deed protection act” to curb foreclosures where the underlying title to a residential property was obtained through fraud, forgery, or other unlawful means.

The core aim is to prevent foreclosure actions when the mortgage securing the loan is dependent on a deed or title instrument that is not valid due to unlawful conduct.

Key provisions and changes

New provision added to the Banking Law: Introduces proposed § 595-d, “Foreclosure dependent on fraudulent title prohibited.”

Prohibition on foreclosures: A mortgage banker or mortgage loan servicer may not commence, maintain, or proceed with a foreclosure action if they know or have reason to know that the mortgage is secured by a deed or title instrument affecting residential property obtained by fraud, forgery, or other unlawful means, resulting in the mortgagor not having a valid interest.
Duty to review: Before starting a foreclosure action, the lender must conduct a reasonable review of the loan and available records to determine whether there is a reasonable basis to believe the mortgage is secured by a valid and enforceable interest in the property.
Preservation of other rights: The act does not limit or impair any legal or equitable remedies related to fraud, forgery, or other unlawful acts affecting title to residential real property.
Enforcement: Violation of § 595-d would constitute a violation of the Banking Law (i.e., subject to the statute’s enforcement framework).

Who would be affected

Mortgage bankers and mortgage loan servicers conducting foreclosures on residential real property in New York.

Homeowners/borrowers who might have mortgaged property with titles compromised by fraud, forgery, or similar unlawful actions — potentially offering new protections against foreclosure in such scenarios.

The measure does not create new private rights outside the existing banking-law enforcement framework but adds a procedural guardrail for foreclosures tied to invalid title.

Procedural and timeline aspects

Status and process: Introduced January 14, 2026; referred to the Banks Committee, with subsequent amendments and recommittals noted in the bill’s latest action history.

Effective date: The act states that it shall take effect immediately upon enactment.

Legislative path: The bill has undergone amendments and recommittals within the committee process, reflecting refinement before potential floor consideration.

Notable details

The text provides a clear two-step burden on lenders: (1) refrain from foreclosure if title validity is in doubt due to unlawful means, and (2) perform a reasonable pre-foreclosure review to assess whether the mortgage is protected by a valid title.

While it introduces a new prohibition, it explicitly preserves existing fraud-related remedies outside the foreclosure context.

Bottom line

A09554 seeks to prevent foreclosures when the mortgage is tied to an invalid title obtained through fraud or similar unlawful acts, by requiring lenders to assess title validity before foreclosure and prohibiting actions if validity is in question. It adds a targeted safeguard for homeowners against foreclosures based on defective title, while preserving other fraud remedies.