New York Gives Borrowers Right to Recover Attorneys’ Fees in Foreclosure Proceedings

On October 20, the Governor of New York signed into law the Access to Justice in Lending Act, which grants borrowers the right to recover reasonable attorneys’ fees and/or expenses from the mortgagee in a foreclosure of a residential property. Under the new Section 282 of New York’s real property law, if a residential mortgage permits the mortgagee to recover attorneys’ fees and/or expenses as a result of the borrower’s failure to perform any covenant or agreement in the mortgage, then the mortgage is construed to contain a reciprocal right on behalf of the borrower to recover reasonable attorneys’ fees and/or expenses if the mortgagee fails to perform any covenant or agreement in the mortgage. The borrower may recover such fees and expenses in successful defense of a foreclosure action, by counterclaim, or in a separate action against the mortgagee. Waiver of rights under the new Section 282 is void as against public policy.