Shown verbatim: the complete text as captured from the official source posted by the New York State Senate, fetched 2026-08-11. Nothing is edited or removed. Where this bill amends existing law, language marked for deletion in the official source appears here in brackets. The official bill page.
S T A T E O F N E W Y O R K
________________________________________________________________________
8768
I N S E N A T E
January 8, 2026
___________
Introduced by Sen. BAILEY -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the real property law and the real property actions and
proceedings law, in relation to the discharge of a mortgage; and to
amend a chapter of the laws of 2025 amending the real property law and
the real property actions and proceedings law relating to discharge of
a mortgage, as proposed in legislative bills numbers S. 6363 and A.
2739, in relation to the effectiveness thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph (b) of subdivision 2 of section 275 of the real
property law, as added by a chapter of the laws of 2025 amending the
real property law and the real property actions and proceedings law
relating to discharge of a mortgage, as proposed in legislative bills
numbers S. 6363 and A. 2739, is amended to read as follows:
(b) [Notwithstanding any provision of this section to the contrary, if
payment is received at the location and in the manner specified by the
mortgagee, the mortgagee must accept and may not return or destroy any
payment received in reliance on a payoff statement and must promptly
apply such payment to the unpaid principal, interest or any other
amounts due under the mortgage.] NO MORTGAGEE SHALL RETURN, DESTROY, OR
OTHERWISE REFUSE TO ACCEPT A PAYMENT MADE PURSUANT TO THE TERMS OF A
PAYOFF LETTER, INCLUDING BUT NOT LIMITED TO TERMS REGARDING THE LOCATION
AND THE MANNER OF PAYMENT SPECIFIED BY THE MORTGAGEE, EVEN IF SUCH
PAYMENT DOES NOT COVER THE FULL AMOUNT OF PRINCIPAL, INTEREST, AND ANY
OTHER AMOUNTS DUE AND OWING UNDER THE MORTGAGE, PROVIDED, HOWEVER, IF
THERE IS A DEFECT WITH THE PAYMENT THAT PREVENTS THE MORTGAGEE FROM
IDENTIFYING WITH REASONABLE DILIGENCE THE MORTGAGE FOR WHICH SUCH
PAYMENT IS MADE, THE MORTGAGEE MAY REFUSE TO ACCEPT SUCH PAYMENT AND
RETURN THE PAYMENT TO THE REMITTER. THE MORTGAGEE SHALL APPLY SUCH
PAYMENT TO THE UNPAID PRINCIPAL, INTEREST OR ANY OTHER AMOUNTS DUE
UNDER THE MORTGAGE, PROVIDED THAT A PAYMENT MADE PURSUANT TO A PAYOFF
STATEMENT SHALL NOT RESULT IN THE ISSUANCE OF A CERTIFICATE OF DISCHARGE
OF MORTGAGE PURSUANT TO SUBDIVISION ONE OF THIS SECTION OR IN THE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05468-02-6
S. 8768 2
EXECUTION OF A SATISFACTION OF MORTGAGE PURSUANT TO SUBDIVISION ONE OF
SECTION NINETEEN HUNDRED TWENTY-ONE OF THE REAL PROPERTY ACTIONS AND
PROCEEDINGS LAW UNLESS THE PAYMENT COVERS THE FULL AMOUNT OF PRINCIPAL,
INTEREST, AND ANY OTHER AMOUNTS DUE AND OWING UNDER THE MORTGAGE.
§ 2. Paragraph (b) of subdivision 1 of section 1921 of the real prop-
erty actions and proceedings law, as added by a chapter of the laws of
2025 amending the real property law and the real property actions and
proceedings law relating to discharge of a mortgage, as proposed in
legislative bills numbers S. 6363 and A. 2739, is amended to read as
follows:
(b) [Notwithstanding any provision of this section or section nineteen
hundred twenty-one-a of this article to the contrary, if payment is
received at the location and in the manner specified by the mortgagee,
the mortgagee must accept and may not return or destroy any payment
received in reliance on a payoff statement and must promptly apply such
payment to the unpaid principal, interest or any other amounts due under
the mortgage.] NO MORTGAGEE SHALL RETURN, DESTROY, OR OTHERWISE REFUSE
TO ACCEPT A PAYMENT MADE PURSUANT TO THE TERMS OF A PAYOFF LETTER,
INCLUDING BUT NOT LIMITED TO TERMS REGARDING THE LOCATION AND THE MANNER
OF PAYMENT SPECIFIED BY THE MORTGAGEE, EVEN IF SUCH PAYMENT DOES NOT
COVER THE FULL AMOUNT OF PRINCIPAL, INTEREST, AND ANY OTHER AMOUNTS DUE
AND OWING UNDER THE MORTGAGE, PROVIDED, HOWEVER, IF THERE IS A DEFECT
WITH THE PAYMENT THAT PREVENTS THE MORTGAGEE FROM IDENTIFYING WITH
REASONABLE DILIGENCE THE MORTGAGE FOR WHICH SUCH PAYMENT IS MADE, THE
MORTGAGEE MAY REFUSE TO ACCEPT SUCH PAYMENT AND RETURN THE PAYMENT TO
THE REMITTER. THE MORTGAGEE SHALL APPLY SUCH PAYMENT TO THE UNPAID
PRINCIPAL, INTEREST OR ANY OTHER AMOUNTS DUE UNDER THE MORTGAGE,
PROVIDED THAT A PAYMENT MADE PURSUANT TO A PAYOFF STATEMENT SHALL NOT
RESULT IN THE EXECUTION OF A SATISFACTION OF MORTGAGE PURSUANT TO PARA-
GRAPH (A) OF THIS SUBDIVISION OR IN THE ISSUANCE OF A CERTIFICATE OF
DISCHARGE OF MORTGAGE PURSUANT TO SUBDIVISION ONE OF SECTION TWO HUNDRED
SEVENTY-FIVE OF THE REAL PROPERTY LAW UNLESS THE PAYMENT COVERS THE FULL
AMOUNT OF PRINCIPAL, INTEREST, AND ANY OTHER AMOUNTS DUE AND OWING UNDER
THE MORTGAGE.
§ 3. Section 3 of a chapter of the laws of 2025 amending the real
property law and the real property actions and proceedings law relating
to discharge of a mortgage, as proposed in legislative bills numbers S.
6363 and A. 2739, is amended to read as follows:
§ 3. This act shall take effect [immediately] ON THE ONE HUNDRED
EIGHTIETH DAY AFTER IT SHALL HAVE BECOME A LAW.
§ 4. This act shall take effect immediately; provided, however, that
sections one and two of this act shall take effect on the same date and
in the same manner as a chapter of the laws of 2025 amending the real
property law and the real property actions and proceedings law relating
to discharge of a mortgage, as proposed in legislative bills numbers S.
6363 and A. 2739, takes effect.Every fact on this page links to its source, starting with the official bill record.