Last year, Governor Paterson signed into law the Access to Justice in Lending Act--New York Real Property Law § 282--which allows borrowers to collect reasonable attorneys' fees and expenses from their lenders in residential foreclosure cases.
This protection is triggered whenever a mortgage provides that a lender may recover fees and expenses in a foreclosure case or may recoup those monies as additional payments. In other words, when such language exists in the loan documents, a borrower now has a reciprocal right to get fees when a suit is filed against the lender or when a borrower has successfully defended against a mortgage-related claim.
Please note that this relief only applies to one- to four- family homes or a cooperative or condominium unit occupied by the borrower.
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Here's the text of the statute--RPL § 282--in its entirety:
§ 282. Mortgagor's right to recover attorneys' fees in actions or proceedings arising out of foreclosures of residential property. 1. Whenever a covenant contained in a mortgage on residential real property shall provide that in any action or proceeding to foreclose the mortgage that the mortgagee may recover attorneys' fees and/or expenses incurred as the result of the failure of the mortgagor to perform any covenant or agreement contained in such mortgage, or that amounts paid by the mortgagee therefor shall be paid by the mortgagor as additional payment, there shall be implied in such mortgage a covenant by the mortgagee to pay to the mortgagor the reasonable attorneys' fees and/or expenses incurred by the mortgagor as the result of the failure of the mortgagee to perform any covenant or agreement on its part to be performed under the mortgage or in the successful defense of any action or proceeding commenced by the mortgagee against the mortgagor arising out of the contract, and an agreement that such fees and expenses may be recovered as provided by law in an action commenced against the mortgagee or by way of counterclaim in any action or proceeding commenced by the mortgagee against the mortgagor. Any waiver of this section shall be void as against public policy. 2. For the purposes of this section, "residential real property" means real property improved by a one- to four-family residence, a condominium that is occupied by the mortgagor or a cooperative unit that is occupied by the mortgagor.