Section 1421. Right to seek judicial intervention; mortgagee's liability for failure to comply with this article

1. If the  mortgagee  commences
  proceedings  under  this  article to foreclose a mortgage, or extension,
  amendment, modification or consolidation thereof, executed prior to  the
  effective  date  of this article, the mortgagor may by written notice to
  the mortgagee require that further foreclosure proceedings be  conducted
  judicially  as provided in article thirteen of this chapter. Such notice
  must be delivered to the mortgagee by registered or certified  mail,  or
  such  other  method  as may be specified in the mortgage, postmarked not
  later than forty days after the date the mortgagor receives  the  notice
  of  intention  to foreclose as provided in this article, and shall state
  (a)  the  date  on  which  the  mortgage,   or   extension,   amendment,
  modification  or  consolidation  thereof,  that  the  mortgagee seeks to
  foreclose was executed, and (b) that the  mortgagor  is  exercising  its
  right under this section to require that the foreclosure of the mortgage
  be conducted through the judicial process.
    2.  If  the  mortgagee  commences  proceedings  under  this article to
  foreclose  a  mortgage,  or  extension,   amendment,   modification   or
  consolidation  thereof,  executed  after  the  effective  date  of  this
  article, the mortgagor, not later than forty  days  after  the  date  it
  receives  the  notice  of  intention  to  foreclose  as provided in this
  article, may apply, by order to show cause, to the supreme court in  the
  county in which the mortgaged property is located for an order directing
  that  further  proceedings  be conducted pursuant to article thirteen of
  this chapter, and for a  temporary  restraining  order  staying  further
  proceedings under this article pending a hearing of the application. The
  application  shall  include one or more affidavits (a) stating whether a
  previous application for the same or similar relief has been  made,  and
  if  so the outcome thereof, and (b) stating facts to support one or more
  of the following allegations:
    (1) that  the  mortgage,  or  extension,  amendment,  modification  or
  consolidation  thereof,  sought  to  be  foreclosed  does  not contain a
  provision permitting the foreclosure thereof by power of sale  or  other
  non-judicial means;
    (2)  that  the  obligation  secured  by the mortgage is invalid or not
  otherwise due;
    (3) that the mortgagor  is  not  in  default  under  the  mortgage  or
  otherwise has a meritorious defense to the foreclosure thereof;
    (4)  that the mortgagee has not complied with the terms and conditions
  of this article; or
    (5) that under the facts and circumstances, allowing  the  foreclosure
  to  proceed  under  this  article  would  cause an undue hardship to the
  mortgagor.
    3. If the application is granted, the foreclosure  shall,  unless  the
  court   subsequently  orders  otherwise,  proceed  pursuant  to  article
  thirteen of this chapter for the judicial foreclosure of the mortgage.
    4. If the application is denied, the sale may proceed pursuant to this
  article.
    5. At any time  the  mortgagee  may,  without  prejudice,  voluntarily
  discontinue  proceedings  under  this article and pursue such rights and
  remedies as may be available  to  it  under  article  thirteen  of  this
  chapter.
    6. After receiving the notice of intention to foreclose, an interested
  party  other  than  the mortgagor may petition the court for relief only
  pursuant to the provisions of article sixty-three of the civil  practice
  law  and  rules.  The  court  shall  apply the standards for preliminary
  injunctive  relief  and  shall  consider  whether  granting  the  relief

  requested  will  prejudice the substantial rights of any party or unduly
  delay the adjudication of such rights.
    7. Any person entitled to receive notice of the intention to foreclose
  or  notice of sale under this article may recover from the mortgagee any
  damages caused by the failure  of  the  mortgagee  to  comply  with  the
  procedures and conditions set forth in this article.
    * NB Repealed July 1, 2009