S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10876
 
                           I N  A S S E M B L Y
 
                               July 24, 2020
                                ___________
 
 Introduced by COMMITTEE ON RULES -- (at request of M. of A. Jean-Pierre)
   -- read once and referred to the Committee on Banks
 
 AN  ACT  to amend the banking law, in relation to authorizing commercial
   mortgage forbearance during the COVID-19 pandemic
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1.  The banking law is amended by adding a new section 9-y to
 read as follows:
   § 9-Y. MORTGAGE FORBEARANCE. 1. AS USED IN THIS SECTION, THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "COVERED PERIOD" MEANS MARCH SEVENTH, TWO  THOUSAND  TWENTY  UNTIL
 THE  DATE  ON  WHICH  NONE  OF  THE  PROVISIONS THAT CLOSED OR OTHERWISE
 RESTRICTED PUBLIC OR PRIVATE BUSINESSES OR  PLACES  OF  PUBLIC  ACCOMMO-
 DATION,  OR  REQUIRED  POSTPONEMENT OR CANCELLATION OF ALL NON-ESSENTIAL
 GATHERINGS OF INDIVIDUALS OF ANY SIZE FOR ANY REASON IN EXECUTIVE  ORDER
 NUMBERS 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, 202.13
 OR 202.14 OF TWO THOUSAND TWENTY, AS EXTENDED BY EXECUTIVE ORDER NUMBERS
 202.28 AND 202.31 AND AS FURTHER EXTENDED BY ANY FUTURE EXECUTIVE ORDER,
 ISSUED  IN  RESPONSE  TO  THE COVID-19 PANDEMIC CONTINUE TO APPLY IN THE
 COUNTY IN WHICH THE PROPERTY ENCUMBERED BY THE MORTGAGE IN  QUESTION  IS
 LOCATED; AND
   (B)  "REGULATED  INSTITUTION"  MEANS  ANY  NEW  YORK REGULATED BANKING
 ORGANIZATION AS DEFINED UNDER THIS CHAPTER AND ANY  NEW  YORK  REGULATED
 MORTGAGE SERVICER ENTITY SUBJECT TO THE AUTHORITY OF THE DEPARTMENT.
   2.  NOTWITHSTANDING  ANY  OTHER  PROVISION  OF LAW, NEW YORK REGULATED
 INSTITUTIONS SHALL:
   (A) MAKE APPLICATIONS FOR FORBEARANCE OF ANY PAYMENT DUE ON A  COMMER-
 CIAL  MORTGAGE OF A PROPERTY LOCATED IN NEW YORK WIDELY AVAILABLE TO ANY
 QUALIFIED COMMERCIAL  MORTGAGOR  INCLUDING  THOSE  WHO  ARE  ALREADY  IN
 ARREARS  OR  ON  A  TRIAL PERIOD PLAN OR WHO HAVE APPLIED FOR LOSS MITI-
 GATION AND WHO DEMONSTRATE FINANCIAL HARDSHIP DURING THE COVERED PERIOD;
 AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD16436-04-0
              

 A. 10876                            2
 
   (B) GRANT SUCH FORBEARANCE FOR A PERIOD OF ONE HUNDRED TWENTY DAYS  TO
 ANY  SUCH  QUALIFIED  COMMERCIAL  MORTGAGOR,  SUBJECT  TO THE SAFETY AND
 SOUNDNESS REQUIREMENTS OF THE REGULATED INSTITUTION.
   (C)  SUCH  FORBEARANCE MAY BE BACKDATED TO MARCH SEVENTH, TWO THOUSAND
 TWENTY.
   3. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ANY  MORTGAGE  FORBEAR-
 ANCE GRANTED BY A REGULATED INSTITUTION PURSUANT TO THIS SECTION, OR ANY
 OTHER  LAW, RULE OR REGULATION, TO THE QUALIFIED COMMERCIAL MORTGAGOR AS
 A RESULT OF FINANCIAL  HARDSHIP  DURING  THE  COVERED  PERIOD  SHALL  BE
 SUBJECT TO THE FOLLOWING PROVISIONS:
   (A)  THE  REGULATED INSTITUTION SHALL DEFER ARREARS ACCUMULATED DURING
 THE FORBEARANCE PERIOD AS A NON-INTEREST BEARING BALLOON PAYMENT PAYABLE
 TWELVE MONTHS AFTER THE END OF THE FORBEARANCE PERIOD  AND  SHALL  WAIVE
 ANY LATE FEES ACCUMULATED AS A RESULT OF THE FORBEARANCE; AND
   (B)  THE  TOTAL VALUE OF THE DEFERRED MORTGAGE PAYMENT SHALL BE APPOR-
 TIONED EACH MONTH TO EACH TENANT ACCORDING  TO  THE  PERCENTAGE  OF  THE
 TOTAL RENTS DUE THAT THEIR RENTAL OBLIGATION REPRESENTS ON THE MORTGAGED
 PROPERTY  IN  RECEIPT  OF  THE FORBEARANCE. EACH COMMERCIAL TENANT SHALL
 HAVE THEIR PRO RATA SHARE OF THE FORBORNE MORTGAGE PAYMENT  BE  DEFERRED
 EACH  MONTH  FOR  THE  DURATION OF THE FORBEARANCE PERIOD. SUCH DEFERRED
 RENT SHALL BE DUE WITHIN TWELVE MONTHS AFTER THE END OF THE  FORBEARANCE
 PERIOD,  AND  SHALL  NOT ACCUMULATE INTEREST OR BE SUBJECT TO LATE FEES;
 AND
   (C) NO EVICTION PROCEEDINGS MAY BE COMMENCED OR CONTINUED AGAINST  ANY
 RESIDENTIAL  OR  COMMERCIAL TENANT FOR NONPAYMENT OF RENTS THAT CAME DUE
 DURING THE FORBEARANCE PERIOD.
   4. NOTWITHSTANDING ANY OTHER PROVISION OF  LAW,  ADHERENCE  WITH  THIS
 SECTION  SHALL  BE  A  CONDITION  PRECEDENT  TO COMMENCING A FORECLOSURE
 ACTION STEMMING FROM MISSED PAYMENTS WHICH  WOULD  HAVE  OTHERWISE  BEEN
 SUBJECT  TO  THIS  SECTION.  A DEFENDANT MAY RAISE THE VIOLATION OF THIS
 SECTION AS A DEFENSE TO A FORECLOSURE ACTION COMMENCED  ON  THE  DEFEND-
 ANT'S  PROPERTY  WHEN SUCH ACTION IS BASED ON MISSED PAYMENTS THAT WOULD
 HAVE OTHERWISE BEEN SUBJECT TO THIS SECTION.
   5. NOTWITHSTANDING ANYTHING TO THE  CONTRARY  IN  THIS  SECTION,  THIS
 SECTION SHALL NOT APPLY TO, AND DOES NOT AFFECT ANY MORTGAGE LOANS MADE,
 INSURED,  OR  SECURITIZED BY ANY AGENCY OR INSTRUMENTALITY OF THE UNITED
 STATES, ANY GOVERNMENT SPONSORED ENTERPRISE,  OR  A  FEDERAL  HOME  LOAN
 BANK,  OR  THE RIGHTS AND OBLIGATIONS OF ANY LENDER, ISSUER, SERVICER OR
 TRUSTEE OF SUCH OBLIGATIONS,  INCLUDING  SERVICERS  FOR  THE  GOVERNMENT
 NATIONAL MORTGAGE ASSOCIATION.
   § 2. This act shall take effect immediately.