S T A T E O F N E W Y O R K
________________________________________________________________________
6079
2021-2022 Regular Sessions
I N A S S E M B L Y
March 9, 2021
___________
Introduced by 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-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04949-01-1
A. 6079 2
GATION AND WHO DEMONSTRATE FINANCIAL HARDSHIP DURING THE COVERED PERIOD;
AND
(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.