Senate Bill S1598

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1598
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 14, 2021
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Banks
 
 AN ACT to amend the banking law, in relation to allowing for  mortgagors
   to  cancel  or  renegotiate forbearance agreements made during a state
   disaster emergency

   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.  CANCELLATION  OR  RENEGOTIATION  OF  FORBEARANCE   AGREEMENTS
 EXECUTED  DURING A STATE DISASTER EMERGENCY. 1. AS USED IN THIS SECTION,
 THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "COVERED PERIOD" MEANS THE PERIOD BEGINNING ON THE DATE ON WHICH A
 STATE DISASTER EMERGENCY, INCLUDING, BUT NOT LIMITED  TO,  THE  COVID-19
 PANDEMIC,  BEGINS  AND  ENDING ON THE DATE THAT IS THIRTY DAYS AFTER THE
 DATE ON WHICH SUCH STATE DISASTER EMERGENCY ENDS.
   (B) "QUALIFIED MORTGAGOR" MEANS AN INDIVIDUAL WHO RESIDES IN NEW  YORK
 WHOSE  PRINCIPAL DWELLING IS ENCUMBERED BY A HOME LOAN PURSUANT TO PARA-
 GRAPH (A) OF SUBDIVISION SIX OF SECTION THIRTEEN  HUNDRED  FOUR  OF  THE
 REAL PROPERTY ACTIONS AND PROCEEDINGS LAW OR WHOSE PRINCIPAL DWELLING IS
 A  CO-OPERATIVE  UNIT  WHOSE SHARES ARE ENCUMBERED BY ANY LOAN OTHERWISE
 MEETING THE REQUIREMENTS OF A HOME LOAN UNDER PARAGRAPH (A) OF  SUBDIVI-
 SION  SIX  OF SECTION THIRTEEN HUNDRED FOUR OF THE REAL PROPERTY ACTIONS
 AND PROCEEDINGS LAW, FROM OR SERVICED BY A REGULATED INSTITUTION.
   (C) "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  PROVIDE  QUALIFIED  MORTGAGORS  WHO HAVE EXECUTED A
 FORBEARANCE AGREEMENT WITH SUCH  REGULATED  INSTITUTION  THE  OPTION  TO
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06242-01-1
              

 S. 1598                             2
 
 CANCEL  OR RENEGOTIATE THE TERMS OF SUCH AGREEMENT IF SUCH AGREEMENT WAS
 EXECUTED DURING A COVERED PERIOD AND:
   (A)  INCLUDES  TERMS  WHICH  EXCLUDE THE OPTION OF PLACING MISSED LOAN
 PAYMENTS ON THE BACK-END OF THE LOAN WHICH IS SUBJECT OF  SUCH  FORBEAR-
 ANCE AGREEMENT; OR
   (B)  REQUIRES  MISSED LOAN PAYMENTS BE MADE UP IN FULL WITHIN A PERIOD
 OF LESS THAN TWELVE MONTHS FROM THE DATE OF SUCH AGREEMENT.
   3. 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.