Senate Bill S5838

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5838
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              March 20, 2023
                                ___________
 
 Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Banks
 
 AN ACT authorizing certain state regulated institutions to offer  disas-
   ter forbearance agreements to qualified mortgagors
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. 1. As used in this act the following terms shall  have  the
 following meanings:
   (a)  "Disaster forbearance agreement" means (i) the deferment of total
 arrearages, including any escrow advances, to the end  of  the  existing
 term  of  the  loan,  without  charging  or collection of any additional
 interest on the deferred amount; or (ii) the extension of  the  term  of
 the  mortgage  loan,  and capitalization, deferral or forgiveness of all
 escrow advances and other  arrearages,  provided  this  loss  mitigation
 option  reduces  the  principal  and interest payment on the loan if the
 lender or servicer has information indicating that the  borrower  cannot
 resume  the  pre-forbearance  mortgage  payments  or  if the borrower is
 unable to make the payments under payment subparagraph (i) of this para-
 graph.
   (b) "Qualified mortgagor" means a residential or  commercial  borrower
 whose  mortgage  loan  became delinquent 60 days or more due directly or
 indirectly to the COVID-19 emergency or between March 7,  2020  and  the
 effective date of this act.
   (c)  "Regulated  institution" means any state regulated banking organ-
 ization as defined in section 2 of the banking law and any  state  regu-
 lated  mortgage  servicer entity subject to the authority of the depart-
 ment of financial services.
   2. Notwithstanding any provision of law to the contrary,  every  regu-
 lated  institution  is  authorized  to  automatically  offer  a disaster
 forbearance agreement that begins on the effective date of this act  for
 a  period  of  60 days. No documents will be required from the qualified
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06396-01-3
              

 S. 5838                             2
 
 mortgagor with respect to a disaster forbearance  agreement  other  than
 the  borrower's  affirmation  (oral  or written) to a financial hardship
 that prevents the borrower from making timely payments on  the  mortgage
 loan due, directly or indirectly, to the COVID-19 emergency.
   (a)  A  disaster  forbearance agreement shall be extended for an addi-
 tional 120 days upon the borrower's request, oral or written,  submitted
 to  the lender or servicer affirming that the borrower is experiencing a
 financial hardship that prevents the borrower from  making  payments  on
 the mortgage due, directly or indirectly, to the COVID-19 emergency.
   (b)  A  forbearance  extended  under paragraph (a) of this subdivision
 shall be extended for an additional 180 days not to exceed 360 days upon
 the borrower's request, oral or written,  submitted  to  the  lender  or
 servicer  affirming  that the borrower is experiencing a financial hard-
 ship that prevents the borrower from making  payments  on  the  mortgage
 due, directly or indirectly, to the COVID-19 emergency.
   3.  Treatment after forbearance. A lender or servicer of such loan (a)
 may not charge any late fees, penalties or other charges with respect to
 payments on the loan that were due during  the  forbearance  period,  if
 such  payments are made timely during the term of the agreement; and (b)
 is prohibited from reporting any adverse information to a credit  agency
 with  respect  to  any  payments  on  the  loan that were due during the
 forbearance period, if such payments are made timely during the term  of
 the agreement.
   4. The superintendent of financial services shall promulgate any rules
 and regulations necessary to implement the provisions of this act.
   § 2. This act shall take effect immediately.