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This entry was published on 2021-04-23
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SECTION 9-X
Mortgage forbearance
Banking (BNK) CHAPTER 2, ARTICLE 1
* § 9-x. Mortgage forbearance. 1. As used in this section, the
following terms shall have the following meanings:

(a) "Covered period" means March 7, 2020 until the later of December
31, 2021 or the date on which none of the provisions that closed or
otherwise restricted public or private businesses or places of public
accommodation, or required postponement or cancellation of all
non-essential gatherings of individuals of any size for any reason in
Executive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10,
202.11, 202.13 or 202.14, as extended by Executive Orders 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 of the
qualified mortgagor's residence;

(b) "qualified mortgagor" means an individual (i) whose primary
residence is located in New York and is encumbered by a home loan
pursuant to paragraph (a) of subdivision six of section thirteen hundred
four of the real property actions and proceedings law or whose primary
residence is located in New York and is a co-operative unit whose shares
are encumbered by any loan otherwise meeting the requirements of a home
loan under paragraph (a) of subdivision six of section thirteen hundred
four of the real property actions and proceedings law, from or serviced
by a regulated institution; and (ii) who demonstrates financial hardship
as a result of COVID-19 during the covered period;

(c) "regulated institution" means any New York regulated banking
organization as defined in this chapter and any New York regulated
mortgage servicer entity subject to supervision by the department; and

(d) "trial period plan" means an agreement whereby the mortgagor is
required to make trial payments in full and on-time in order to be
considered for a permanent loan modification.

2. Notwithstanding any other provision of law, New York regulated
institutions shall:

(a) make applications for forbearance of any payment due on a
residential mortgage of a property located in New York widely available
to any qualified mortgagor who, during the covered period, is in arrears
or on a trial period plan, or who has applied for loss mitigation; and

(b) grant such forbearance of all monthly payments due with respect to
the mortgage secured by the qualified mortgagor's primary residence in
New York for a period of up to one hundred eighty days to any such
qualified mortgagor, with the option to extend the forbearance of such
monthly payments for up to an additional one hundred eighty days
provided that this extension is subject to the mortgagor demonstrating
continued financial hardship. If any qualified mortgagor has already
received a forbearance pursuant to executive order 202.9 of two thousand
twenty, the time of such forbearance shall be considered as part of the
requirement of this section to provide a forbearance of up to one
hundred eighty days, and any extension thereof pursuant to this section.

(c) Such forbearance may be backdated to March seventh, two thousand
twenty, provided that the maximum length of the forbearance may be no
longer than one hundred eighty days and any extension thereof pursuant
to this section.

3. Notwithstanding any other provision of law, any mortgage
forbearance granted by a regulated institution pursuant to executive
order number 202.9 of two thousand twenty, this section, or 3 NYCRR Part
119 to a qualified mortgagor as a result of financial hardship shall be
subject to the following provisions:

(a) the mortgagor shall have the option to extend the term of the loan
for the length of the period of forbearance. The regulated institution
shall not charge additional interest or any late fees or penalties on
the forborne payment; or

(b) the mortgagor shall have the option to have the arrears
accumulated during the forbearance period payable on a monthly basis for
the remaining term of the loan without being subject to penalties or
late fees incurred as a result of the forbearance; or

(c) the mortgagor shall have the option to negotiate a loan
modification or any other option that meets the changed circumstances of
the qualified mortgagor; or

(d) if the mortgagor and regulated institution cannot reasonably agree
on a mutually acceptable loan modification, the regulated institution
shall offer to defer arrears accumulated during the forbearance period
as a non-interest bearing balloon loan payable at the maturity of the
loan, or at the time the loan is satisfied through a refinance or sale
of the property. Any late fees accumulated as a result of the
forbearance shall be waived.

(e) The exercising of options provided for in paragraph (a), (b), (c)
or (d) of this subdivision by a qualified mortgagor shall not be
reported negatively to any credit bureau by any regulated institution.

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
defendant'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, purchased or securitized by any agency or instrumentality of
the United States, any government sponsored enterprise, or a federal
home loan bank, or a corporate governmental agency of the state
constituted as a political subdivision and public benefit corporation,
or the rights and obligations of any lender, issuer, servicer or trustee
of such obligations, including servicers for the Government National
Mortgage Association.

6. Notwithstanding any other provision of law or of this section, the
obligation to grant the forbearance relief required by this section
shall be subject to the regulated institution having sufficient capital
and liquidity to meet its obligations and to operate in a safe and sound
manner. Any regulated institution that determines that it is not able to
offer relief pursuant to this section to any qualified mortgagor must
notify the department within five business days of making such
determination. Any such notice filed with the department shall include
information about the qualified mortgagor, the reason the regulated
institution determined that it was unable to offer any relief pursuant
to this section, information about the regulated institution's financial
condition supporting the regulated institution's determination, and any
other information required by the department. At the same time that the
regulated institution provides notice to the department, it shall advise
the qualified mortgagor that the application for relief was denied and
provide a statement that the applicant may file a complaint with the New
York state department of financial services at 1-800-342-3736 or
http://www.dfs.ny.gov if the applicant believes the application was
wrongly denied.

* NB There are 2 § 9-x's