N.Y. Banking Law § 9-x: Mortgage forbearance

* § 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