NY Banking L § 9-X (2021)
2021 New York Laws BNK - Banking Article 1 - Short Title; Definitions; Miscellaneous Provisions. 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