2023 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