Bill Text: NY A10876 | 2019-2020 | General Assembly | Introduced


Bill Title: Relates to authorizing commercial mortgage forbearance during the COVID-19 pandemic; requires New York regulated institutions to make applications for forbearance available to qualified commercial mortgagors and to grant such forbearance for a period of ninety days, subject to the safety and soundness requirements of the regulated institution.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2020-07-24 - referred to banks [A10876 Detail]

Download: New_York-2019-A10876-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          10876

                   IN ASSEMBLY

                                      July 24, 2020
                                       ___________

        Introduced by COMMITTEE ON RULES -- (at request of M. of A. Jean-Pierre)
          -- read once and referred to the Committee on Banks

        AN  ACT  to amend the banking law, in relation to authorizing commercial
          mortgage forbearance during the COVID-19 pandemic

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  The banking law is amended by adding a new section 9-y to
     2  read as follows:
     3    § 9-y. Mortgage forbearance. 1. As used in this section, the following
     4  terms shall have the following meanings:
     5    (a) "covered period" means March seventh, two  thousand  twenty  until
     6  the  date  on  which  none  of  the  provisions that closed or otherwise
     7  restricted public or private businesses or  places  of  public  accommo-
     8  dation,  or  required  postponement or cancellation of all non-essential
     9  gatherings of individuals of any size for any reason in executive  order
    10  numbers 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10, 202.11, 202.13
    11  or 202.14 of two thousand twenty, as extended by executive order numbers
    12  202.28 and 202.31 and as further extended by any future executive order,
    13  issued  in  response  to  the COVID-19 pandemic continue to apply in the
    14  county in which the property encumbered by the mortgage in  question  is
    15  located; and
    16    (b)  "regulated  institution"  means  any  New  York regulated banking
    17  organization as defined under this chapter and any  New  York  regulated
    18  mortgage servicer entity subject to the authority of the department.
    19    2.  Notwithstanding  any  other  provision  of law, New York regulated
    20  institutions shall:
    21    (a) make applications for forbearance of any payment due on a  commer-
    22  cial  mortgage of a property located in New York widely available to any
    23  qualified commercial  mortgagor  including  those  who  are  already  in
    24  arrears  or  on  a  trial period plan or who have applied for loss miti-
    25  gation and who demonstrate financial hardship during the covered period;
    26  and

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD16436-04-0

        A. 10876                            2

     1    (b) grant such forbearance for a period of one hundred twenty days  to
     2  any  such  qualified  commercial  mortgagor,  subject  to the safety and
     3  soundness requirements of the regulated institution.
     4    (c)  such  forbearance may be backdated to March seventh, two thousand
     5  twenty.
     6    3. Notwithstanding any other provision of law, any  mortgage  forbear-
     7  ance granted by a regulated institution pursuant to this section, or any
     8  other  law, rule or regulation, to the qualified commercial mortgagor as
     9  a result of financial  hardship  during  the  covered  period  shall  be
    10  subject to the following provisions:
    11    (a)  the  regulated institution shall defer arrears accumulated during
    12  the forbearance period as a non-interest bearing balloon payment payable
    13  twelve months after the end of the forbearance period  and  shall  waive
    14  any late fees accumulated as a result of the forbearance; and
    15    (b)  the  total value of the deferred mortgage payment shall be appor-
    16  tioned each month to each tenant according  to  the  percentage  of  the
    17  total rents due that their rental obligation represents on the mortgaged
    18  property  in  receipt  of  the forbearance. Each commercial tenant shall
    19  have their pro rata share of the forborne mortgage payment  be  deferred
    20  each  month  for  the  duration of the forbearance period. Such deferred
    21  rent shall be due within twelve months after the end of the  forbearance
    22  period,  and  shall  not accumulate interest or be subject to late fees;
    23  and
    24    (c) no eviction proceedings may be commenced or continued against  any
    25  residential  or  commercial tenant for nonpayment of rents that came due
    26  during the forbearance period.
    27    4. Notwithstanding any other provision of  law,  adherence  with  this
    28  section  shall  be  a  condition  precedent  to commencing a foreclosure
    29  action stemming from missed payments which  would  have  otherwise  been
    30  subject  to  this  section.  A defendant may raise the violation of this
    31  section as a defense to a foreclosure action commenced  on  the  defend-
    32  ant's  property  when such action is based on missed payments that would
    33  have otherwise been subject to this section.
    34    5. Notwithstanding anything to the  contrary  in  this  section,  this
    35  section shall not apply to, and does not affect any mortgage loans made,
    36  insured,  or  securitized by any agency or instrumentality of the United
    37  States, any government sponsored enterprise,  or  a  federal  home  loan
    38  bank,  or  the rights and obligations of any lender, issuer, servicer or
    39  trustee of such obligations,  including  servicers  for  the  Government
    40  National Mortgage Association.
    41    § 2. This act shall take effect immediately.
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