Bill Text: NY S08243 | 2019-2020 | General Assembly | Amended
Bill Title: Relates to the forbearance of residential mortgage payments; requires New York regulated banking organizations to make applications for forbearance for residential mortgages available to qualified mortgagors during the period in which the NY on PAUSE order is in effect in the county wherein the qualified mortgagor is located and to grant such applications for a period of 180 days.
Spectrum: Partisan Bill (Democrat 20-1)
Status: (Passed) 2020-06-17 - SIGNED CHAP.112 [S08243 Detail]
Download: New_York-2019-S08243-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 8243--C IN SENATE April 27, 2020 ___________ Introduced by Sens. KAVANAGH, KAMINSKY, ADDABBO, GIANARIS, GOUNARDES, HOYLMAN, KENNEDY, LITTLE, MARTINEZ, METZGER, SAVINO, SKOUFIS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the banking law, in relation to the forbearance of resi- dential mortgage payments 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-x to 2 read as follows: 3 § 9-x. Mortgage forbearance. 1. As used in this section, the following 4 terms shall have the following meanings: 5 (a) "Covered period" means March 7, 2020 until the date on which none 6 of the provisions that closed or otherwise restricted public or private 7 businesses or places of public accommodation, or required postponement 8 or cancellation of all non-essential gatherings of individuals of any 9 size for any reason in Executive Orders 202.3, 202.4, 202.5, 202.6, 10 202.7, 202.8, 202.10, 202.11, 202.13 or 202.14, as extended by Executive 11 Orders 202.28 and 202.31 and as further extended by any future Executive 12 Order, issued in response to the COVID-19 pandemic continue to apply in 13 the county of the qualified mortgagor's residence; 14 (b) "qualified mortgagor" means an individual who resides in New York 15 whose principal dwelling is encumbered by a home loan pursuant to para- 16 graph (a) of subdivision six of section thirteen hundred four of the 17 real property actions and proceedings law or whose principal dwelling is 18 a co-operative unit whose shares are encumbered by any loan otherwise 19 meeting the requirements of a home loan under paragraph (a) of subdivi- 20 sion six of section thirteen hundred four of the real property actions 21 and proceedings law, from or serviced by a regulated institution; EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD16167-12-0S. 8243--C 2 1 (c) "regulated institution" means any New York regulated banking 2 organization as defined in this chapter and any New York regulated mort- 3 gage servicer entity subject to supervision by the department; and 4 (d) "trial period plan" means an agreement whereby the mortgagor is 5 required to make trial payments in full and on-time in order to be 6 considered for a permanent loan modification. 7 2. Notwithstanding any other provision of law, New York regulated 8 institutions shall: 9 (a) make applications for forbearance of any payment due on a residen- 10 tial mortgage of a property located in New York widely available to any 11 qualified mortgagor who, during the covered period, is in arrears or on 12 a trial period plan, or who has applied for loss mitigation and demon- 13 strates financial hardship during the covered period; and 14 (b) grant such forbearance for a period of one hundred eighty days to 15 any such qualified mortgagor who is in arrears or on a trial period 16 plan, or who has applied for loss mitigation and demonstrates financial 17 hardship, with the option to extend an additional one hundred eighty 18 days. 19 (c) Such forbearance may be backdated to March seventh, two thousand 20 twenty. 21 3. Notwithstanding any other provision of law, any mortgage forbear- 22 ance granted by a regulated institution pursuant to executive order 23 number 202.9 of two thousand twenty, this section, or any other law, 24 rule or regulation to the qualified mortgagor as a result of financial 25 hardship during the covered period shall be subject to the following 26 provisions: 27 (a) the mortgagor shall have the option to extend the term of the loan 28 for the length of the period of forbearance. The regulated institution 29 shall waive interest on the principal for the term of the forbearance 30 and waive any late fees accumulated as a result of the forbearance; or 31 (b) the mortgagor shall have the option to have the arrears accumu- 32 lated during the forbearance period payable on a monthly basis for the 33 remaining term of the loan without being subject to penalties or late 34 fees incurred as a result of the forbearance; or 35 (c) if the mortgagor is unable to make mortgage payments due to mort- 36 gagors' demonstrated hardship and the mortgagor and regulated institu- 37 tion cannot agree on a mutually acceptable loan modification, the mort- 38 gagor shall have the option to defer arrears accumulated during the 39 forbearance period as a non-interest bearing balloon payment payable at 40 the maturity of the loan consistent with the safety and soundness of 41 such regulated institution, or at the time the loan is satisfied through 42 a refinance or sale of the property. Any late fees accumulated as a 43 result of the forbearance shall be waived. 44 (d) The exercising of options provided for in paragraph (a), (b) or 45 (c) of this subdivision by a qualified mortgagor shall not be reported 46 negatively to any credit bureau by any regulated institution. 47 4. Notwithstanding any other provision of law, adherence with this 48 section shall be a condition precedent to commencing a foreclosure 49 action stemming from missed payments which would have otherwise been 50 subject to this section. A defendant may raise the violation of this 51 section as a defense to a foreclosure action commenced on the defend- 52 ant's property when such action is based on missed payments that would 53 have otherwise been subject to this section. 54 5. Notwithstanding anything to the contrary in this section, this 55 section shall not apply to, and does not affect any mortgage loans made, 56 insured, or securitized by any agency or instrumentality of the UnitedS. 8243--C 3 1 States, any government sponsored enterprise, or a federal home loan 2 bank, or the rights and obligations of any lender, issuer, servicer or 3 trustee of such obligations, including servicers for the Government 4 National Mortgage Association. 5 § 2. This act shall take effect immediately.