§ 9-X — Mortgage forbearance

* § 9-x. Mortgage forbearance. 1. As used in this section, the\nfollowing terms shall have the following meanings:\n (a) "Covered period" means March 7, 2020 until the later of December\n31, 2021 or the date on which none of the provisions that closed or\notherwise restricted public or private businesses or places of public\naccommodation, or required postponement or cancellation of all\nnon-essential gatherings of individuals of any size for any reason in\nExecutive Orders 202.3, 202.4, 202.5, 202.6, 202.7, 202.8, 202.10,\n202.11, 202.13 or 202.14, as extended by Executive Orders 202.28 and\n202.31 and as further extended by any future Executive Order, issued in\nresponse to the COVID-19 pandemic continue to apply in the county of the\nqualified mortgagor's residence;\n (b) "qualified mortgagor" means an individual (i) whose primary\nresidence is located in New York and is encumbered by a home loan\npursuant to paragraph (a) of subdivision six of section thirteen hundred\nfour of the real property actions and proceedings law or whose primary\nresidence is located in New York and is a co-operative unit whose shares\nare encumbered by any loan otherwise meeting the requirements of a home\nloan under paragraph (a) of subdivision six of section thirteen hundred\nfour of the real property actions and proceedings law, from or serviced\nby a regulated institution; and (ii) who demonstrates financial hardship\nas a result of COVID-19 during the covered period;\n (c) "regulated institution" means any New York regulated banking\norganization as defined in this chapter and any New York regulated\nmortgage servicer entity subject to supervision by the department; and\n (d) "trial period plan" means an agreement whereby the mortgagor is\nrequired to make trial payments in full and on-time in order to be\nconsidered for a permanent loan modification.\n 2. Notwithstanding any other provision of law, New York regulated\ninstitutions shall:\n (a) make applications for forbearance of any payment due on a\nresidential mortgage of a property located in New York widely available\nto any qualified mortgagor who, during the covered period, is in arrears\nor on a trial period plan, or who has applied for loss mitigation; and\n (b) grant such forbearance of all monthly payments due with respect to\nthe mortgage secured by the qualified mortgagor's primary residence in\nNew York for a period of up to one hundred eighty days to any such\nqualified mortgagor, with the option to extend the forbearance of such\nmonthly payments for up to an additional one hundred eighty days\nprovided that this extension is subject to the mortgagor demonstrating\ncontinued financial hardship. If any qualified mortgagor has already\nreceived a forbearance pursuant to executive order 202.9 of two thousand\ntwenty, the time of such forbearance shall be considered as part of the\nrequirement of this section to provide a forbearance of up to one\nhundred eighty days, and any extension thereof pursuant to this section.\n (c) Such forbearance may be backdated to March seventh, two thousand\ntwenty, provided that the maximum length of the forbearance may be no\nlonger than one hundred eighty days and any extension thereof pursuant\nto this section.\n 3. Notwithstanding any other provision of law, any mortgage\nforbearance granted by a regulated institution pursuant to executive\norder number 202.9 of two thousand twenty, this section, or 3 NYCRR Part\n119 to a qualified mortgagor as a result of financial hardship shall be\nsubject to the following provisions:\n (a) the mortgagor shall have the option to extend the term of the loan\nfor the length of the period of forbearance. The regulated institution\nshall not charge additional interest or any late fees or penalties on\nthe forborne payment; or\n (b) the mortgagor shall have the option to have the arrears\naccumulated during the forbearance period payable on a monthly basis for\nthe remaining term of the loan without being subject to penalties or\nlate fees incurred as a result of the forbearance; or\n (c) the mortgagor shall have the option to negotiate a loan\nmodification or any other option that meets the changed circumstances of\nthe qualified mortgagor; or\n (d) if the mortgagor and regulated institution cannot reasonably agree\non a mutually acceptable loan modification, the regulated institution\nshall offer to defer arrears accumulated during the forbearance period\nas a non-interest bearing balloon loan payable at the maturity of the\nloan, or at the time the loan is satisfied through a refinance or sale\nof the property. Any late fees accumulated as a result of the\nforbearance shall be waived.\n (e) The exercising of options provided for in paragraph (a), (b), (c)\nor (d) of this subdivision by a qualified mortgagor shall not be\nreported negatively to any credit bureau by any regulated institution.\n 4. Notwithstanding any other provision of law, adherence with this\nsection shall be a condition precedent to commencing a foreclosure\naction stemming from missed payments which would have otherwise been\nsubject to this section. A defendant may raise the violation of this\nsection as a defense to a foreclosure action commenced on the\ndefendant's property when such action is based on missed payments that\nwould have otherwise been subject to this section.\n 5. Notwithstanding anything to the contrary in this section, this\nsection shall not apply to, and does not affect any mortgage loans made,\ninsured, purchased or securitized by any agency or instrumentality of\nthe United States, any government sponsored enterprise, or a federal\nhome loan bank, or a corporate governmental agency of the state\nconstituted as a political subdivision and public benefit corporation,\nor the rights and obligations of any lender, issuer, servicer or trustee\nof such obligations, including servicers for the Government National\nMortgage Association.\n 6. Notwithstanding any other provision of law or of this section, the\nobligation to grant the forbearance relief required by this section\nshall be subject to the regulated institution having sufficient capital\nand liquidity to meet its obligations and to operate in a safe and sound\nmanner. Any regulated institution that determines that it is not able to\noffer relief pursuant to this section to any qualified mortgagor must\nnotify the department within five business days of making such\ndetermination. Any such notice filed with the department shall include\ninformation about the qualified mortgagor, the reason the regulated\ninstitution determined that it was unable to offer any relief pursuant\nto this section, information about the regulated institution's financial\ncondition supporting the regulated institution's determination, and any\nother information required by the department. At the same time that the\nregulated institution provides notice to the department, it shall advise\nthe qualified mortgagor that the application for relief was denied and\nprovide a statement that the applicant may file a complaint with the New\nYork state department of financial services at 1-800-342-3736 or\nhttp://www.dfs.ny.gov if the applicant believes the application was\nwrongly denied.\n * NB There are 2 § 9-x's\n