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S08243 Summary:

S08243 Actions:

S08243 Committee Votes:

S08243 Floor Votes:

S08243 Text:

 
                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.
                                                                   LBD16167-12-0
        S. 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  United
        S. 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.