Bill Text: NY S05838 | 2023-2024 | General Assembly | Introduced

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Bill Title: Authorizes certain state regulated institutions to offer disaster forbearance agreements to qualified mortgagors whose income has been adversely affected by the outbreak of COVID-19 and is unable to make his or her mortgage payment.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-01-03 - REFERRED TO BANKS [S05838 Detail]

Download: New_York-2023-S05838-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          5838

                               2023-2024 Regular Sessions

                    IN SENATE

                                     March 20, 2023
                                       ___________

        Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
          printed to be committed to the Committee on Banks

        AN ACT authorizing certain state regulated institutions to offer  disas-
          ter forbearance agreements to qualified mortgagors

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

     1    Section 1. 1. As used in this act the following terms shall  have  the
     2  following meanings:
     3    (a)  "Disaster forbearance agreement" means (i) the deferment of total
     4  arrearages, including any escrow advances, to the end  of  the  existing
     5  term  of  the  loan,  without  charging  or collection of any additional
     6  interest on the deferred amount; or (ii) the extension of  the  term  of
     7  the  mortgage  loan,  and capitalization, deferral or forgiveness of all
     8  escrow advances and other  arrearages,  provided  this  loss  mitigation
     9  option  reduces  the  principal  and interest payment on the loan if the
    10  lender or servicer has information indicating that the  borrower  cannot
    11  resume  the  pre-forbearance  mortgage  payments  or  if the borrower is
    12  unable to make the payments under payment subparagraph (i) of this para-
    13  graph.
    14    (b) "Qualified mortgagor" means a residential or  commercial  borrower
    15  whose  mortgage  loan  became delinquent 60 days or more due directly or
    16  indirectly to the COVID-19 emergency or between March 7,  2020  and  the
    17  effective date of this act.
    18    (c)  "Regulated  institution" means any state regulated banking organ-
    19  ization as defined in section 2 of the banking law and any  state  regu-
    20  lated  mortgage  servicer entity subject to the authority of the depart-
    21  ment of financial services.
    22    2. Notwithstanding any provision of law to the contrary,  every  regu-
    23  lated  institution  is  authorized  to  automatically  offer  a disaster
    24  forbearance agreement that begins on the effective date of this act  for
    25  a  period  of  60 days. No documents will be required from the qualified

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD06396-01-3
        S. 5838                             2

     1  mortgagor with respect to a disaster forbearance  agreement  other  than
     2  the  borrower's  affirmation  (oral  or written) to a financial hardship
     3  that prevents the borrower from making timely payments on  the  mortgage
     4  loan due, directly or indirectly, to the COVID-19 emergency.
     5    (a)  A  disaster  forbearance agreement shall be extended for an addi-
     6  tional 120 days upon the borrower's request, oral or written,  submitted
     7  to  the lender or servicer affirming that the borrower is experiencing a
     8  financial hardship that prevents the borrower from  making  payments  on
     9  the mortgage due, directly or indirectly, to the COVID-19 emergency.
    10    (b)  A  forbearance  extended  under paragraph (a) of this subdivision
    11  shall be extended for an additional 180 days not to exceed 360 days upon
    12  the borrower's request, oral or written,  submitted  to  the  lender  or
    13  servicer  affirming  that the borrower is experiencing a financial hard-
    14  ship that prevents the borrower from making  payments  on  the  mortgage
    15  due, directly or indirectly, to the COVID-19 emergency.
    16    3.  Treatment after forbearance. A lender or servicer of such loan (a)
    17  may not charge any late fees, penalties or other charges with respect to
    18  payments on the loan that were due during  the  forbearance  period,  if
    19  such  payments are made timely during the term of the agreement; and (b)
    20  is prohibited from reporting any adverse information to a credit  agency
    21  with  respect  to  any  payments  on  the  loan that were due during the
    22  forbearance period, if such payments are made timely during the term  of
    23  the agreement.
    24    4. The superintendent of financial services shall promulgate any rules
    25  and regulations necessary to implement the provisions of this act.
    26    § 2. This act shall take effect immediately.