Greenspoon Marder Financial Services Update – State of New York
New York Governor Issues Executive Order 202.48
On July 6, 2020, New York Governor Andrew Cuomo issued Executive Order_202.48 with corresponding statutory references. Executive Order 202.48 releases the prohibition of proceeding with a residential foreclosure as set forth in Executive Order 202.28. Executive Order 202.48 permits commencement and enforcement of Residential foreclosure matters as long as there is compliance with the requirements of Chapters 112 , 126 and 127 of the Laws of 2020. Some of the highlights of Chapter 112 are set forth below:
Effective March 7, 2020, any qualified mortgager, residing in New York as a primary resident, who applied for loss mitigation or demonstrated hardship, is permitted to a forbearance of 180 days, with the option to extend an additional 180 days. This will apply to any Borrower with arrears or on a trial payment plan. The forbearance maybe backdated to March 7, 2020.
Borrowers shall be provided with the following options: (i) Borrower can extend the term of the loan for the length of the forbearance, (ii) pay the arrears accumulated during the forbearance period payable on a monthly basis for the remaining term of the loan or (iii) make a balloon payment. Interest and late fees cannot be tacked on to any of the options. Also, the exercise of these options cannot be reported negatively to any credit bureau by any regulated institution.
Borrowers who received an extension pursuant to Executive Order 202.9 (effective March 21, 2020 which required lenders to give a ninety (90) day forbearance) can only receive an additional ninety (90) days, totaling the 180 day forbearance period.
Adherence to this section is a condition precedent to commencing a foreclosure action stemming from missed payments which would have otherwise been subject to this section.
The above requirements do not apply to loans made, insured or securitized by any agency or instrumentality of the United States, any government sponsored enterprise, or a federal home loan bank.
Chapter 126 provides that in the event a Lender cannot afford to approve a forbearance, the Lender must notify the department within five (5) business days of making the determination.
In addition, on July 7, 2020, Administrative Order 143/20 amended AO 131/20 (dated June 23, 2020) and terminated the requirement to serve an Attorney Affirmation with a foreclosure complaint or any foreclosure proceeding. Pursuant to Administrative Order 143/20:
New foreclosure complaints must still be served with a notice to Borrowers/Tenants, informing them that there is an extension of time to respond to the Complaint.
Settlement Conferences may be scheduled where both parties are represented by Counsel.
Judgement of Foreclosure and Sale may be filed if the property is deemed vacant and abandoned. Courts are not permitting any other substantive motions at this time.
Foreclosure auctions are still suspended.
Discontinuance pleadings may be filed.
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