CoronavirusMortgage

New York will let some residents skip 3 months of mortgage payments as coronavirus spreads

Also directs mortgage servicers to postpone or suspend foreclosures

The Department of Housing and Urban Development, Fannie Mae, and Freddie Mac announced Wednesday that they are suspending foreclosures and evictions for at least 60 days to keep people in their homes the coronavirus spreads.

But the state of New York is taking its relief efforts several steps further, including letting certain residents skip their mortgage payments for 90 days.

New York Gov. Andrew Cuomo announced Thursday that the state is enacting a 90-day mortgage relief period for the state’s homeowners.

According to Cuomo’s office, the New York Department of Financial Services is directing mortgage servicers that several options will be made available to the state’s residents, including postponing or suspending foreclosures for 90 days.

Other measures include:

  • Waiving mortgage payments based on financial hardship
  • No negative reporting to credit bureaus
  • Grace period for loan modification
  • No late payment fees or online payment fees
  • Postponing or suspending foreclosures

In conjunction with Cuomo’s announcement, the NYDFS is sending a letter to the mortgage servicers that operate in the state, which provides more details on the state’s new policies.

“An increasing number of individuals are experiencing sizeable disruption to their everyday lives,” the NYDFS said in its letter to servicers. “The economic impact to consumers is considerable and the outbreak will continue to cause significant financial hardship for individuals and families, especially workers who cannot work remotely and do not have access to paid leave.”

According to the letter, borrowers who “demonstrate they are not able to make timely payments” due to the impact of the virus will be eligible for numerous options to help keep them in homes, including:

  • Forbearing mortgage payments for 90 days from their due dates
  • Refraining from reporting late payments to credit rating agencies for 90 days
  • Offering mortgagors an additional 90-day grace period to complete trial loan modifications, and ensuring that late payments during the COVID-19 pandemic does not affect their ability to obtain permanent loan modifications
  • Waiving late payment fees and any online payment fees for a period of 90 days
  • Postponing foreclosures and evictions for 90 days

The NYDFS also directs servicers to proactively contact borrowers to communicate the new relief options.

“The Department believes that reasonable and prudent efforts by your institutions during this outbreak to assist these mortgagors under these unusual and extreme circumstances are consistent with safe and sound banking practices as well as in the public interest and will not be subject to examiner criticism,” the NYDFS said.

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