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

Mortgage & Real Estate

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 hardshipNo negative reporting to credit bureausGrace period for loan modificationNo late payment fees or online payment feesPostponing or suspending foreclosuresIn 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 datesRefraining from reporting late payments to credit rating agencies for 90 daysOffering 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 modificationsWaiving late payment fees and any online payment fees for a period of 90 daysPostponing foreclosures and evictions for 90 daysThe 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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