BILL NUMBER: S5528
SPONSOR: SANDERS
TITLE OF BILL:
An act authorizing certain state regulated institutions to offer disas-
ter forbearance agreements to qualified mortgagors
PURPOSE OR GENERAL IDEA OF BILL:
This bill would provide relief to mortgagors (homeowners, etc.) by
authorizing certain state regulated institutions to automatically offer
disaster forbearance agreements to qualified mortgagors.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1:
1. Definitions. "Disaster forbearance agreements" means a deferment of
all mortgage arrears including escrow advances to the back end of the
loan interest free or extend the term of the loan to reduce the borrow-
er's mortgage payments. qualified mortgagor are those residential or
commercial borrowers whose loan became delinquent 60 days or more as
result of novel coronavirus, COVID-19,
2. Every regulated institution is authorized to automatically offer
disaster forbearance agreements to qualified mortgagors. The borrower
can extend the forbearance up to 12 months orally or in writing and is
not required to submit any documentation,
3. Prohibits lenders/servicers from reporting any derogatory comments to
the credit agencies during the forbearance period.
Section 2 sets the effective date
JUSTIFICATION:
The federal government and New York State have declared emergencies over
the coronavirus (COVID-19) pandemic. This bill would authorize certain
state regulated institutions to automatically offer disaster forbearance
agreement to qualified mortgagors to provide relief to mortgagors who
cannot make a mortgage payment due to the COVID-19 pandemic.
This bill was amended to mirror the language contained in the Health and
Economic Recovery Omnibus Emergencies Solutions (HEROES) act, Division
K, Title II entitled "Protecting Renters and Homeowners from Evictions
and Foreclosures" that was passed by the House of Representatives on May
15, 2020.
PRIOR LEGISLATIVE HISTORY:
New bill
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
This act shall take effect immediately.