New York Passes Legislation to Extend COVID Hardship Declaration Moratorium on Residential Foreclosure and Eviction Proceedings

by Adam Gross, Partner
Gross & Polowy, LLC
The Hardship Declaration requirements of the New York COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020, scheduled to expire on August 31, 2021, were extended by the legislature until at least January 15, 2022.  Click HERE for a complete copy of the legislation.   

Additional language was added to the foreclosure Hardship Declaration as of September 2, 2021.  Hardship Declarations included with the 90 day notice sent in after September 2, 2021 must include the additional language.  Click HERE for copy of the new Hardship Declaration for foreclosure and HERE for a copy of the Hardship Declaration for Eviction. The additional language is highlighted in yellow.

The legislation adds three new provisions that allow a Plaintiff to challenge the claimed hardship.  These additions were added to meet the requirements of an August 12, 2021 U.S. Supreme Court Ruling that found that the eviction Hardship Declaration “scheme violates the court’s longstanding teaching that ordinarily ‘no man can be a judge in his own case’ consistent with the Due Process Clause.”  The Hardship Declaration includes notice that the Plaintiff can challenge the declaration of hardship. New foreclosures and residential evictions can be filed even if a Hardship Declaration was returned by the mortgagor if an affidavit is provided that states that “… the foreclosing party believes in good faith that the hardship certified in the hardship declaration does not exist.”  In pending cases the Plaintiff can challenge the Hardship Declaration by making a motion asking the court to hold a hearing to determine whether the defendant’s hardship claim is invalid.  The Plaintiff must have a good faith belief that the defendant has not experienced a hardship to make this motion.

The remainder of the foreclosure related requirements of the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 were not changed.

Click HERE to read the NY Senate Press Release.

More information on the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 and the foreign language translations of the Hardship Declaration, when updated by the Office of Court Administration, are located on the NY Court’s website at:

https://www.nycourts.gov/covid-eefpa.shtml
https://www.nycourts.gov/eefpa/

Governor Signs Eviction/Foreclosure Moratorium Bill

A bill drafted and introduced by the NYS legislature on December 24, 2020 (A.11181/S.9114) that would prevent evictions and eviction proceedings against residential tenants and prevent foreclosure actions against homeowners and certain small landlords experiencing financial or health-related hardships due to coronavirus until May 1, 2021, was passed in a special session on December 28th and signed by the Governor that evening and is effective immediately.

Under the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020, tenants and homeowners must make "hardship declarations," subject to penalty of perjury,  to their landlord (tenants) and lienholder (homeowners) of their inability to pay their housing expense.  The bill stays residential foreclosure proceedings for sixty days, and allows borrowers who own ten or fewer residential dwellings, including their primary residence, who are experiencing financial hardship to file a hardship declaration with the mortgage lender, other foreclosing party or the court that will prevent the filing and proceedings on a foreclosure action until May 1, 2021. 

Governor Cuomo's Press Release, 12/28/2020
Bill A.11181/S.9114. 12/24/2020

FHFA Extends COVID-Related Loan Processing Flexibilities for Fannie Mae and Freddie Mac Customers

The Federal Housing Finance Agency (FHFA) is extending several loan origination flexibilities currently offered by Fannie Mae and Freddie Mac (the Enterprises) designed to help borrowers during the COVID-19 national emergency. Flexibilities have subsequeently been extended until March 31, 2021:

  • Alternative appraisals on purchase and rate term refinance loans;
  • Alternative methods for verifying employment before loan closing;
  • Expanding the use of power of attorney and remote online notarizations to assist with loan closings; and
  • Authority to purchase mortgages in forbearance.
 

FHA Extends Remote Work Flexibilities for Lenders and Appraisers

In addition to to issuing an extension of FHA’s foreclosure and eviction moratorium for single family homeowners, FHA also announced an extension for remote work flexibilities.

Extensions Through June Provide Peace of Mind to Struggling Homeowners While Supporting New Mortgage
Originations During COVID-19 Recovery

WASHINGTON -5/14/2020  The Federal Housing Administration (FHA) announced an extension of its foreclosure and eviction moratorium through June 30, 2020, for homeowners with FHA-insured Single Family mortgages, while also supporting new FHA-insured mortgage originations through an extension of temporary policy flexibilities for lenders and appraisers. The extensions will support the President’s economic recovery efforts as the Nation continues to work to defeat the COVID-19 invisible enemy.

FHA’s Single Family foreclosure and eviction moratorium extension announced today applies to homeowners with FHA-insured Title II Single Family forward and Home Equity Conversion (reverse) mortgages, and directs mortgage servicers to:

  • Halt all new foreclosure actions and suspend all foreclosure actions currently in process, excluding legally vacant or abandoned properties; and
  • Cease all evictions of persons from FHA-insured Single Family properties, excluding actions to evict occupants of legally vacant or abandoned properties.

Additionally, the Single Family mortgage origination policy extensions announced today allow alternatives for lenders to re-verify a borrower’s employment, and for appraisers to conduct desktop or exterior-only appraisals, to continue through June 30, 2020. These temporary measures allow lenders and appraisers to continue their necessary work for new FHA-insured mortgages in light of social distancing requirements.

“We made it clear at the beginning of this pandemic that no American should have to worry about losing their home amidst a crisis. Today’s announcement ensures that commitment,” said U.S. Department of Housing and Urban Development Secretary Ben Carson. “While we have made great strides in fighting this virus, the fact remains that many Americans are still struggling as we work diligently to get our economy back on sound footing, which I have full confidence we will do through the leadership of the President.”

“For those among the over 8.1 million single family homeowners with FHA-insured mortgages who need assistance, our highest priority is to ensure that they have the time through the foreclosure moratorium, and the assistance they need through special COVID-19 mortgage forbearance, to remain in their homes long-term,” said HUD Deputy Secretary and Federal Housing Commissioner Brian Montgomery. “At the same time, extending our policy flexibilities will ensure that affordable FHA-insured mortgage financing continues to remain available to support first-time and other homebuyers, and the Nation’s housing market.”

Homeowners with FHA-insured mortgages must continue to make their mortgage payments during the foreclosure and eviction moratorium if they are able to do so, or seek mortgage payment forbearance pursuant to the CARES Act from their mortgage servicer, to avoid future foreclosure actions when the moratorium expires.

Pursuant to the CARES Act, FHA requires mortgage servicers to:

  • Offer borrowers with FHA-insured mortgages up to six months or more of delayed mortgage payment forbearance when the borrower requests it. FHA does not require a lump sum payment at the end of the forbearance period.
  • Assess borrowers who receive COVID-19 forbearance for its special COVID-19 National Emergency Standalone Partial Claim before the end of the forbearance period. The COVID-19 National Emergency Standalone Partial Claim puts all deferred mortgage payment amounts owed into a junior lien which is only repaid when the borrower sells the home, refinances the mortgage, or the mortgage is otherwise extinguished.

FHA Press Release 5/14/2020

Foreclosure Prevention & Refinance Report Released

The Foreclosure Prevention & Refinance Report and Federal Property Manager’s Report as of February 2020 has been posted.  This report quantifies the number of foreclosure prevention actions taken by Fannie Mae & Freddie Mac, the Enterprises, year-to-date and cumulative since the beginning of the conservatorships in September 2008.

Issued by FHFA 5/14/2020
Foreclosure Prevention, Refinance and FPM Report – February 2020

April New Home Purchase Mortgage Applications Decreased 12 Percent

WASHINGTON, D.C. (May 14, 2020) — The Mortgage Bankers Association (MBA) Builder Application Survey (BAS) data for April 2020 shows mortgage applications for new home purchases decreased 12 percent compared from a year ago. Compared to March 2020, applications decreased by 25 percent. This change does not include any adjustment for typical seasonal patterns.

“New home purchase applications severely weakened in April, which coincided with the peak of the social distancing efforts and restrictions on non-essential activities to help slow the spread of COVID-19. During what’s typically the prime home buying season, activity fell 25 percent from March and decreased 12 percent from a year ago,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “MBA estimates that new home sales dropped to an annualized pace of 533,000 units – the slowest since December 2016. This decline was in line with data from our Weekly Applications Survey, which indicated a pullback in March and most of April.”

Added Kan, “There’s evidence now that unrealized, pent-up demand is being released as states start to reopen. We expect that heading into the summer, more prospective homebuyers will gradually return to the market.”

Source: Adam DeSanctis
Mortgage Bankers Association
adesanctis@mba.org
(202) 557-2727

DFS listens to New York MBA

Peter Dean, Executive Deputy Superintendent and Rholda Rickets, Deputy Superintendent of New York State Department of Financial Services met with New York MBA Executive Board members regarding Federal legislation mandating Temporary Authority for Loan Officers; the new state regulation mandating Credit Reporting Agency Registry and proposed Online Notarization.

DFS meeting 7.19.2018

FHA Lender Roundtable

July 19, 2018:  Philadelphia Homeownership Center of U.S. Dept. of HUD came to New York to listen to lenders, provide updates, and share ideas to benefit FHA borrowers, homeowners and lenders.

FHA Jim & Julie 7.19.2018

Julie Shaffer, Director HUD’s Philadephia HOC
and James Bopp, New York MBA President.

FHA Steven & Jacki 7.19-2018

FHA Group Pic 7.19.2018

 

AMC Licensing moves forward

Senate and Assembly approve State AMC Licensing Bill–Awaiting Governor Cuomo’s signature

June 21, 2018:  Both branches of the NYS Legislature approved the long sought after AMC licensing bill, as required by Dodd-Frank.  When approved, all 50 states will be compliant by having passed legislation that establishes guidelines  for  Appraisal Management Companies, a federal mandate effective August 2018.

Federal Regulatory Relief Legislation a Reality

May 24, 2018:  President Trump signed S.2155, the Economic Growth, Regulatory Relief and Consumer Protection Act.  The full House passed the bill earlier in the week by a vote of 258-159. This legislation is unchanged from that which passed the Senate in March by a filibuster-proof bipartisan margin of 67-31. This legislation contains a number of MBA-supported provisions, such as:

  • SAFE Act amendments to provide 120 days of transitional authority for MLOs to originate when leaving a depository to join a sponsoring non-bank (or when crossing state lines);
  • Applying TILA consumer protections to PACE/energy efficiency mortgage products;
  • Added safeguards to protect veterans, surviving spouses and service members who utilize the VA Home Loan program’s IRRRL refinancing product;
  • An improved, more workable regulatory regime for the eligibility of High Volatility Commercial Real Estate (HVCRE) construction loans; and,
  • Partial TRID and HMDA relief

Source: MBA

Thank you to those who took action on these important issues!  Your advocacy makes a difference.