On March 24, pursuant to Governor Cuomo’s Executive Order 202.9, the New York State Department of Financial Services (“DFS”) promulgated emergency regulations to provide financial relief to New Yorkers who can demonstrate financial hardship due to the novel coronavirus (“COVID-19”). The emergency regulations add part 119 to 3 NYCRR. These regulations are not applicable to and do not affect any mortgage loans made, insured, or securitized by any agency of the United States, any Government Sponsored Enterprise, or a Federal Home Loan Bank. These regulations also do not apply to commercial loans. A “regulated institution” is defined under the new regulations as any “New York regulated banking organization as defined under New York Banking Law and any New York regulated mortgage servicer entity subject to the authority of the NYS Department of Financial Services.” You can find out who DFS supervises by following this link: https://www.dfs.ny.gov/who_we_supervise.
The following relief must be granted if an individual can demonstrate financial hardship due to COVID-19:
Further, regulated institutions are required to make applications for forbearance of any payment due on a residential mortgage of a property located in New York widely available to any individual residing in New York and who demonstrates financial hardship as a result of COVID-19. If such individual can demonstrate financial hardship as a result of COVID-19, regulated institutions are required to grant forbearance for a period of 90 days, subject to the safety and soundness requirements of the regulated institution.
Regulated institutions must do the following:
Finally, in assessing whether a regulated institution has engaged in an unsafe and unsound practice by denying an application, DFS will consider the following:
Attorneys in our Business, Corporate & Banking Department at Lacy Katzen LLP are continuing to monitor the Governor’s executive orders, emergency regulations, and guidance from the DFS related to COVID-19 in order to provide our business and banking clients with the most up-to-date information. Please give us a call if you have any questions.