On December 28, 2020, Governor Cuomo signed into law the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020, which provides protections for tenants and homeowners experiencing economic hardship due to COVID-19. The New York State Court System, which is implementing the Act, has information on its website, including the downloadable forms that tenants and homeowners must use to obtain eviction and foreclosure protection. The Department of Financial Services webpage below will be updated soon with more information about the Act’s protections for homeowners at risk of foreclosure.
Both New York State and the federal government have passed laws to provide relief to homeowners who are unable to pay their mortgage due to COVID-19.
This page provides information for New York residential mortgage borrowers about the relief available to them. DFS also has FAQs for industry available.
The information here relates to both federally- and state-provided relief, and there are important differences between the two relief programs, so you should contact your servicer to discuss what specific relief options are available to you. New Yorkers can also contact organizations that offer free housing counseling and legal assistance. See the “Where You Can Get Help” section below.
The federal CARES Act provides forbearances (temporary payment suspension) for homeowners with federally-backed mortgages, whereas New York’s Banking Law 9-x provides forbearances for privately-owned, non-federally-backed mortgages serviced by a New York State-regulated company.
You can look up whether you mortgage is federally-backed and covered by the CARES Act on the CFPB website, however you should ultimately contact your servicer to discuss your options, or contact a free housing counselor or attorney for assistance. See the “Where You Can Get Help” section below.
Under both state and federal law, if you are experiencing financial hardship due to COVID-19, you have the right to request a 180-day forbearance. If eligible, you can then receive a forbearance, during which you do not need to make payments. At the end of the forbearance, if you are still experiencing financial hardship, you can request an additional 180-day forbearance.
You must contact your servicer to receive relief. You’ll find their contact information on your most recent bill. Each servicer will have different application procedures for relief, which will involve different standards and criteria. The time period to apply for a forbearance is set by law. Generally speaking, borrowers will have through the end of 2020 to request relief. This website will be updated to reflect any changes in deadlines. The time period to request a forbearance is different than the time period of the forbearance itself, which will depend on the terms of your specific forbearance agreement.
You should confirm the availability of relief with your servicer, as well as the specific criteria involved in the application process.
During your forbearance, additional interest will not accrue on the forborne payments—there will be no “interest on interest." Additionally, your servicer may not charge you a fee or penalty for requesting or receiving a forbearance.
If you believe that your servicer is mistreating you or that you were denied a forbearance on unreasonable grounds, please file a complaint with the Department of Financial Services.
Your repayment options will depend on whether your loan is subject to the CARES Act or New York Banking Law 9-x. You can review the first section above for an explanation of which loans are covered by each law, but ultimately you must discuss repayment with your servicer.
You should contact your servicer well in advance of the end of your forbearance to discuss repayment options, which will vary but may include repayment plans and loan modifications.
If your loan is covered by New York Banking Law 9-x, your servicer must offer you three repayment options: (1) to extend the term of the loan for the length of the forbearance without additional interest or fees, (2) to establish a monthly repayment plan in addition to your regular monthly payments for the remaining term of the loan, or (3) to negotiate a loan modification. These options are provided in an effort to ensure that your mortgage payments are affordable after the forbearance period. Only if a loan modification cannot be agreed upon, the servicer will offer to convert the deferred amount to a non-interest-bearing balloon payment, payable when your loan term ends or upon refinancing or sale. Balloon payments are single lump-sum payments. Loans that are not covered by New York Banking Law 9-x, including those covered by the CARES Act, may offer several ways to repay your forbearance, including loan modifications and deferrals. You should contact your servicer to discuss what options are available to you.
Well in advance of the end of your forbearance, you should contact your loan servicer to ask which law applies to your loan and what forbearance repayment options are available to you.
You can still receive forbearance relief under the CARES Act and New York Banking Law 9-x if you were already behind on your mortgage payments. However, if your loan has been accelerated (your servicer has told you the entire amount is now due) or you are in foreclosure, a forbearance may only be available if you have entered into a modification or other form of repayment plan. If you are unsure whether you are in foreclosure, review the next section and seek legal assistance, which you can find under the “Where you can get help” section, below.
If you are in foreclosure, you should immediately seek legal assistance.
Being in foreclosure means that a lawsuit has been initiated against you in court for nonpayment of your mortgage. You are only in foreclosure if you have been “served” with court papers called a “Summons and Complaint” or you have already appeared in court. These papers may be included with other papers that are handed to you or to someone else at your address, mailed to you, or left at your home, sometimes in a large stack. Be sure to review all papers, and as soon as you receive any papers related to foreclosure, you should seek legal assistance.
New York State courts have begun to process foreclosure cases. Under the CARES Act, even if you are in default, servicers of federally-backed mortgages cannot start a foreclosure lawsuit or, if a case has already been started, they cannot finalize a judgment in court or a sale through at least December 31, 2020.
If you receive any court papers you should immediately seek legal assistance. See the “Where You Can Get Help” section below.
You can still enter a payment plan or modify your loan once you are in foreclosure, and these plans may be eligible for a forbearance.
If your servicer has denied you for relief under Banking Law 9-x, or you are having difficulty working with your servicer, you can file a complaint with the New York Department of Financial Services. The Department can help ensure that you receive whatever relief you are eligible for. If you file a complaint about a servicer that the Department does not regulate, the Department will refer the complaint to the appropriate government office, such as the federal Consumer Financial Protection Bureau.
Contact a Not-for-Profit Housing Counselor.
Housing counselors that handle foreclosure-related issues can give you advice on your options and resources at little or no cost. They may also be able to negotiate with your lender for free and help you find free legal services in your area.
Housing counseling resources for New Yorkers include:
- New York’s Homeowner Protection Program (HOPP), which connects with housing counselors and legal services at no cost. Call the HOPP hotline at (855) 466-3456 or visit homeownerhelpny.com.
- You can find a list of approved non-profit housing counselors by county here, on the DFS website.
- 24-Hour assistance is available toll-free on the HOPE NOW hotline at 888-995-HOPE (888-995-4673). HOPE NOW is an alliance of HUD approved counseling agents, servicers, and investors that provide free assistance.
- If you live in New York City, you can also call 311.
If you are in a foreclosure court case, you should consult an attorney.
Seek Legal Assistance
Contact a lawyer and review your mortgage documents. If you do not have an attorney, you can contact your county’s local bar association to find a referral to an attorney in your area. The New York State Bar Association’s Lawyer Referral and Information Service may also be able to refer you to an appropriate attorney for your situation.
If you cannot afford a private attorney, resources for free or low-cost legal assistance include:
- New York’s Homeowner Protection Program (HOPP), which connects New Yorkers with housing counselors and legal services at no cost. Call the HOPP hotline at (855) 466-3456 or visit homeownerhelpny.com
- If you live in New York City, you can also call 311.
- The Legal Services Corporation website.
- LawHelp.org, an online directory of free legal service providers in New York.
If you are in a foreclosure court case, you should consult an attorney.
There are ways to protect your credit score while you are experiencing financial hardship. Credit scores are based on credit reports created by information that your lenders and servicers submit to credit reporting agencies. To ensure your mortgage servicer correctly reports your mortgage in a way that does not harm your credit score CONTACT YOUR SERVICER and explain your situation. You’ll find their contact information on your most recent bill.
After talking to your servicer about your situation, if you request relief, you may learn that they will place your accounts in forbearance/hardship or deferral. These are common methods servicers use to report accounts to the credit reporting agencies.
Under the federal CARES Act, if you are receiving an “accommodation” on your mortgage, such as a forbearance or a repayment plan, and you were not delinquent on your mortgage before COVID-19, your servicer must report your loan as “current” even if you are not making payments. New York Banking Law 9-x also prevents your servicer from making negative reports based on relief you receive under that law.
You can ensure your mortgage was properly reported by requesting a free credit report at annualcreditreport.com. You are generally entitled to one free credit report every twelve months from each of the three major credit reporting agencies, and currently credit reporting agencies are offering free weekly reports.
What documents will be required to get approved for a forbearance?
There is no specific set of documents that every servicer requires for a forbearance so the best course of action is always to speak directly to your servicer and ask for a detailed list of requirements. Documents like pay stubs, unemployment paperwork, employer letters and bank statements are the types of things you may be asked to provide. Such documents may help with the forbearance process, as well as any resulting loss mitigation.
What if I was already in default on my mortgage—do I still have options?
Yes. But to take advantage of any existing options, you must contact your servicer as soon as possible and make them aware that you have been impacted by COVID-19. Once you have spoken with your servicer regarding your options, you may wish to reach out to a housing counselor or attorney.
I can still afford my mortgage—is there any benefit to me asking for relief?
If you are not experiencing a hardship making your mortgage payments you should continue to do so, however everyone’s situation is slightly different, and it is important to speak to your servicer and a housing counselor or attorney before making any decisions regarding your loan. Once you have educated yourself on what specific options are available to you and the potential impact of such options, you can work with a housing counselor or attorney to determine the best option for your situation.
Are there any fees associated with getting a forbearance?
No. A servicer may not charge any fees to a consumer for entering into a forbearance agreement, but keep in mind that any repayment plan or other type of modification of your loan may result in added costs. Make sure to ask your servicer what foreseeable costs may be associated with getting your loan back on track after the forbearance period.
I have a reverse mortgage—what are my options?
A reverse mortgage is eligible for the same relief as a more traditional, forward mortgage loan. Consult with your servicer to learn what specific options may be available to you.
I have a mortgage for my condo or co-op—what are my options?
A mortgage for a condo or co-op is eligible for the same relief as a more traditional mortgage loan. Consult with your servicer to learn what specific options may be available to you.
Where can I find information on my rights under state and federal law?
Homeowner’s rights can be found in many places in the law. Always consult with an attorney or housing counselor to ensure that you are aware of all of your rights, but below are links to the most relevant laws:
- New York Banking Law 9-x
- Department’s Part 419
- Department’s Emergency Part 119
- Regulation Z
- Regulation X
If you need legal assistance, please see the “Where You Can Get Help” section above.
What impact will forbearance relief have on my escrow account?”
If your property tax and insurance are part of your monthly payments (that is, if you have an escrow account), after your forbearance, your escrow account may have a shortage. That means that your monthly mortgage payments may go up after your forbearance, because your servicer is entitled to collect more funds from you to correct the shortage caused by the missed payments.”
Watch Out For Scams
Scams often increase during a crisis or after a disaster. Scammers often use current events, like government announcements about relief programs, to appear legitimate. Be careful about accepting assistance from anyone other than your servicer, the government, and legitimate non-profit organizations. Here are some suggestions for how to avoid scams and what to do if you find yourself in a scam.
BEWARE of anyone who:
- asks for an upfront fee in exchange for mortgage assistance. New York law prohibits the collection of such fees in most cases.
- says they can “save” your home if you sign or transfer the deed to your house over to them in exchange for mortgage assistance.
NEVER submit your mortgage payments to anyone other than your mortgage company without their approval.
CONSULT with a trusted source such as:
- Government – If someone says they are working on behalf of a government program, lookup the program on the Internet and call them directly to confirm. Just because the program exists does not mean that the scammer really works for the government.
- Attorney – See the “Where You Can Get Help” section above.
- Housing Counselor – See the “Where You Can Get Help” section above.
STAY INFORMED by visiting the official websites of the Federal Trade Commission (FTC), U.S. Centers for Disease Control and Prevention (CDC), New York State Department of Health (NYSDOH), and the DFS Foreclosure Scams page.
Remember, if it’s too good to be true, then it probably is.