Housing Programs & Services

Mortgage & Foreclosure Relief: Under COVID-19

T + T

Summary

Governor Andrew Cuomo’s Executive Orders and the Federal Coronavirus Aid, Relief, and Economic Security (CARES) Act enacted foreclosure moratoriums for property owners during the pandemic. The Governor’s most recent Executive Order now covers commercial properties only. Two laws signed June 17th, 2020 affords qualified mortgagors in NYS the ability to apply for residential mortgage forbearance with NYS regulated financial institutions. The CARES Act covers properties with federally backed loans and made forbearance relief available to owners of these properties.

NYS Foreclosure Moratorium

Note

The U.S. Supreme Court ruling from August 12, 2021 that affects the eviction moratorium under the NYS COVID-19 Emergency Eviction and Foreclosure Prevention Act (CEEFPA) does not affect the NYS foreclosure moratorium for eligible properties.

On December 28, 2020, the NYS COVID-19 Emergency Eviction and Foreclosure Prevention Act became law and afforded foreclosure protection until at least August 31, 2021 to homeowners and small landlords who own 10 or fewer residential dwellings (mortgagors). However, the law does not prevent mortgagors from owing the mortgage payments to their lenders.

To prevent foreclosure under the law, mortgagors must submit a hardship declaration form to their mortgage lender (or foreclosing party), or court (if already in a foreclosure proceeding). To access the hardship declaration form in English and other languages, click here.

In signing and submitting the declaration, the mortgagor is certifying that the property is eligible for protection from foreclosure because the mortgagor is experiencing a financial hardship and is unable to pay the mortgage due to one or more of the following:

  • Significant Loss of income during the COVID-19 pandemic
  • Increase in out-of-pocket expenses related to essential work or health impact during the COVID-19 pandemic.
  • Responsibilities for the care of children, elderly, disabled, or sick family member during COVID-19 pandemic have negatively affected the ability of the household to be employed or earn income or resulted in higher out-of-pocket expenses.
  • Securing alternative housing or moving expenses would be a hardship during the COVID-19 pandemic.
  • Other circumstances related to the COVID-19 pandemic have negatively affected the ability of the household to be employed or earn income or reduced household income or resulted in higher out-of-pocket expenses.
  • One or more tenants has defaulted on rent payments since March 1, 2020.
  • Additionally, any public assistance received since the start of the COVID-19 pandemic does not make up for the loss of income or increased expenses. (Public assistance can include unemployment insurance, pandemic unemployment assistance, disability insurance, or paid family leave.)

For the COVID-19 Emergency Eviction and Foreclosure Prevention Act text, click here.

Note

Homeowners (including landlords and property owners) may be able to access mortgage forbearance through their financial institutions. For more information on the mortgage forbearance, see below, Mortgage & Foreclosure Relief, Mortgage Relief.

Federal Foreclosure Moratorium

Properties with mortgages owned by Fannie Mae, Freddie Mac, US Department of Veterans Affairs, US Department of Agriculture, US Department of Housing and Urban Development (HUD) or secured by Federal Housing Administration (FHA)insured Single-Family mortgages are subject to a moratorium on foreclosure.

Foreclosure moratoriums are in effect until July 31, 2021.

For more information, visit:

To find out the type of loan an individual has, visit official US Program, Making Home Affordable or Mortgage Electronic Registration Systems, Inc. (MERS) ServicerID.

Foreclosure Assistance

If an individual’s loans is not covered by the foreclosure moratoriums, access foreclosure prevention assistance at https://cnycn.org/covid-19-outbreak-homeowner-resources.

Mortgage Relief

FEDERALLY BACKED MORTGAGES

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, homeowners with federally backed mortgages have the right to request forbearance for up to 180 days, with the ability to request an extension of an additional 180 days. Forbearance can result in a lower mortgage payment amount or a temporary suspension of mortgage payments altogether. While the mortgage payment will still be owed and must be repaid by the homeowner, the servicer cannot charge additional fees, penalties, or additional interest during the forbearance period.

Federal agencies that offer federally backed mortgages include:

  • US Department of Housing and Urban Development (HUD)
  • US Department of Agriculture (USDA)
  • Federal Housing Administration (FHA)
  • US Department of Veterans Affair (VA)
  • Fannie Mae
  • Freddie Mac

The federal agencies listed above have extended the deadlines to request initial forbearance and/or will honor additional requests for forbearance extensions beyond 360 days afforded by the CARES Act. For additional information, visit https://www.consumerfinance.gov/coronavirus/mortgage-and-housing-assistance/mortgage-relief.

To find out the type of loan an individual has, visit: https://www.makinghomeaffordable.gov/get-answers/Pages/get-answers-find-out-mortgage.aspx or https://www.mers-servicerid.org/sis.

Homeowners should contact their loan servicer if they are experiencing a financial hardship due to the pandemic. They would not need to submit additional documentation to qualify.

NON-FEDERALLY BACKED MORTGAGES IN NYS

Note

The forbearance options outlined below are for mortgage payments owed during the “COVID-19 covered period,” defined as March 7, 2020 – June 24, 2021. As such, the forbearance options may be not available for mortgage payments due after June 24, 2021.

On June 17th, 2020, Governor Andrew Cuomo signed two bills into law (S08243 and S08428) affording qualified homeowners (mortgagors) in NYS the ability to apply for residential mortgage forbearance with NYS regulated financial institutions. The laws create forbearance options for mortgage payments due between March 7th and until all COVID-related restrictions on nonessential gatherings and businesses are lifted in the tenant’s county. The NYS COVID-19 state of emergency declared on March 7, 2020 expired Thursday, June 24 at 11:59pm. As such, COVID-related restrictions in NYS are lifted.

For mortgage payments due between March 7, 2020 – June 24, 2021, the forbearance options potentially available are:

  • Extension of the term of the loan for the length of the forbearance period; or,
  • Accumulation of the mortgage arrears during the forbearance period and payable monthly for the duration of the loan; or,
  • Deferral of arrears during the forbearance period and payable as a one-time payment at the end of the loan; or,
  • Negotiation of a loan modification or any other option to meet the needs of the mortgagor.

The forbearance period can last 180 days, with an extension of an additional 180 days. Additionally, the institution cannot charge additional fees, penalties or additional interest during the forbearance period.

Prior to the laws, Governor Cuomo signed Executive Order 202.9 and the New York State Department of Financial Services issued an emergency regulation requiring that NYS regulated financial institutions provide residential mortgage forbearance on property located in New York for a period of 90 days to any individual residing in New York who demonstrates financial hardship resulting from COVID-19. If a qualified mortgagor used the 90 days as allowed in these regulations, S08428 indicates that the 90 days are part of the 180 days allowed, and the mortgagor can also request the 180 days extension.

Homeowners in NYS should contact their loan servicer for any available forbearance options.

NYC Property Taxes

NYC property taxes are still due to the NYC Department of Finance (DOF).

DOF offers several programs to assist property owners who face hardships making their property tax payments. These include exemption programs to lower the amount of taxes owed, standard payment plan options as well as the new Property Tax and Interest Deferral (PT AID) program, for those who qualify.

For more information about other homeowner resources visit: https://www1.nyc.gov/site/finance/benefits/benefits.page.

TEMPORARY SUSPENSION OF TAX LIEN SALES AND TAX FORECLOSURE

Note

The U.S. Supreme Court ruling from August 12, 2021 that affects the eviction moratorium under the NYS COVID-19 Emergency Eviction and Foreclosure Prevention Act (CEEFPA) does not affect the temporary suspension of tax lien sales and tax foreclosure for eligible properties.

On December 28, 2020, the NYS COVID-19 Emergency Eviction and Foreclosure Prevention Act (CEEFPA) became law. This law prevents local governments from engaging in tax lien sale or tax foreclosure of properties with 10 or fewer residential dwelling units until at least August 31, 2021. However, property owners are still responsible for tax payments to their locality.

To prevent a tax lien sale or tax foreclosure of a property, the owner must submit a hardship declaration form to their village, town, city, school district, county, or other entity conducting the sale or foreclosure. In signing and submitting the declaration, the mortgagor is certifying that the property is eligible for protection from tax lien sale or tax foreclosure because the owner is experiencing a financial hardship and is unable to pay the full tax bill due to one or more of the following:

  • Significant Loss of income during the COVID-19 pandemic
  • Increase in out-of-pocket expenses related to essential work or health impact during the COVID-19 pandemic.
  • Responsibilities for the care of children, elderly, disabled, or sick family member during COVID-19 pandemic have negatively affected the ability of the household to be employed or earn income or resulted in higher out-of-pocket expenses.
  • Securing alternative housing or moving expenses would be a hardship during the COVID-19 pandemic.
  • Other circumstances related to the COVID-19 pandemic have negatively affected the ability of the household to be employed or earn income or reduced household income or resulted in higher out-of-pocket expenses.
  • One or more tenants has defaulted on rent payments since March 1, 2020.
  • Additionally, any public assistance received since the start of the COVID-19 pandemic does not make up for the loss of income or increased expenses. (Public assistance can include unemployment insurance, pandemic unemployment assistance, disability insurance, or paid family leave.)

For the COVID-19 Emergency Eviction and Foreclosure Prevention Act text, click here.