New York State Releases Emergency Mortgage Regulations

March 25, 2020 at 9:37 am Leave a comment

Good morning folks, with a special shout-out to our sleep deprived federal lobbyists who are eagerly awaiting final passage of the massive stimulus package reportedly agreed on by Senate negotiators early this morning.

While we wait to see what is tucked away in the trillion-dollar stimulus package, New York’s governor continues to impact banking operations on a daily basis.  Late yesterday afternoon, the Department of Financial Services released emergency regulations that lay out the legal obligations of New York State regulated institutions that have members suffering a financial hardship because of the COVID-19 pandemic.  Today’s blog is a high level snapshot with more analysis forthcoming, particularly as the Association fields questions regarding its implementation.

What does the Regulation require?

            It requires financial institutions to provide 90-day mortgage forbearances for New York State residents with New York State property who have a demonstrated financial hardship as a result of the COVID-19 pandemic.  In addition, such institutions must also waive ATM, overdraft and credit card fees for such individuals.  This last requirement applies to ATMs that are owned and operated by the banking organization.

By when do I have to get this program up and running?

            You have up to ten days to provide notice to your members of these options.

How do I determine if someone qualifies?

              You develop the criteria that can include an examination of an individual’s financial resources.  This means that you have to develop an application for individuals seeking to apply.  Denials have to be in writing and members have to be given notice of the opportunity to contact DFS to challenge a negative determination.

Does it apply to my credit union?

            This answer involves some gray area.  What we know for sure is the mortgage regulations do not apply to mortgages owned or being serviced on behalf of the GSEs.  We also know unequivocally that the mortgage regulations only apply to New York State property owned by New York State residents.  In contrast, these regulations apply to:

“…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 Department.”

The gray area involves an assessment as to whether or not this definition extends to exempt organizations subject to registration requirements under New York Law.

Stay safe. Stay healthy, and remember, if you are reading this blog, you have a roof over your head and a safe place from which to wait out this bizarre period in our history.

Entry filed under: Compliance, Mortgage Lending, New York State, Regulatory. Tags: , , , , , .

New York State Releases Emergency Mortgage Regulations When Forbearances Aren’t the Best Option For Your Members

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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