NYS Legislature Enacts COVID Hardship Exemption For Individuals Facing Foreclosure

January 4, 2021 at 10:32 am Leave a comment

You know that feeling you get a few days before Christmas when you’re afraid you should have gotten one extra present for that special someone.  You end up frantically checking out the last second deals and getting a present that feels good in the moment but ends up destined to be re-gifted.  If you work for the legislature, you can respond to this last second urge by passing a bill in the week between Christmas and New Year’s which provides foreclosure and credit relief for homeowners and tenants alike.  Let’s hope that this well intended measure doesn’t result in more confusion than would have a less hastily enacted piece of legislation. 

As you review Assembly Bill 11181, keep in mind that its purpose is not only to protect residential homeowners but also to protect small landlords and condo and co-op owners.  Under the bill, any individual who owns ten or fewer “dwelling units” can obtain a moratorium against any foreclosure actions until May 1, 2021.  Foreclosing parties are responsible for providing a copy of a hardship exception form to parties facing foreclosure.  Individuals seeking to freeze their legal actions will be responsible for submitting a signed copy of a new MORTGAGOR’S DECLARATION OF COVID-19-RELATED HARDSHIP.  If all goes according to plan, the form should be available on the office of Court Administration’s website this week.  It will be available in English and six other languages.  If your homeowner’s primary language is not one of these six languages, then it is the foreclosing party’s obligation to obtain the necessary paperwork.  This new requirement does not apply to vacant and abandoned property. 

Of course the state legislature wasn’t the only group working in the closing days of the year.  In tomorrow’s blog I’ll be talking about the operational impact those $600 stimulus checks are having on your credit union.

Although the moratorium has gotten much of the attention, another part of the bill may have an operational impact on your credit union regardless of whether or not it even offers mortgages.  Specifically, the law provides that

“…lending institutions shall not discriminate in the determination of whether credit should be extended to any owner of residential real property as defined in subdivision one of this section because, as provided for in this act, such owner has been granted a stay of mortgage foreclosure proceedings, tax foreclosure proceedings or of tax lien sales, or that an owner of residential real property as defined in subdivision one of this section is currently in arrears and has filed a hardship declaration with such lender.”

Entry filed under: General. Tags: .

Happy Holidays. See you next year… thanks for reading! What Not to Do With Those $600 Relief Checks

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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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