Posts tagged ‘foreclosure moratorium’

Can You Challenge A Hardship Declaration?

When the New York State Legislature gathered in early September and approved legislation extending New York’s foreclosure and eviction moratorium until January 15, 2022 for individuals suffering a COVID related hardship, it included a provision permitting landlords and lenders to challenge the validity of a person’s hardship claim. At the time that this bill was passed, it was unclear how much value this exception to the moratorium would actually have. We may get clarity on that issue in the near future.

The New York Law Journal is reporting that Justice Lawrence Knipel, administrative judge for civil matters in Kings County, has sent a letter informing homeowners facing foreclosure that they must attend in-person “foreclosure conferences” starting on October 25th. The letter explains to recipients that failure to attend these conferences could result in losing their foreclosure cases and informs the delinquent homeowners that they should bring any documents concerning their loan and current financial situation.

Attorneys from Brooklyn Legal Services sent a letter to the State’s Chief Administrative Law Judge, Lawrence Marks on Wednesday that these proposed hearings “plainly violate ‘New York’s foreclosure moratorium.”  Marks is responsible for the day-to-day operations of the court system in New York State.

Under the law, any party facing foreclosure and eviction can declare that their financial situation has been negatively impacted by the COVID-19 pandemic. Furthermore, these declarations are presumptively valid; this means that the burden is on the foreclosing party to prove that the delinquent homeowner is not suffering a COVID related hardship. What the lawyers seem to be questioning is whether the judge has the authority to mandate hardship conferences even in cases where lenders have not challenged these declarations. Stay tuned.

CUSOs Just Got More Powerful

You probably already know this, but in case you don’t, over the objection of Chairman Todd Harper, NCUAs Board voted two-to-one to expand the authority of Credit Union Service Organizations. The Board’s vote was the first in what may ultimately be a series of steps it takes to expand the flexibility federal credit unions have in relation to CUSO investments. Under the new rule, the list of permissible CUSO activities is being expanded to include any type of loan that an FCU may originate. The new rule also allows the Board the flexibility to grant future CUSO powers outside of the formal rulemaking process. The new rule is effective 30 days after it is published in the Federal Register.

A second regulation passed by the Board yesterday amends the CAMEL rating system by creating a separate category assessing a credit union’s sensitivity to market risk. This change puts NCUA on par with banking regulators. On that note, enjoy your weekend.

October 22, 2021 at 9:49 am Leave a comment

SC Rules that New York’s Eviction Moratorium Goes Too Far

The Supreme Court on Thursday granted emergency relief to landlords challenging a New York State statute barring them from commencing eviction proceedings against tenants who certify that they are suffering a financial hardship as a result of COVID-19. Although the law in question was set to expire on August 31st, the Court’s decision could have important implications if and when the state chooses to take similar steps in the coming weeks or in response to a future economic downturn.

Part A of Chapter 381 of the laws of 2020 provided that individuals could avoid foreclosures by indicating that they were being harmed by the pandemic. A separate section of the bill which the Supreme Court’s decision did not address extended similar protections to homeowners facing foreclosure. In blocking New York State from enforcing this bill against landlords the court technically did not issue a decision on the merits of the case, but by granting the emergency order a majority of the court signaled that New York’s law was illegal. There was even a dissenting opinion.

In a terse explanation of its decision, the majority explained that New York’s statute violated the “longstanding teaching that no man can be a judge in his own case.” In other words, any future law seeking to block evictions has to give landlords the ability to show that a tenant is not suffering from a financial hardship.

Like I said, although this case dealt specifically with evictions, the same argument could easily be made as applied to New York’s foreclosure ban, also set to expire on August 31st, which provides no mechanism for mortgage holders to contest a homeowner’s financial hardship.

                                                Hochul Transition Picks Up Pace

New York’s Superintendent of the Department of Financial Services announced that she would be resigning on August 24th, the same day the Governor has indicated he will hand over power to Lt. Governor Kathy Hochul. Before becoming the Superintendent, Lacewell served as a top aide to the Governor and remained an active advisor.

As for the Governor-in-waiting, she spent Sunday morning appearing on two Sunday news shows demonstrating, yet again, that in politics a week really is a long time. Virtually overnight, she has catapulted from the lowest profile statewide position in New York State government to a nationally significant politician. 

August 16, 2021 at 9:19 am Leave a comment

End Of CDC Protections Puts Focus Back On NY State

Standing on tenuous legal ground (second entry), the Biden administration announced Saturday that the CDC would no longer be extending the national eviction moratorium beyond July 31st. The announcement means that, absent highly unlikely federal legislation extending the moratorium, the action returns to the state level. Most importantly, with or without the federal moratorium, New York State’s eviction and foreclosure moratorium on most properties remains in effect until August 31st.

These FAQ’s on New York’s Department of Financial Services’ website remind New Yorkers of their rights under state law. The bottom line is, with or without the changes to federal law, August 31st remains the key date for foreclosure and eviction purposes in New York State.

September 1st also remains the key date for mortgage servicers who have to comply with the CFPB’s nuanced regulations intended to provide delinquent homeowners additional notice of forbearance options which may be available to them.

Looking at the big picture, the CFPB remains concerned that nationwide the coming weeks will witness a huge surge of evictions and foreclosure proceedings. It has put servicers on notice that it will be keeping a close eye on their conduct and you can bet that state regulators will be taking a similar approach.

August 2, 2021 at 9:31 am Leave a comment

NY Extends and Increases Foreclosure Moratorium

The New York State Legislature just passed what it is proclaiming to be the strongest moratorium law in the country.  

Specifically, it has passed a measure (S6362-A) extending until August 31, 2021 an eviction and mortgage moratorium. The law, which was originally passed in December and signed by the Governor applies to both tenants facing eviction and individuals with ten or fewer residential mortgages, one of which is their primary residence.  This prohibition does not apply to mortgages owned by Fannie Mae or Freddie Mac, which are subject to a separate moratorium.

A second closely related measure (S5742) extends the foreclosure moratorium to commercial tenants in New York State that employ up to one hundred or fewer employees or was closed to in-person operations by executive order between May 15, 2020 and May 1, 2021 and employs up to five hundred employees.

May 5, 2021 at 9:50 am Leave a comment

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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