The state of emergency declared by both New York state and the Federal government due to the COVID-19 pandemic has caused significant economic disruptions for many businesses. We are all aware that these disruptions in turn are significantly and adversely impacting employees by causing, among other things, a reduction and/or cessation of work and therefore income.
In order to ease the stress of financial hardship on families and businesses, on March 19, 2020, New York State Department of Financial Services issued guidelines for financial institutions to follow during the COVID-19 outbreak. National mortgage holders such as Fannie Mae, Freddie Mac and HUD also directed that mortgage servicers for residential mortgages implement certain of these measures. Significantly, financial institutions were directed to take steps to (a) forbear from accepting mortgage payments for at least 90 days, and up to one year, from the due dates; (b) work with borrowers to offer additional time and relaxed guidelines for evaluating loan modifications; (c) waive late payment and electronic payment fees; and (d) postpone/suspend foreclosures and evictions for at least 60 days.
Thereafter, on Saturday March 21, 2020, Governor Cuomo issued an Executive Order (EO 202.9) directing that all banks and financial institutions that are licensed or regulated entities provide an opportunity for a forbearance of payments for mortgage payments for any person or entity facing a financial hardship due to the COVID-19 pandemic. Emergency regulations are to be issued by the Department of Financial Services directing the implementation of the Executive Order. It would appear that the scope of the Executive Order includes residential and commercial mortgages.
The overall impact of the COVID-19 crisis is unknown. Harris Beach PLLC will continue to monitor and provide updates and changes to the mortgage industry as new orders, directives and guidelines are implemented. Please see our COVID-19 response page for further resources.
Harris Beach’s Financial Restructuring, Bankruptcy and Creditors’ Rights team welcomes the opportunity to discuss the workout alternatives that are available to assist and support your customers during this time.
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, New York City, Rochester, Saratoga Springs, Syracuse, Uniondale and White Plains, as well as New Haven, Connecticut and Newark, New Jersey.