The Department of Financial Services just released the rules of engagement for banks to grant relief to homeowners impacted by the coronavirus.
The regulations, promulgated Tuesday afternoon, follow Gov. Andrew Cuomo’s executive order last week telling banks to give homeowners a break. The rules only apply to residential mortgages, not commercial loans or multifamily landlords — a point that was, until now, still somewhat unclear for many.
Within 10 business days, according to the regulation, state-regulated banks will have to “email, publish on their website, mass mail, or otherwise similarly broadly communicate” to borrowers how they can receive the 90 days of forbearance on their mortgage payments.
Applications for relief should be processed within 10 business days, and be expedited if need be. The regulation also tells banks to work constructively with borrowers should anything be missing from their application for “COVID-19 relief.”
The measure also directs banks to eliminate fees for ATMs, overdraft fees and credit card late fees — and also encourages banks to take “reasonable and prudent actions to assist individuals demonstrating financial hardship as a result of the COVID-19 pandemic in any manner they deem appropriate.”
The measure provides relief for homeowners who are unable to make mortgage payments as a result of coronavirus-related financial hardship. But the measure does not acknowledge the 3.3 million households that rent across New York, or the multifamily landlords who will be unable to pay their lenders on April 1.
Landlords who have mortgages that are secured by Fannie Mae and Freddie Mac on Monday received notice of a similar deal. Borrowers can postpone mortgage payments as long as they don’t evict any of their tenants.
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