Governor Andrew M. Cuomo today announced that several major state-chartered banks and mortgage servicers have agreed to offer relief for home mortgage borrowers in the areas affected by Storm Sandy, including, in many cases, no foreclosures and no late fees for 90 days.
State chartered banks providing loan relief efforts include Apple Savings Bank, Dime Savings Bank of Williamsburg, Emigrant Savings Bank, M&T Bank, New York Community Bank, Ridgewood Savings Bank, Hanover Community Bank, among others. State registered mortgage servicers providing loan relief efforts include Citi Mortgage, Homeward Residential, Ocwen Loan Servicing, Nationstar, as well as others.
Thousands of New Yorkers lost everything, while others are struggling with no electricity and limited ability to travel or communicate. As a result, some people may be late in payments on mortgages or incur other bank fees and penalties. Im proud to say that major New York State chartered banks and registered mortgage servicers have agreed to waive fees and penalties so borrowers, who are already facing the difficulties and expenses of recovering, wont have this additional cost. I call on any state chartered banks and mortgage servicers that have not yet provided relief programs to borrowers to follow suit, Governor Cuomo said.
Benjamin M. Lawsky, Superintendent of Financial Services, said, Too many people have already lost their homes or are facing difficult repairs. We dont want to add to the problem by having people lose their homes or develop financial problems because they cant make timely mortgage payments due to the storm. We will continue to work with banks and mortgage servicers to protect those suffering from Sandy.
Details may vary from institution to institution and borrowers should contact their individual bank or mortgage servicer for specifics. In general, banks and mortgage servicers are working with borrowers who have been harmed as a result of Storm Sandy and offering the following types of relief:
- 90-day postponement of foreclosures and evictions.
- 90-day waiver of late fees on mortgage payments, including online payments.
- In some cases, 90-day or more forbearance on mortgage payments where the borrower has been impacted by the storm and is seeking relief.
- Waiver of interest where a refinancing transaction has been closed, but not funded.
- For borrowers in a trial modification, late payments will not negatively affect such status or prevent the borrowers from obtaining permanent mortgage modifications.
- Banks and servicers will not notify credit bureaus if borrowers make late payments.
Superintendent Lawsky also urged banks and mortgage servicers to reassess the current credit needs of communities to help meet those needs by making sound loans. They should also consider a prudent restructuring of an affected borrowers debt obligations, by altering or adjusting payment terms.
Local banks and mortgage servicers can play a major role in helping our communities recover, as they have played a major role in their growth before the storm, Superintendent Lawsky said. Superintendent Benjamin Lawsky also reminded mortgage servicers that as a result of the order prohibiting the termination, cancellation, or non-renewal of homeowners insurance policies for 30 days starting October 26, servicers cannot force place insurance on any homeowner who had insurance in effect as of that date. Since homeowners insurance will remain in place, no force-placed insurance is needed to protect the lenders interests.
Normally, servicers have a right to buy what is known as force-placed insurance if a homeowner does not maintain the insurance required by the mortgage. This often happens when homeowners fall behind on mortgage payments. Force-placed insurance is typically far more expensive than the coverage purchased by a homeowner, yet often provides far less protection for the homeowner.
Financial institutions seeking additional guidance for assisting customers affected by the impact of Storm Sandy are urged to contact the Departments Albany office at 518-473-6160.
Sarah Ludwig, Co-Director of NEDAP, an economic justice organization based in New York City, said, NEDAP commends Governor Cuomo for taking rapid action to get many state banks and mortgage servicers to agree to a 90-day foreclosure reprieve for homeowners in the wake of the hurricane. We hope that all lenders doing business in the state will follow these measures, which are urgently needed to prevent another wave of mortgage distress and foreclosures in New York communities hit by the storm.
Kirsten Keefe, Senior Attorney, Empire Justice Center, said, We applaud Governor Cuomos quick response and believe it will be a welcome relief to many homeowners impacted by Sandy. When someone suffers damage to their home, or loses income because of a natural disaster such as Sandy, new necessities of life emerge and folks just need a reprieve from their regular financial obligations. Hopefully the three month moratorium and forbearance of payments being offered by the banks will be enough time for most people to get back on their feet. We are also hopeful that this is a first step and that lenders will continue to work beyond the moratorium with the worst impacted homeowners who sustained greater damage or total loss of their homes.