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Options for Homeowners during COVID-19—FAQs Answered

The COVID-19 pandemic has caused devastating financial ripple effects for millions of individuals and families. With New York state being one of the top states in the U.S. with the highest property taxes, many New Yorkers are worried they will drown in debt and ultimately lose their homes. 

On July 10th, 2020, NYLAG held a live Q&A discussing mortgage forbearance, repayment plans, loan modifications, and more. You can view the pre-recorded video below, as well as some FAQs answered.

Below are some of the FAQs Answered:

  • NYS, the federal government, and various non-profits are all implementing new homeowner programs. The assistance varies based on how far behind you are in your payments, the type of loan you have, and the company that services your loan.
  • Typically, you can apply for a forbearance of up to 180 days. After the forbearance, you will need to either apply for a modification or bring your loan current. Some lenders are also allowing homeowners to make their missed payments at the end of their loan.
  • Government-backed loans (FHA, FNMA, Freddie Mac, VA) are primarily governed by federal law, most recently the CARES ACT.
  • State programs are governed by:
  • Always keep a record of communications with your servicer. Who did you speak to? When did you have the conversation? What was said or promised?
  • There are free housing counselors in NYS that can help you with a modification application. Sometimes seemingly silly mistakes can delay an application. Also, the counselors have helpful contacts at the mortgage servicers that they can talk to if they experience any problems with a modification application.
  • A list of free housing counselors can be found at https://www.dfs.ny.gov/consumer/mortg_nys_np_counseling_agencies.htm
  • If you decide to apply by yourself, keep detailed records of all of the documents you submit so you can refer to them as needed.
  • Keep detailed records of all any mistakes or miscommunications on the part of the bank as these might provide useful leverage if your mortgage company eventually starts a foreclosure action.
  • If you miss three payments and do not request homeowner assistance, your mortgage company may refer your account to an attorney to start a foreclose lawsuit. In New York State the bank may not take your house unless they file a lawsuit, comply with all foreclosure laws, and get a judge to order the sale of the property at a foreclosure auction. The foreclosure process in New York State has historically taken 1-2 years, although the timeframe can vary dramatically from case to case. A homeowner has the right to save their home up until a foreclosure auction.
  • https://www.nycourts.gov/courthelp/pdfs/Foreclosureflowchart.pdf
  • Foreclosure lawsuits are in the public record and many companies and real estate investors turn profits by preying on people desperate to keep their homes. Some of them are legitimate businesses but many make false promises and deceive you into thinking they are trying to help when in fact they are only looking out for themselves. Most importantly, do not sign any documents until you have an opportunity to consult with an attorney you trust. There are free legal service providers that can advise you, such as NYLAG, if you cannot afford an attorney.
  • If you believe you have been the victim of a scam, or if you suspect someone is committing real estate fraud, please file a complaint with the NYS Attorney General, NYS Dept. of Finance, and law enforcement.
  • https://www.dfs.ny.gov/complaint
  • https://ag.ny.gov/complaint-forms
  • The courts are changing their policies and procedures on a daily basis and foreclosure cases are handled differently in each county. Fortunately, no home can be sold in a foreclosure auction until August 20, 2020. If you have a pending foreclosure case, you should contact the court asap to find out the status of the case.
  • If you have a pending foreclosure, you may still apply for a forbearance or modification and should contact your servicer ASAP.
  • https://www.nycourts.gov/
  • https://www.nycourts.gov/courthelp/pdfs/Foreclosureflowchart.pdf

For more information on mortgage relief, foreclosures, and the latest resources for COVID-19, click here

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In response to the COVID-19 crisis, we are still working hard and our intake lines are open, but please note that our physical office is closed.

During these unprecedented times, we’ve launched a free NY COVID-19 Legal Resources Hotline and compiled the latest legal and financial counseling updates.