Both federal and state law now permit homeowners to enter into forbearance agreements with their mortgage servicer if they are facing a COVID-19-related hardship, such as loss of a job. A mortgage servicer is the company that your lender (or the entity that later purchased your loan from your original lender) hires to conduct the day-to-day work of processing mortgage payments, issuing monthly statements, interacting with homeowners, and if necessary, reviewing homeowners for modifications and forbearances.
If you enter into a forbearance agreement, you will not have to make mortgage payments during the period covered by the agreement. However, this does not mean that your payments during this period are forgiven, they will be deferred. A forbearance will not be reported negatively on your credit report and you will not be charged late fees during the forbearance period. If you are facing a COVID-19-related hardship, you should reach out to your mortgage servicer as soon as possible to request a forbearance of your monthly mortgage payments - this process is not automatic. Get more information about identifying your mortgage services and their contact information.
If you have a federally-backed mortgage (how do I know if I have a federally-back mortgage?) and have a COVID-19 related hardship, your servicer is required to enter into a forbearance agreement with you that allows you to defer making your monthly mortgage payments.
For homeowners with an FHA mortgage, VA mortgage or USDA mortgage, you can defer making payments for up to twelve (12) months. However, if you first entered into a COVID-19-related forbearance on or before June 30, 2020, you can defer making payments for up to eighteen (18) months. Many servicers will grant forbearances in increments, usually three months at a time. You must contact your servicer by phone or through its website and explain that you have a COVID-19-related hardship. No documentation is required, your verbal affirmation is sufficient. If your hardship continues after your forbearance period ends, you must request a new forbearance agreement from your servicer, however, again, you are limited to the maximum amount of missed mortgage payments listed above.
Federally-backed mortgages include the following:
To find out if you have a federally-backed mortgage, call your mortgage servicer or check your mortgage statement, which sometimes lists the loan type. For Fannie Mae and Freddie Mac you can also check online or call.
Fannie Mae or call 1-800-2FANNIE (8am to 8pm EST)
Freddie Mac or call 1-800-FREDDIE (8am to 8pm EST)
Under N.Y. Banking Law § 9-x, which went into effect on June 17, 2020, regulated banking organizations and mortgage servicers supervised by New York's Department of Financial Services ("DFS") must provide up to one year (365 days) of forbearance relief to homeowners who experience a financial hardship as a result of COVID-19. Banking Law § 9-x generally provides forbearance relief for New York homeowners undergoing a COVID-19-related hardship, except for those homeowners with a federally-backed loan (who are entitled to comparable relief under the CARES Act). If you are not sure whether Banking Law § 9-x covers your loan, you should contact your servicer to ask.
You must contact your mortgage servicer - by phone or through its website - to request a forbearance. Your servicer may ask you to submit documentation of your hardship to approve your forbearance request. Servicers are also prohibited from reporting late payments to credit agencies, must waive late fees and online payment fees for the duration of the and must allow mortgagors an additional 90-day grace period to complete trial loan modifications.
The obligation to grant a one-year forbearance pursuant to Banking Law § 9-x is subject to the regulated institution having sufficient capital and liquidity to meet its obligations and operate in a safe and sound matter. Banking Law 9-x permits a regulated institution to deny a request for a forbearance if it determines that such relief would threaten the company's financial solvency. However, the institution must provide notice to DFS with information regarding its financial condition. To date, the OAG is not aware of any servicers who have claimed that they are unable to offer the relief required under Banking Law § 9-x. However, the OAG wants to hear from any homeowners who have been denied a forbearance agreement or post-forbearance relief due to this provision in the law. If you are denied forbearance relief by a servicer who claims it will threaten the company's financial soundness, please submit a complaint to the New York State Attorney General's Office.
How do I ask for a forbearance?
Visit your mortgage servicer's website or call your mortgage servicer if you think you will have trouble paying your mortgage and inform them that you cannot make your payment because of a financial hardship related to COVID-19. If you call, make sure to request forbearance.
How do I know who my mortgage servicer is and how do I contact the servicer?
Look at the last monthly statement you received. The company listed on that statement is your current mortgage servicer. There should also be a customer service number that you can call. However, we strongly encourage you to check your mortgage servicer's website first. Many mortgage servicers have a special section on COVID-19-related relief on their website, and many are encouraging their customers to reach out electronically because of large call volumes and potential wait times. You may even be able to request a forbearance through their website.
What happens after the forbearance period ends? Must I immediately repay the missed payments?
Missed payments become due when the forbearance period expires, and you will need to agree with your mortgage servicer in advance on the terms of repayment. However, there are a variety of rules and programs that require your servicer to work with you to help you get back on track. The specific rules vary depending on who owns, insures, and/or services your loan.
Your servicer may ask if you can pay back the missed payments as a lump sum at the end of your forbearance plan or spread out the missed payments over a number of months. However, many borrowers affected by the current financial crisis will not be able to repay their missed payments all at once. If you cannot afford those options, you are entitled to ask for further assistance, such as a payment deferral, term extension or loan modification, so that you do not default on your loan or risk losing your home to foreclosure.
Depending on who owns, insures, and/or services your loan, your servicer may be able to offer you certain types of loan modifications that are designed to help homeowners who cannot repay all missed payments at once. For example, Fannie Mae, Freddie Mac, and FHA all provide programs that help homeowners get back on track without paying all the missed payments at once. And now, under Banking Law § 9-x, then New Yorkers without a federally-backed loan should be entitled to comparable post-forbearance options. You can find more information about these programs below.
**Post-forbearance options for Fannie Mae and Freddie Mac loans
If you have a Fannie Mae or Freddie Mac mortgage and believe that you have been unlawfully denied a COVID-19-related modification, please file a complaint with the Attorney General's Office.
**Post-forbearance options for FHA loans
If you have an FHA mortgage and believe that you were unlawfully denied a COVID-19 National Emergency Standalone Partial Claim, please file a complaint with the Attorney General's Office.
**Post-forbearance options for VA loans
**Post-forbearance options for RD or RHS loans (USDA loans)
**Post-forbearance options for non-federally-backed loans
The Attorney General wants to make sure that mortgage servicers are helping borrowers to resume payments after a hardship related to the COVID-19 crisis. If you are having trouble getting clear information from your servicer, are not getting appropriate assistance with a repayment plan or loan modification, or are being told that you must pay the missed forbearance payments as one lump sum, please let the Attorney General know by filing a complaint.
New York has also taken steps to pause the foreclosure process in our state courts in order to protect homeowners from losing their home to foreclosure during the COVID-19 crisis. Below are answers to some frequently asked questions about this pause on foreclosure proceedings.
I fell behind on my mortgage because of COVID-19 will I be sued in court?
No, as long as you mail or email to your mortgage servicer a "Hardship Declaration." Under the new COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 ("NYS Foreclosure Prevention Act"), if a homeowner submits a Hardship Declaration, the mortgage company cannot bring a foreclosure action before January 15, 2022. This applies to all mortgages except for those issued, insured, purchased or securitized by New York State (usually known as a SONYMA mortgage).
You can download the Foreclosure Hardship Declaration here: https://www.nycourts.gov/eefpa/".
You should call your mortgage servicer to find out the mailing address or email address where you should send the Hardship Declaration.
Can I be served with a pre-foreclosure notice?
You may receive a pre-foreclosure notice stating the mortgage servicer intends to sue you in foreclosure. Under the NYS Foreclosure Prevention Act, the pre-foreclosure notice must now also include the Hardship Declaration and the mailing and email address to send it to. Again, once you send the Hardship Declaration in to the servicer, the servicer is not allowed to sue you in foreclosure before January 15, 2022. You should keep a copy or picture of the signed form for your records.
If you do receive this pre-foreclosure notice and would like to know your options, you can call the Homeowner Protection Program (HOPP) at 1-855-HOME-456 (1-855-466-3456) for free advice.
I was already sued in foreclosure before the COVID-19 emergency was declared. What happened to my case?
If you are currently experiencing a COVID-related hardship, your foreclosure case cannot move forward as long as you submit a Hardship Declaration to the court. Under the NYS Foreclosure Prevention Act, even if you were sued in foreclosure before COVID-19, if you now have a hardship as a result of COVID-19 and you submit a Hardship Declaration, the mortgage servicer cannot move the case forward until January 15, 2022
The Office of Court Administration is in the process of mailing a Hardship Declaration to every homeowner sued in foreclosure. However, you can download the Foreclosure Hardship Declaration here: https://www.nycourts.gov/eefpa/.
If you would like free advice regarding the status of your case, please call the Homeowner Protection Program (HOPP) at 1-855-HOME-456 (1-855-466-3456).
I was issued a court date to appear previously and it is coming up. Should I go to court?
If you are represented by an attorney, you should call your attorney.
If you are not represented by an attorney, you should call the court and ask what you should do in light of the new law, the NYS Foreclosure Prevention Act. You can find the number for the Court by looking up the phone number for the Supreme Court in the county where your home is located.
Homeowners should always be wary of unsolicited calls where the caller claims to be able to save their home or where they ask for any personal information. Offers to save your home for a fee are fraudulent. Neither the banks, nor HUD-approved housing counseling agencies will charge a fee for assistance.
To protect yourself from being scammed:
If you believe you have been scammed by a foreclosure rescue operator or a debt relief organization, submit a complaint to the New York State Attorney General's Office.