COVID-19 Foreclosure Relief for New York Homeowners

iStock-1275851301.jpg

New York State has passed one of the strongest foreclosure moratoriums in the country, protecting homeowners like you from losing your home during a pandemic that has left millions without any financial safety net. 

Under the NYS Eviction and Foreclosure Prevention Act, homeowners can sign a declaration stating that they are experiencing a COVID-related hardship that prevents them from paying their mortgage in full, and receive protection from foreclosure until May 1, 2021. This applies to mortgages, taxes, or tax lien sales. The law prevents pending foreclosures from continuing and new legal actions. Pending foreclosure actions will automatically be paused for 60 days to give homeowners the opportunity to exercise these protections. The law also includes similar protections for tenants against eviction.

While these protections delay foreclosure, they do not forgive payments or include any financial assistance to homeowners. We urge you to try to maintain your current mortgage payments, to request forbearance from your lender if you are unable to pay, and to reach out to us to access free legal advice or housing counseling to help you prevent foreclosure. 

Foreclosure Protections under the new law:

If you are a property owner of fewer than 10 properties not under a corporate entity, and are experiencing a qualifying hardship, you are protected from foreclosure under the new law. By submitting a hardship declaration to your mortgage lender, you’re able to protect yourself against foreclosure on your mortgage. The new law also prohibits local governments from beginning or continuing a tax foreclosure against you and selling your tax lien. This applies only to residential properties and excludes vacant and abandoned properties. 

As a homeowner, you may declare a hardship if you’ve experienced: 

  • Significant loss of income due to the COVID-19 pandemic, which includes reduced rent collection;

  • Increased necessary out-of-pocket expenses related to essential work, health costs due to COVID-19, childcare, or care for an elderly, disabled or sick family member during the pandemic;

  • An inability to obtain meaningful employment related to the COVID-19 pandemic that has negatively affected your household income;

  • Moving expenses and difficulty securing alternative housing, or if moving will pose significant health risks;

  • Or defaults on rental payments from one or more tenants since March 1, 2020.

This law also states that your lender may not negatively report the fact that you filed a hardship declaration to any credit agency. The hardship declaration form can be found here.

To find out more about the new law, see the FAQ on the website of the New York State Attorney General. You can also contact our Homeowner Hub at 855-HOME-456 (855-466-3456) for homeowners anywhere in New York State for a referral to a free, trusted housing counselor or legal service provider. 

Cristian Salazar