New York’s COVID-19 ban on residential foreclosures is set to end Aug. 31, and lawmakers and housing advocates are urging homeowners who have fallen behind on their mortgages to seek out other protections.
State legislators are discussing a potential extension of the foreclosure moratorium for those facing COVID-19 hardships, though it would most likely need to be amended in light of a recent Supreme Court decision striking down a key component of the state’s eviction ban, State Sen. Brian Kavanagh (D-Manhattan) said Friday. Lawmakers expect to discuss the matter with Lt. Gov. Kathy Hochul after she takes office as governor on Tuesday, he said.
In the meantime, the state is preparing to launch its federally funded Homeowner Assistance Fund next month, once it gets federal approval for its plan, Kavanagh said. The program, which is expected to include financial assistance, counseling and other help for homeowners, is funded by a $540 million infusion from the federal American Rescue Act Plan of 2021, passed in March.
"We’re really trying to ensure that nobody loses their home or suffers a long-term economic hardship as a result of COVID-19," Kavanagh said. "The goal is not just to delay potential foreclosure but really ensure that homeowners have the resources they need."
Housing advocates said homeowners also can benefit from a new rule enacted by the federal Consumer Financial Protection Bureau, which takes effect Aug. 31. That measure, which will remain in effect until Jan. 1, requires most lenders to offer loan modifications and other protections to people with COVID19 hardships whose primary homes are at risk of foreclosure, said Leslie Mendoza, an attorney with Lieb at Law PC in Smithtown.
The state’s temporary foreclosure ban "merely delays any kind of discussion between the borrower and the lender in terms of resolving the delinquencies," Mendoza said. By contrast, she said, the CFPB rule should help many homeowners get a modified loan, as long as they qualify for one.
Homeowners also can benefit from mortgage forbearance programs, Mendoza said. Such programs can reduce interest rates, extend loan terms and move outstanding debt to the end of the loan term, in some cases. Homeowners whose mortgages are insured by the Federal Housing Administration have until Sept. 30 to apply for forbearance, according to the agency. Those with federally backed Fannie Mae and Freddie Mac loans have not been given an application deadline.
Those who are struggling to pay their mortgages should contact their loan servicer to find out who owns their loan and what rules apply, said Kathleen Maher, a Hempstead-based staff attorney with the nonprofit legal advocacy group Nassau Suffolk Law Services.
One of Maher’s clients, Nagelande Lerebours, a special-education teacher who lives in Baldwin with her three children, ages 12 to 16, and her fiancé, Dwayne Evans, has been working to save her home from foreclosure since 2018, after she went through a difficult divorce.
Lerebours's loan was modified in July and the lender withdrew its foreclosure lawsuit earlier this month, Maher said.
"I had to fight, and the bank wasn’t making it easy for me," Lerebours said. "All my investment went into this home, everything…. It’s a blessing and a relief that I can turn the key and walk into my home and call it my home."
Maher urged struggling homeowners to keep in touch with their lenders and seek out help from nonprofit housing and legal advocacy agencies, including those affiliated with the state Homeowner Protection Program: "This would be just about impossible to navigate on one’s own."
Where to find help
• Request free help from a federally certified housing counselor or attorney through the state-funded Homeowner Protection Program: 855-HOME-456 or homeownerhelpny.com
• Find a federally approved housing counselor: nwsdy.li/counselor
• Learn more about federal mortgage relief options, and find out who owns your loan: nwsdy.li/federal
• Read about the planned New York State Homeowner Assistance Fund, expected to launch in September: hcr.ny.gov/homeowners