In response to the economic impact caused by the COVID-19 Pandemic, New York Governor Hochul signed into law Senate Bill S671 to assist borrowers in applying for a mortgage loan modification. The new law requires lenders and/or mortgage servicers to provide a single point of contact to a borrower to communicate with the lender and/or mortgage servicer concerning mortgage loan modification, or other loss mitigation alternatives.
How does a single point of contact get appointed?
The new law first requires that a borrower request the lender and/or mortgage servicer to provide a single point of contact. This request can be made in writing or by email. Upon receiving such a request, the lender/servicer is then required to provide the contact information of the point of contact to the borrower within ten (10) business days of receipt. Any change in the single point of contact shall be communicated to the borrower within five (5) business days.
Does this new law apply to every loan?
The new law only applies to a “home loan” that originates after January 2, 2022. A “home loan” as defined by New York Banking Law 6-L is a loan:
- Given to a borrower that is a natural person;
- Secured by a mortgage other than a reverse mortgage on a 1-4 family home, condominium unit, or stock and proprietary lease in a cooperative unit;
- Which is or will be occupied by the borrower as the borrower’s principal residence in the state of New York; and
- The principal of which does not exceed the Fannie Mae conforming loan size limit at the time of origination.
What will the single point of contact assist with?
According to the new law, the single point of contact shall be responsible for:
- Communicating the options available to the borrower for modifying his or her delinquent home loan;
- Assisting the borrower with identifying the documents required to apply for a mortgage loan modification; and
- Providing the borrower with accurate information regarding the status of his or her mortgage loan modification should the borrower choose to apply for a modification of their mortgage.
What benefits does the new law give to borrowers?
The new law will require lenders and/or mortgage servicers to appoint one individual to a borrower who will be responsible for all communications on behalf of the lender and/or mortgage servicer with the said borrower. Having one person knowledgeable about the borrower’s financial situation will help streamline the mortgage loan modification process and increase a borrower’s likelihood of success at saving their home. By assisting borrowers with applying for mortgage loan modifications, more mortgage loan modification agreements will be given and the number of borrowers going into foreclosure will decrease.
The importance of hiring an Experienced Loan Modification Attorney:
Clair Gjertsen & Weathers PLLC is experienced at getting mortgage loan modifications for our clients. We will review your application fully to avoid any future pitfalls or delays in the process. We also understand that the loan modification process can be overwhelming and confusing, and that is why we’re here to assist you. For additional questions regarding the mortgage loan modification process and related foreclosure issues, we invite you to contact Clair Gjertsen & Weathers PLLC by calling 914-472-6202. We look forward to hearing from you.