NEW YORK – New York Attorney General Letitia James has sent a letter to mortgage servicers in the state offering a reminder of their obligations to provide relief to certain homeowners as a result of the pandemic.
In a letter to mortgage servicers operating in New York and mortgage industry trade associations, James reiterated her expectation that they participate in New York’s recovery from the COVID-19 pandemic by providing long-term relief to homeowners in accordance with New York state law, as well as with federal regulations and guidelines.\
James also said the AG’s office Mortgage Enforcement Unit (MEU) will be helping to oversee the distribution of New York state’s Homeowner Assistance Fund (HAF).
‘Great’ Distress
“While the support provided by the Homeowner Assistance Fund is substantial, the number of homeowners facing COVID-related distress is far greater,” said James. “To help the greatest number of homeowners and ensure that the family home stays in the family, HAF funds must supplement rather than replace the mortgage industry’s own efforts. My office will continue to ensure that mortgage servicers comply with their legal obligations as we work to protect New York families and their homes. If we plan to rebuild our economy, we must ensure that homeowners are granted the relief they need.”
James also outlined what she said are the “expectations” of her office for mortgage servicers as forbearance plans expire, including that servicers comply with streamlined modification programs now required by various federal agencies and government-sponsored enterprises and provide comparable relief (pursuant to New York state Banking Law § 9-x and New York’s mortgage servicing regulations) to homeowners whose mortgages are owned by private investors through private label securities or by banks in their own portfolios.
James said servicers must invest in adequate staffing and improve their customer communications, so that they can handle any surge in requests for assistance. Servicers’ failure to prepare for this moment will be taken into account by the OAG, according to the letter.