New York State recently enacted special regulations for homeowners affected by COVID-19 and whose forbearances are ending.

New York Banking Law Section 9-x(3) allows a borrower to select one of three repayment options for a COVID-19 related forbearance. Below are the specific options detailed in Section 9-x(3)(a-d):

1. Extend the term of the loan for the number of months the loan was in forbearance;

2. Repay the arrears accumulated during the forbearance period on a monthly basis;

3. Negotiate a loan modification or any other options that addresses the borrower’s changed circumstances; or

4. Only if the borrower and the lender cannot reasonably agree on a loan modification, the regulated institution must offer to defer the amount of the forbearance into a non-interest bearing balloon loan due at the maturity of the loan or at any time when the loan is satisfied through a refinance or sale.

Source: New York State New Banking Law Section 9-x FAQ

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