Month: September 2020

It has come to the attention of the New York State Department of Financial Services (“DFS”) that certain counties, cities and other municipalities in New York State, by ordinance or otherwise, are requiring mortgage lenders and servicers, (“Mortgagees”), to register mortgages declared to be in default by the Mortgagee with the county, city or other municipality in which the real property is situated. As a requirement for registration, as well as for any renewal of such registration, the Mortgagee is required to pay a fee to the county, city, municipality or its agent (a “Registration Fee”). It has also come to the attention of DFS that such Registration Fees have been charged to, or collected from, mortgagors’ accounts by some Mortgagees.

Section 419.5 of the Superintendent Regulations (3 NYCRR Part 419), only permits Mortgagees to collect certain specified types of fees from a mortgagor, consisting of attorney’s fees, late and delinquency fees, property valuation fees, and fees for services actually rendered to a mortgagor when such fees are reasonably related to the cost of rendering the service to the borrower. A Registration Fee is neither an attorney fee, late or delinquency fee, property valuation fee, or fee for a service rendered to a mortgagor. Therefore, a Registration Fee may not be charged to, or collected from, a mortgagor under Part 419.

Mortgagees that are subject to the requirements of Part 419 and who, at any time, have collected any Registration Fees from a mortgagor, are hereby directed and instructed to refund and credit the full amount of such Registration Fees to the account of the mortgagor. If the Registration Fee was charged to a mortgagor’s account but was not collected, Mortgagees are hereby directed and instructed to remove and reverse any and all Registration Fees charged to the mortgagor’s account.

Mortgagees are also directed and instructed to create a log of all mortgagors that were either charged, or paid any Registration Fee to any such Mortgagees at any time, containing details of the full amounts of such Registration Fees, whether collected or charged, and the date(s) the full amounts of collected Registration Fees were refunded and credited to the mortgagors’ accounts, and the date(s) that any charged Registration Fees were removed or reversed from the mortgagors’ accounts, for inspection during DFS’s next examination of the Mortgagee.

Should you have any questions regarding this letter, please contact Rholda Ricketts at (212) 709-5540.

The Trump administration said it will use its quarantine authority to keep renters in their homes during the coronavirus pandemic as a way to prevent an eviction crisis that could worsen economic strains. Bloomberg first reported the news.

The Centers for Disease Control and Prevention (CDC) plans to temporarily halt evictions of consumers earning no more than $99,000 a year “to prevent the virus from spreading, a senior administration official said Tuesday. The policy will take effect immediately,” according to Bloomberg.The administration acted independently after congress failed to decide whether or not to extend the eviction moratorium that ended at the end of July, Bloomberg reported.”The administration is acting unilaterally after failing to reach a deal with lawmakers over another round of stimulus relief funding, aimed in part at keeping renters in their homes.”An unnamed “administration official” told Bloomberg‘s Jennifer Jacobs and Justin Sink that to obtain the relief, renters must assert they are incapable of paying their rent or are likely to become homeless if kicked out of their property.The publication went on to report, this afternoon, that “individuals who received a coronavirus stimulus check earlier this year also qualify for the protection, as do couples who jointly file their taxes and expect to earn less than $198,000.”

The move, according to the reporters, marks an “unprecedented use of executive authority,” and might face legal challenges from landlords. Many property owners have said they are losing income from rental properties. (Some have already engaged in state-level lawsuits).

Senior administration officials told reporters from The Hill that it will be up to local courts to adjudicate eviction filings, but that the federal order should protect all tenants who qualify for the program should they face judicial proceedings.

But administration officials told Bloomberg they have the ability under a federal law that allows the CDC to order emergency measures when it determines that state and local governments haven’t taken sufficient steps to prevent the spread of a communicable disease.

A White House lawyer who also is not identified told Bloomberg that CDC Director has authority to “take measures he deems reasonably necessary to prevent the spread of communicable diseases.”

“President Trump is committed to helping hardworking Americans stay in their homes and combating the spread of the coronavirus,” White House spokesman Brian Morgenstern said in a statement Tuesday afternoon. “Today’s announcement from his Administration means that people struggling to pay rent due to coronavirus will not have to worry about being evicted, and risk further spreading of or exposure to the disease due to economic hardship.”Housing advocates also have begun responding to the action.

“While an eviction moratorium is an essential step, it is a half-measure that extends a financial cliff for renters to fall off of when the moratorium expires and back rent is owed,” Diane Yentel, President of the National Low Income Housing Coalition (NLIHC), told The Hill. “This action delays but does not prevent evictions. Congress and the White House must get back to work on negotiations to enact a COVID-19 relief bill with at least $100 billion in emergency rental assistance.”

The Department of Housing and Urban Development announced recently it would extend an eviction and foreclosure ban from properties with mortgages backed by the FHA, and previous ban on foreclosures and evictions from homes with mortgages backed by Fannie Mae and Freddie Mac also has been extended through the end of 2020.