A few New York lawmakers are proposing additional relief for homeowners who are struggling financially amid the COVID-19 pandemic. They say the mortgage loan forbearance measures already in place through the federal and state governments are simply not enough.
On Monday, State Senator Todd Kaminsky and State Senate Housing Chair Brian Kavanagh proposed a measure now endorsed by Congresswoman Kathleen Rise to essentially prolong the life of mortgage loans, adding missed payments on to the end of the loan life.
Under the federal Coronavirus Aid Relief and Economic Security (CARES) Act, homeowners are offered three months of forbearance on federally-backed mortgage loans. New York Governor Cuomo also signed an executive order giving all homeowners in the state forbearance for 90 days.
However, at the end of these 90 days or 180 days—depending on the loan type—homeowners are expected to pay all missed payments in a lump sum at their next due date.
“I’m hearing from people that are dreading it,” Kaminsky said, according to an article published on WCBS 880 News Radio. “They’re saying, ‘I don’t know how this is possible if I don’t have the money now to make payments, how am I going to suddenly come up with the money when this emergency period ends and have three months’ worth of money just sitting around.’ I mean it’s ridiculous.”
Instead, the proposed legislation would simply add the missing payments onto the end of the loan, extending the loan life by three months.
“I’ve heard from countless homeowners who are struggling to make mortgage payments due to the COVID-19 pandemic,” Rice said in a press release earlier this week. “During this unprecedented crisis, Long Islanders should be solely focused on keeping their families safe and healthy, not worried about losing their homes.”
The three New York lawmakers wrote in an article on Newsday, “Our goal as policymakers should be to offer homeowners as many flexible options as possible to suit each individual family’s needs.”
They continued, “This [proposal] allows homeowners to catch up on their payments at their convenience, without fear of foreclosure actions or damage to their credit. For many, it could be the difference between losing their homes and keeping them.”
While the state senate is currently not in session, state lawmakers are pushing to vote on this and other bills aimed at helping New Yorkers weather the current crisis.
Another state senator, David Carlucci, is promoting a bill aimed at preventing individuals from having to turn over their federal stimulus payments to creditors, according to a recent article from Spectrum News.