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Showing posts with label NYS Department of Financial Services. Show all posts
Showing posts with label NYS Department of Financial Services. Show all posts

Wednesday, March 25, 2020

NYS 90-Day Mortgage Relief Plan – DFS Regulation Issued

90-day mortgage relief , coronavirus
NYS 90-Day Mortgage Relief Plan – DFS Regulation Issued
On March 24, 2020, the details of NYS’ COVID-19 mortgage help came to light.

Specifically, the New York State Department of Financial Services promulgated 3 NYCRR 119 in response to Governor Cuomo’s Executive Order 202.9.

Here is a Q&A about the details: 

What is the COVID-19 Relief Program?
The COVID-19 Relief Program requires DFS regulated institutions to make applications for a 90-day forbearance of any payment due on a residential mortgage of New York Property to individuals residing in New York and who demonstrates financial hardship as a result of the COVID-19 pandemic.

How long is the Program effective?
The Program shall be in effect until June 19, 2020, but may be extended if necessary.

Are mortgage payments waived under the Program?
The Program does not expressly require institutions to waive mortgage payments.

When can a borrower apply for the Program?
On or before April 3, 2020, regulated institutions are required to e-mail, publish on their website, mass mail, or broadly communicate to customers how to apply for COVID-19 relief and provide their contact information.

Which institutions are covered under the Program?
DFS-regulated institutions are covered under the Program. They are New York regulated banking organizations covered by the New York Banking Law and all New York regulated mortgage servicers regulated by DFS. This means that the program does not cover National Association lenders (federally charted banks). The Program does not apply to mortgage loans made, insured, or securitized by the United States, Government Sponsored Enterprise, Federal Home Loan Bank, and lenders, issuers, servicers or trustees of such loans, as well as, servicers for the Government National Mortgage Associations.

Does the Program cover commercial loans?
The Program does not apply to any commercial mortgage or other loans not described in 3 NYCRR 119.

Aside from a 90-day forbearance, is there additional relief available under the Program?
From today until June 19, 2020, or until extended, lenders will provide the following relief to individuals who experience financial hardship from COVID-19:
  • Waive fees for use of automated teller machines (ATMs);
  • Waive overdraft fees; and
  • Waive credit card late payment fees.
Institutions are not limited to offering the above types of relief and are encouraged to take additional reasonable and prudent actions to COVID-19 affected individuals.

Who is qualified to receive COVID-19 relief?
Regulated institutions must develop their own clear, easy to understand, and reasonably tailored criteria for assessing qualified individuals. The qualifications and process for applying for relief should be published by institutions on or before April 3, 2020.

How are applications processed under the Program?
Regulated institutions are required to develop and implement procedures for expedited processing where they must process and respond to requests immediately and no later than 10 days of receipt of all information reasonably required to process the application. All determinations must be communicated to the applicant in writing and must explain the reasons if the application was denied and a statement that the applicant may file a complaint with DFS if he believes the application was wrongly denied.

Is the Program ready to launch?
More clarity concerning the Program is expected once regulated institutions have published their process for applying for relief. Individuals who are seeking mortgage assistance as a result of the COVID-19 pandemic are encouraged retain counsel as soon as possible to negotiate with their mortgage lenders or servicers. Don’t assume you qualify and get all terms in writing before you stop making mortgage payments.



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Monday, March 23, 2020

NYS Mortgage Relief Plan – Guidance from DFS

coronavirus , coronavirus legal updates
NYS Mortgage Relief Plan – Guidance from DFS
Following Governor Cuomo’s announcement on a 90-day mortgage relief plan for borrowers affected by the novel coronavirus (COVID-19), the New York State Department of Financial Services (DFS) issued Guidance to regulated financial institutions concerning its implementation. The Guidance urges all regulated financial institutions to do their part in curtailing the effects of COVID-19 on consumers and small businesses by:
  • Waiving overdraft fees;
  • Providing new loans on favorable terms;
  • Waiving late fees for credit card and other loan balances;
  • Waiving automated teller machine (ATM) fees;
  • Increasing ATM daily cash withdrawal limits;
  • Waiving early withdrawal penalties on time deposits;
  • Increasing credit card limits for creditworthy customers;
  • Offering payment accommodations, such as allowing loan customers to defer payments at no cost, extending the payment due dates or otherwise adjusting or altering terms of existing loans, which would avoid delinquencies, triggering events of default or similar adverse consequences, and negative credit agency reporting caused by COVID-19 related disruptions;
  • Ensuring that consumers and small businesses do not experience a disruption of service if financial institutions close their offices, including making available other avenues for consumers and businesses to continue to manage their accounts and to make inquiries;
  • Alerting customers to the heightened risk of scams and price gouging during the COVID-19 disruptions, and reminding customers to contact their financial institutions before entering into unsolicited financial assistance programs; and
  • Proactively reaching out to customers via app announcements, text, email or otherwise to explain the above-listed assistance being offered to customers.

Regulated financial institutions are also urged “to work with and provide accommodations to their borrowers during this unprecedented global emergency to the extent reasonable and prudent.” This includes holding off on taking adverse action for defaults. Regulated financial institutions include mortgage bankers, mortgage loan servicers, banks and trust companies, among others. For a full list of DFS-regulated financial institutions, click HERE.

While the efforts of DFS and New York State are definitely acknowledged and appreciated, Borrowers should be aware that the Guidance is simply that, guidance. The Guidance does not legally require financial institutions to take the above-listed actions and only encourages them to do so.

Stay tuned for more updates from New York State and DFS as to specific procedures on the NYS mortgage relief plan.



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Wednesday, March 18, 2020

Attention Insurance Companies - DFS Puts More on Your Plate

compliance , coronavirus
Attention Insurance Companies - DFS Puts More on Your Plate
The Department of Financial Services' Circular No. 5 (2020) is making its rounds and requires all entities regulated by DFS to submit a COVID-19 Preparedness Plan. All regulated entities are required to submit the plan on or before Thursday, April 9, 2020.

DFS is requiring the Preparedness Plan to account for both operational and financial risks. On the operational side, the plan should include:
  1. Preventative measures tailored to the entity’s specific profile and operations to mitigate the risk of operational disruption, which should include identifying the impact on consumers and vendors;
  2. A documented strategy addressing the impact of the outbreak in stages, so that the entity’s efforts can be appropriately scaled, consistent with the effects of a particular stage of the outbreak;
  3. Assessment of all facilities, systems, policies and procedures necessary to continue critical operations and services if members of the staff are unavailable for longer periods or are working off-site, including the effectiveness and security of remote access;
  4. Employee protection strategies, critical to sustaining an adequate workforce during the outbreak, including employee awareness and steps that employees can take to reduce the likelihood of contracting COVID-19;[1]
  5. Assessment of the preparedness of critical third-party service providers and suppliers;
  6. Development of a communication plan to effectively communicate with consumers and vendors, and to deliver important news and instructions to employees, along with establishing forums for questions to be asked and addressed;
  7. Testing of the plan to ensure that the policies, processes, and procedures are effective; and
  8. Governance and oversight of the plan, including identifying the critical members of a response team, to ensure ongoing review and updates to the plan, including the tracking of relevant information from government sources and the entity’s own monitoring program.
On the financial risk side, the plan should include: 
  1. Assessment of the overall impact of COVID-19 on reserve requirements, consumers’ ability to make timely premium payments, and resources required to timely process claims;
  2. Assessment of the credit risk of counterparties and business sectors impacted by COVID-19;
  3. Assessment of the credit exposure to counterparties and business sectors impacted by COVID-19 arising from investing and other financial transactions;
  4. Assessment of the scope and the size of admitted assets or other investments adversely impacted by COVID-19 that currently are in, or potentially may move to, non-performing/delinquent status, including consideration of stress testing and/or sensitivity analysis of such assets or investments;
  5. Assessment of the valuation of assets and investments that may be, or have been, impacted by COVID-19; and
  6. Assessment of the overall impact of COVID-19 on earnings, profits, capital, and liquidity.
A full copy of Circular No. 5 (2020) can be found HERE. 

If it seems that DFS is just here to put more on your plate when you need it least, DFS has also issued a temporary COVID-19 relief order which improves the ability of banks and insurers to operate remotely. A full copy of the temporary relief order can be found HERE. 



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Wednesday, January 21, 2015

Ocwen Financial May Lose its Mortgage License

California Department of Business Oversight , Foreclosure
Ocwen Financial May Lose its Mortgage License
By the end of this year, Ocwen Financial, one of the largest mortgage servicers in the U.S., may lose its mortgage license in California.

Ocwen has been subjected to numerous investigations over the years regarding improper foreclosures, misplaced and mislabeled borrower documentation, billing issues, and overall failure to comply with federal and state laws and regulations. In December, Ocwen settled an ongoing investigation by the NYS Department of Financial Services (DFS) by agreeing to pay $100 million, which was to be used to support foreclosure defense programs and other relief and $50 million to Ocwen borrowers who reside in New York. As a result, not only did the company’s chairman step down from his position, but DFS will continue to monitor Ocwen in the upcoming years for further unlawful conduct. Although this settlement greatly impacted borrowers in New York, it was held as a victory for borrowers all over the country because it was supposed to put Ocwen in check and to stop it from continuing its cycle of financial abuse.

Unfortunately, the story does not end there. California now wants to suspend Ocwen’s mortgage license in the state as a result of Ocwen’s failure to provide mandatory documentation to the Department of Business Oversight, which is responsible for determining whether Ocwen is complying with state regulations in California. Ocwen issued a press release on January 13, stating that it is committed to resolving the issues in California, especially since its shares are crashing as a result of the news. It is crucial that Ocwen turns its business practices around and finally provide high quality assistance to its borrowers. Otherwise, it will surely fail.

Settlement conferences will begin in February. If nothing is resolved, Ocwen will not be able to do business in California for at least a year. If that happens, Ocwen may not be able to survive such a huge blow.
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