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Showing posts with label coronavirus legal updates. Show all posts
Showing posts with label coronavirus legal updates. Show all posts
Thursday, March 26, 2020
Wednesday, March 25, 2020
Businesses devastated by quarantine should proactively negotiate forbearances with their lenders to avoid foreclosure and monetary judgments.
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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?
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:
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.
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.
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.
Tuesday, March 24, 2020
As of March 24, 2020, both the Nassau County and Suffolk County Clerks have suspended in-person access to their offices. As previously reported on our blog, the Chief Administrative Judge of the Courts has ordered that county clerks shall no longer accept any filings, electronic or otherwise. It's still an open question whether this precludes the electronic recording of documents, but there is no doubt that title insurance is a whole lot more complicated right now.
How will your title insurer examine title and issue a policy if they cannot pull non-electronic records? While some clerks have a more robust electronic system than others, can title insurers be confident that the records are up to date given limited staffing and restrictions on filing?
What about the period between closing of title and the recording of your deed? It has always been theoretically (and unfortunately in some instances, actually possible) for a grantor to encumber title to the property you just bought after your title insurer had already performed its search, cleared for closing, and locked in its policy. If there is an even further extended period between closing and recording due to coronavirus closures, it is more vital than ever to ensure that you are protected against these unseen encumbrances.
Traditionally this "GAP Period" requires a special endorsement that protects the purchaser against encumbrances that occur after closing but before the deed is recorded, but will title insurers be willing to insure such an unknown and potentially length time period?
If you are closing in the next few weeks, make sure your attorney has all these questions answered.
How will your title insurer examine title and issue a policy if they cannot pull non-electronic records? While some clerks have a more robust electronic system than others, can title insurers be confident that the records are up to date given limited staffing and restrictions on filing?
What about the period between closing of title and the recording of your deed? It has always been theoretically (and unfortunately in some instances, actually possible) for a grantor to encumber title to the property you just bought after your title insurer had already performed its search, cleared for closing, and locked in its policy. If there is an even further extended period between closing and recording due to coronavirus closures, it is more vital than ever to ensure that you are protected against these unseen encumbrances.
Traditionally this "GAP Period" requires a special endorsement that protects the purchaser against encumbrances that occur after closing but before the deed is recorded, but will title insurers be willing to insure such an unknown and potentially length time period?
If you are closing in the next few weeks, make sure your attorney has all these questions answered.
Beyond injuring others and being a terrible person, have you looked-up the exposure for violating Executive Order 202.8.
To remind you, 202.8 is what provides, in pertinent part, that "[e]ach employer shall reduce the in-person workforce at any work locations by 100% no later than March 22 at 8 p.m."
As to exposure for violating 202.8, it provides that "[a]ny business violating the above order shall be subject to enforcement as if this were a violation of an order pursuant to section 12 of the Public Health Law." Then, section 12 of the Public Health Law provides for "a civil penalty of not to exceed two thousand dollars for every such violation" for the first violation and a penalty "not to exceed five thousand dollars for a subsequent violation." However, if your violation "results in serious physical harm to any patient or patients, the penalty is "not to exceed ten thousand dollars."
So, if you infect someone, you are getting charged with a $10K penalty per violation.
Oh, by the way, the State can also get an injunction against your continued violations and potentially shut down your business, remote or otherwise, with that injunction.
Don't be crazy and ignore the order. Instead, if you believe you are essential, apply for a designation here.
To remind you, 202.8 is what provides, in pertinent part, that "[e]ach employer shall reduce the in-person workforce at any work locations by 100% no later than March 22 at 8 p.m."
As to exposure for violating 202.8, it provides that "[a]ny business violating the above order shall be subject to enforcement as if this were a violation of an order pursuant to section 12 of the Public Health Law." Then, section 12 of the Public Health Law provides for "a civil penalty of not to exceed two thousand dollars for every such violation" for the first violation and a penalty "not to exceed five thousand dollars for a subsequent violation." However, if your violation "results in serious physical harm to any patient or patients, the penalty is "not to exceed ten thousand dollars."
So, if you infect someone, you are getting charged with a $10K penalty per violation.
Oh, by the way, the State can also get an injunction against your continued violations and potentially shut down your business, remote or otherwise, with that injunction.
Don't be crazy and ignore the order. Instead, if you believe you are essential, apply for a designation here.
If you learn that someone is infected with Coronavirus in a unit, do not notify other tenants or conduct cleaning.
Instead, contact your local (County / City) and follow their guidance. Do nothing else.
You are ill-equipped to create a protocol and may further injure your tenants by acting imprudently.
There are privacy concerns, cleanliness concerns, isolation concerns, testing concerns and the like.
Therefore, if you learn of a positive diagnosis in your property, contact your local health department and follow their guidance.
Instead, contact your local (County / City) and follow their guidance. Do nothing else.
You are ill-equipped to create a protocol and may further injure your tenants by acting imprudently.
There are privacy concerns, cleanliness concerns, isolation concerns, testing concerns and the like.
Therefore, if you learn of a positive diagnosis in your property, contact your local health department and follow their guidance.
While New York State Courts are currently not permitting individuals or businesses to commence new matters (with extremely limited exceptions), federal courts (Eastern District of New York and Southern District of New York) remain open. Individuals or businesses can, thus, still file new cases in federal court.
Potential causes of action that can be filed in federal court include, but are not limited to:
Potential causes of action that can be filed in federal court include, but are not limited to:
- Wage and Hour claims pursuant to the Fair Labor Standards act for unpaid wages, overtime, etc.;
- Bankruptcy petitions;
- Discrimination/Retaliation claims under Title VII (race, age, sex, religion, disability etc.);
- Interference with rights under the Family Medical Leave Act.
Monday, March 23, 2020
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.
The Chief Administrative Judge of the Courts has issued an order forbidding the filing of all non-essential papers in county clerks and court clerks. This order is statewide and will have far-reaching consequences.
The Order, a copy of which can be found HERE, states:
Follow the link above to find a list of essential matters, most of which focus on the protection of the life, safety, and well-being of people.
The consequences of this Order are profound. For example, the Suffolk County and Nassau County clerks were both operating on a limited basis, but were still operating. The State's electronic court filing system was still accepting filings which enabled parties to continue litigating so long as it didn't require judicial intervention. New York County's online recording system, ACRIS, was still accepting electronic filings. Based on the wording of this Order, all of that ends today.
Despite this Order, Lieb at Law will proceed with our litigation matters to the maximum extent possible - as long as it doesn't require judicial intervention, we will push forward.
Look for a blog from Steven Siliato later today detailing the effects this Order will have on real estate transactions. Title examination? Race notice recording? GAP title insurance?
The Order, a copy of which can be found HERE, states:
Pursuant to the authority vested in me, in light of the emergency circumstances caused by the continuing COVID-19 outbreak in New York State and the nation, and consistent with the Governor of New York's recent executive order suspending statues of limitation in legal matters, I direct that, effective immediately and until further order, no papers shall be accepted for filing by a county clerk or a court in any matter of a type not included on the list of essential matters attached as Exh. A. This directive applies to both paper and electronic filings.
Follow the link above to find a list of essential matters, most of which focus on the protection of the life, safety, and well-being of people.
The consequences of this Order are profound. For example, the Suffolk County and Nassau County clerks were both operating on a limited basis, but were still operating. The State's electronic court filing system was still accepting filings which enabled parties to continue litigating so long as it didn't require judicial intervention. New York County's online recording system, ACRIS, was still accepting electronic filings. Based on the wording of this Order, all of that ends today.
Despite this Order, Lieb at Law will proceed with our litigation matters to the maximum extent possible - as long as it doesn't require judicial intervention, we will push forward.
Look for a blog from Steven Siliato later today detailing the effects this Order will have on real estate transactions. Title examination? Race notice recording? GAP title insurance?
Governor Cuomo has consolidated the patchwork of local foreclosure and eviction laws bubbling up in the wake of the COVID-19 quarantines - and it's a big one.
Executive Order 202.8 states:
There shall be no enforcement of either an an eviction of any tenant, residential or commercial, or a foreclosure of any residential or commercial property for a period of ninety days.
Ninety days from the date of the Order puts us out to June 18, 2020.
One noteworthy aspect of this Order is its application to both residential and commercial properties.
One noteworthy aspect of this Order is its application to both residential and commercial properties.
It is vital to note, however, that this does not mean you cannot be in default of your rent or mortgage for the ninety day period. It simply states that there shall be no enforcement of evictions or foreclosures. If you are delinquent on your rent or mortgage during the term of this order, your landlord or lender could commence an eviction or foreclosure proceeding after the order expires.
The interplay of this Executive Order with Executive Order 202.9 (see our prior blog about that, here) creates an opportunity for borrowers to leverage a forbearance with their lender ensuring that they are not delinquent on their mortgage on June 18, 2020.
