No NYS Residential Foreclosures Until May – New Law

On 12/28/2020, the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 became law. 

This law effectively stops all residential foreclosures in NYS until May 1, 2021, but it does nothing about the borrower's obligation to repay their loan.  

 

Do you think that makes sense?

Isn’t that just delaying the inevitable foreclosure crisis?

Shouldn't something be done about the loan too? 

 

Here is how the law works – a homeowner needs to submit a hardship declaration to their lender and magic, no more foreclosure until May.

 

The Details:

o   Either the court or lender (depending on foreclosure status) must provide the borrower with a statement explaining the law.

o   To qualify, a borrower must be suffering a financial hardship including, such as

§  A significant loss of household income;

§  Increase in necessary expenses;

§  Childcare responsibilities;

§  Moving expenses; and/or

§  Other circumstances negatively affecting the borrower’s ability to find meaningful employment.

o   Sample hardship declarations will be available on the Office of Court Administration website.

o   New Foreclosures – If the borrower does not provide the declaration, the lender is required to file all sorts of documents to commence a foreclosure proceeding, including:

§  Affidavit of Service of the Hardship Declaration in English and in the borrower’s primary language.

§  Affidavit of Service of RPAPL 1303 and 1304 notices; and

§  Affidavit of the Petitioner/Petitioner’s agent attesting that the Petitioner or his agent did not receive a Hardship Declaration from the Borrower.

o   Existing Foreclosures – Paused (stayed) for at least 60 days to provide the borrower time to complete and submit the hardship declaration.

o   This also stops foreclosure sales if the case already was decided by the court in a judgment.

 

Make no mistake, this new law does NOT excuse borrowers from paying the mortgage. 

So, what is the point? 

Isn’t it misleading borrowers into digging an even bigger financial hole?

What do you think? 

NYC Council Eliminates "At Will" Employment for the Fast Food Industry

The New York City Council recently passed two (2) bills which, once enacted, will end "at will" employment (employees can be fired for any reason with or without cause) for employees in the NYC fast food industry. Rather, employers in the fast food industry may only lawfully terminate employees for "Just Cause" or for "Bona Fide Economic Reasons" as explained below:

1)  "Just Cause": New York City Council Bill,  Int. No. 1415-A  prohibits fast food industry employers in NYC from terminating an employee's employment, who has been employed longer than thirty (30) days, or reduce their weekly hours by more than 15% without "Just Cause" which is defined as: "failure to satisfactorily perform job duties or misconduct that is demonstrably and materially harmful to the fast food employer’s legitimate business interests." 

Factors used to determine whether an employee was terminated for Just Cause include: whether the employee violated the employer's policy, the employee's knowledge of the applicable rule/policy, training provided to the employee, whether an adequate investigation was conducted and whether progressive discipline was reasonably applied. Notably, absent egregious conduct by the employee, a termination will not considered to be for Just Cause unless the employer has a pre-established written policy on progressive discipline and can demonstrate that it is reasonable and was properly applied with respect to the terminated employee (employers may not rely upon discipline issued more than a year before the termination). Employers must provide the employee, within five (5) days of termination, with a written explanation of all the reasons for termination of employment.

2) "Bona Fide Economic Reasons": New York City Council Bill, Int. No. 1396-A permits fast food industry employers to terminate an employee or reduce their weekly hours by more than 15% for "Bona Fide Economic Reasons" which is defined as "the full or partial closing of operations or technological or organizational changes to the business in response to the reduction in volume of production, sales or profit." An employer's decision to terminate an employee based on Bona Fide Economic Reasons must be supported by the employer's business records. If the employer does possess a Bona Fide Economic Reason for terminating employees, employees must be terminated "in reverse order of seniority." In addition, an employer may not hire a new employee or increase a current employee's hours unless the employer first makes a reasonable effort to reinstate any employees terminated for economic reasons within the prior twelve (12) month period. 

Aggrieved employees may bring a civil action for discharges in violation of these bills or, after January 1, 2022, may bring an arbitration proceeding. Employers bare the burden of proving that the termination was for Just Cause or for Bona Fide Economic Reasons. If the employer fails to meet its burden, the employee may be reinstated, awarded backpay, reasonable attorneys fees and punitive damages. The employer may also be assessed civil penalties. 

It is imperative that fast food industry employers consult with counsel and create/modify applicable polices to ensure they are in compliance with these new bills prior to the effective date (180 days after enacted). 

Employment Sexual Harassment - Case of Interest - Exceeding Petty Slights or Trivial Inconveniences

Back on October 11, 2019, the NYS Human Rights Law was modified with a new standard for actionable employment sex discrimination. The new standard was intended to align NYS more closely with the NYC Human Rights Law. 

The new standard is that conduct that exceeds "petty slights or trivial inconveniences" is actionable. 

As to what that means, the NYC law was interpreted by the Second Circuit Court of Appeals (Federal Court) in Mihalik v. Credit Agricole Cheuvreux North America, Inc., which is the leading case. 

Now, we have a leading case interpreting the NYS law as well by a State Court. 

On December 15, 2020, the NYS Appellate Division decided Franco v Hyatt Corp. and found the following allegations to constitute conduct that exceeds petty slights or trivial inconveniences:

1. Supervisor made repeated sexual advances towards him, including reaching out to touch his face and holding his hand in an elevator while they were alone.
2. Supervisor also initiated conversations that made him uncomfortable, telling him she had a "crush" on him, telling him she was single and twice inviting him to her home to repair "a hole" in her apartment. 
3. Supervisor said she had a tattoo, adding that "You have to undress me to see it." 
4. After victim rebuffed advances, supervisor brought him to the Human Resources manager's office to complain about his work product and that she solicited complaints about him from other coworkers.

Interestingly, this case involved a female harasser of a male subordinate. 

When we train the NYS / NYC Mandatory Sexual Harassment Prevention Course to companies around the country, at sexualharassmenttrainingny.com, we always get push back to the concept that sexual harassment can be female on male. This case is a good reminder that everyone is protected from harassment at work. 

 

PODCAST: Religious Freedom to Discriminate

Town Insists "Whites-Only" church isn't illegal - Or is it? We discuss new legislation that can either get you sued or drive your success.

Listen to this week's podcast HERE. 

NYS Proposes Regulations that Require Appraisers to Learn Fair Housing / Anti-Discrimination

On 12/23/2020, the NYS Department of State proposed mandating fair housing education as a condition of license renewal for appraisers and assistant appraisers.  

The proposed regulations would be at 19 NYCRR 1107.2(b), 19 NYCRR 1107.33(a), (b), and (c), and 19 NYCRR 1107.34. 

In substance, the regulations would require that every licensed or certified appraiser complete an approved course of study in Fair Housing and Fair Lending every two years with the following course topics: 

a) 7 Hour Introduction to Fair Housing and Fair Lending Instruction

b) 4 Hour Update on Fair Housing and Fair Lending Instruction

Now, we are in the public comment period until 02/21/2021. To make your comments, email the regulator at david.mossberg@dos.ny.gov

While we are very encouraged by increased fair housing and anti-discrimination trainings being required in NYS, we are concerned with how specific the subtopics of education are and how they offer no explanation as to what exactly the government is looking for within each subtopic. We are also concerned about how this requirement will impact federal government contractor appraisers who must follow Executive Order 13950 on Combating Race and Sex Stereotyping and are therefore restricted on engaging in trainings on unconscious bias or implicit bias to the extent that "it teaches or implies that an individual, by virtue of his or her race, sex, and/or national origin, is racist, sexist, oppressive, or biased, whether consciously or unconsciously," per the US Department of Labor. We hope that these issues will be addressed before this regulation is finalized. 

To the specific subtopic requirements, under topic a), the subtopics are as follows:

(1) Fair housing, fair lending requirements, and the history of lending 2 hours

(a) What is fair housing?

(b) What is fair lending?

(c) Roadblocks to fair housing/lending

(d) Federal laws Civil Rights Act of 1866

Civil Rights Act of 1964 Fair Housing Act of 1968

Supreme Court

The Housing and Community Development Act of 1974

The Fair Housing Amendment Act of 1988

Other legislation

- Community Reinvestment Act

- Equal Credit Opportunity Act

- Home Mortgage Disclosure Act

- Real Estate Settlement Procedures Act American Disabilities Act

(ADA)

(e) New York State Law - Executive Law includes the Civil Rights

Law of the State (NY Human Rights Law - Article 15)

- Additional protected classes; age and marital status

- Includes residential property, land commercial property and credit

transactions

(f) Local Regulations

(g) Exemptions and Exceptions

- Senior Citizen Housing

- Drug users and alcohol abusers

- Two family exemption

(h) USPAP/FIRREA

(i) Enforcement and Duties

-U.S. Department of Justice

-Department of Housing and Urban Development (HUD)

-New York State Department of State, Division of Licensing

-New York State Division of Human Rights

-Administrative Law Judges

-Federal and State Courts

-Responsibilities of individual appraisers

(j) Penalties New York State Federal Government

(2) Development of appraisal (Standard 1 USPAP) 1.5 hours

(a) Bias and discrimination in the analysis in development

(b) Documentation of sources

(c) Secondary market guidelines Fannie Mae, Freddie Mac, HUD,

VA

(3) Reporting of appraisal results (Standard 2 USAP) 1.5 hour

(a) Bias and discrimination in the report

(b) Documentation of sources

(c) Secondary market guidelines Fannie Mae, Freddie Mac, HUD,

VA

(4) Case studies 2 hours

(a) Neighborhood issues

(b) Improvement issues

(c) External obsolescence

(d) Conscious and Unconscious bias

Under topic b), the subtopics are as follows:

(1) Fair housing, fair lending requirements, and the history of lending 1 hour

(a) What is fair housing?

(b) What is fair lending?

(c) Roadblocks to fair housing/lending

(d) Federal laws Civil Rights Act of 1866

Civil Rights Act of 1964 Fair Housing Act of 1968

Supreme Court

The Housing and Community Development Act of 1974

The Fair Housing Amendment Act of 1988

Other legislation

- Community Reinvestment Act

- Equal Credit Opportunity Act

- Home Mortgage Disclosure Act

- Real Estate Settlement Procedures Act American Disabilities Act

(ADA)

(e) New York State Law - Executive Law includes the Civil Rights

Law of the State (NY Human Rights Law - Article 15)

- Additional protected classes; age and marital status

- Includes residential property, land commercial property and credit

transactions

(f) Local Regulations

(g) Exemptions and Exceptions

Senior Citizen Housing

Drug users and alcohol abusers

Two family exemption

(h) USPAP/FIRREA

(i) Enforcement and Duties

-U.S. Department of Justice

-Department of Housing and Urban Development (HUD)

-New York State Department of State, Division of Licensing

-New York State Division of Human Rights

-Administrative Law Judges

-Federal and State Courts

-Responsibilities of individual appraisers

(j) Penalties New York State Federal Government

(2) Development of appraisal (Standard 1 USPAP) 1 hour

(a) Bias and discrimination in the analysis

(b) Documentation of sources

(c) Secondary market guidelines Fannie Mae, Freddie Mac, HUD,

VA

(3) Reporting of appraisal results (Standard 2 USAP) 1 hour

(a) Bias and discrimination in the report

(b) Documentation of sources

(c) Secondary market guidelines Fannie Mae, Freddie Mac, HUD,

VA

(4) Case studies 1 hour

(a) Neighborhood issues

(b) Improvement issues

(c) External obsolescence

(d) Conscious and Unconscious bias