New York Enacts Provisions Regarding Home Loan Modifications
The state of New York has recently added a section to its banking law regarding delinquent home loan modifications. These provisions are effective on January 2, 2022.
The new provisions require that if a borrower is 60 days or more delinquent on a home loan, and they seek a loan modification or other foreclosure prevention alternative, the lender must provide the borrower with a single point of contact with whom the borrower can communicate regarding the loan modification.
The borrower is responsible for making an initial request for the lender’s contact information, which may be done in writing or through electronic communication. The lender must then provide the requested contact information to the borrower within 10 business days of receiving the request. In the event that the contact information must be changed, a notification of the new contact information must be provided to the borrower within five business days of the change. These lender requirements may also be completed by a servicer that is acting on behalf of a lender.
The update also establishes several specific duties for the lender’s point of contact.
- The point of contact is responsible for presenting the borrower with all options that the borrower may have for modifying the delinquent loan.
- The point of contact must help the borrower identify any documents that are necessary to pursue the modification.
- Lastly, the point of contact must provide accurate information to the borrower regarding the status of his or her loan modification application.
The law requires the established point of contact must remain assigned to the borrower’s account until either the borrower’s account becomes current, or until the lender determines that all loss modification options have been exhausted.
How can we help?
CLA is prepared to assist your institution. Our mortgage professionals can help you evaluate the impact this new rule has on your operations. We are here to know you and help you. Contact Us with any questions or to learn how we can assist your mortgage operations.
Zachary Pearlstein, JD, is a Regulatory Compliance Director with CLA's Mortgage Advisory Division. He joined CLA on January 1, 2014, as part of its acquisition of Bankers Advisory, Inc. Zachary oversees Mortgage Advisory's regulatory compliance team, which focuses on federal and state compliance, fair lending, and the Home Mortgage Disclosure Act (HMDA). He is a graduate of Brandeis University and earned his juris doctor at Suffolk University Law School. He is admitted to the Massachusetts Bar.
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