By: Kevin Oklobzija//December 14, 2021
By: Kevin Oklobzija//December 14, 2021//
Mortgage servicers have been told they still should be providing long-term relief to homeowners impacted by the COVID-19 pandemic in accordance with state and federal regulations or face penalties and enforcement actions.
In a letter from New York State Attorney General Letitia James, banks and private label mortgage servicers (PLS) were warned that they must comply with streamlined modification programs now required by government-sponsored enterprises such as Fannie Mae and Freddie Mac, and also and provide comparable relief.
“If we plan to rebuild our economy, we must ensure that homeowners are granted the relief they need,” James said in a news release.
The Office of the Attorney General’s Mortgage Enforcement Unit (MEU) will help oversee the distribution of New York state’s Homeowner Assistance Fund (HAF), which was announced last week by Gov. Kathy Hochul.
“While the support provided by the Homeowner Assistance Fund is substantial, the number of homeowners facing COVID-related distress is far greater,” James said. “To help the greatest number of homeowners and ensure that the family home stays in the family, HAF funds must supplement rather than replace the mortgage industry’s own efforts.
“My office will continue to ensure that mortgage servicers comply with their legal obligations as we work to protect New York families and their homes.”
The mortgage enforcement unit will review assistance fund applications to determine if a servicer’s loss mitigation programs — such as a deferral of missed payments or a streamlined loan modification — would result in an affordable and sustainable monthly payment.
Since the assistance fund is designed to supplement, not replace, loss mitigation, mortgage providers must provide homeowners with all available options before grant assistance is sought.
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