BAEC Bulletin | November/December 2021 | 15
homeowners may end up in foreclosure if they are not
that allow servicers to offer mortgage modifications without extensive underwriting as long as certain criteria are met, including the requirement to lower the monthly mortgage payment. These are positive changes that will help more homeowners get help faster and avoid the application delays of the past where a homeowner might be applying for upwards of a year or two for a mortgage modification. However, advocates have already noted that mortgage servicers are behind the ball when it comes to understanding and implementing these options. Without an advocate ensuring that a mortgage servicer is following the program guidelines for these various programs there is a chance that the mortgage servicer will make a mistake in the review of the options available and either offer the wrong options, or improperly deny a homeowner for any options. This is why it is so critical for New York State to maintain and expand upon its existing Homeowner Protection Program (HOPP) network of free housing counseling and legal service foreclosure advocates. Without these advocates the coming crisis will be far more devastating to our communities. Without the dedication of resources to the foreclosure prevention efforts needed to deal with the coming crisis, a vast number of homeowners will be needlessly displaced, the number of vacant and abandoned homes in New York will increase, and our communities, especially communities of color, will be devastated for years to come. Now more than ever it is critical to keep families in their homes. As housing prices soar and the rental market becomes increasingly unaffordable, the risk of displacement is ever more grave. Not only are rental prices exceedingly expensive, the availability of rental units is slim due to the effects of the pandemic on landlords and tenants. It is crucial for homeowners facing mortgage delinquency to reach out for help as early as possible. Help can be found by contacting the Western New York Law Center at 716- 855-0203 x 118 or the Homeowner Protection Program at (855) HOME-456 or visit homeownerhelpny.com. About the Author Amy Gathings attended UB Law School and graduated in 2009. She has been with the Western New York Law Center since 2011 where she currently serves as the Supervising Attorney of the Foreclosure Prevention Department.
“It is critical to the stability of communities throughout the State of New York that homeowners have access to free foreclosure prevention services.”
aware of their options or how to navigate this complicated process. It is also important to note that a forbearance suspends and does not forgive payments. This means that homeowners who have been on forbearance for eighteen months and who may have been behind prior to their forbearance now have to find a way to resolve all the arrears, including those that accumulated during the forbearance period. These trends point to a looming mortgage foreclosure crisis coming to a head in the next few months. It is critical to the stability of communities throughout the State of New York that homeowners have access to free foreclosure prevention services to obtain advice on the best course of action to take to try to avoid foreclosure. Trying to resolve a mortgage delinquency is a complicated process. Just obtaining the information necessary to determine what options are available can be daunting. The first step is to determine who owns or guarantees the loan and this can be extremely hard to figure out, even for experienced advocates. Mortgage servicers must abide by a uniform set of rules applied to all loans held by a particular investor. For instance, if a mortgage is backed by the Federal Housing Administration (FHA), there are FHA rules and guidelines that spell out the exact steps a mortgage servicer must take and the eligibility criteria for the programs available for delinquent homeowners. However, if a mortgage is backed by a private investor, it can be nearly impossible to access and understand the rules that are operating in the background to govern what the mortgage servicer is allowed and required to do to help a homeowner in distress. Private investors frequently claim that this information is proprietary and will not reveal how their programs work for homeowners who are behind. There are many new options for homeowners with loans backed by a federal entity, such as FHA, Veterans Administration, Fannie Mae, Freddie Mac, and USDA. These agencies have developed new options for delinquent homeowners who fell behind due to the pandemic and many of these options do not require the lengthy applications that are typically needed to get approved for a loan workout when a homeowner is behind. The Consumer Financial Protection Bureau has passed new regulations in response to the pandemic contained at 12 C.F.R. §1024.41
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