Long Island Lawmakers Propose Mortgage Relief Plan

LONG ISLAND, NY — Congresswoman Kathleen Rice, along with State Senator Todd Kaminsky and State Senate Housing Chair Brian Kavanagh, are proposing a bill that would ease the pain of paying back missed mortgage payments to financially stressed homeowners after the coronavirus pandemic has ended.

As part of the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, homeowners are able to delay payments on federally backed mortgages up to 180 days in “forbearance.” Gov. Andrew Cuomo also signed an executive order which grants forbearance for 90 days to homeowners. At the end of this grace period, people will have to make the missed payments while still dealing with the immediate financial effects of the pandemic.

On April 20, Kavanagh and Kaminsky introduced a bill that would give homeowners the ability to extend the life of their mortgage by however long their payments were in forbearance, which will provide immediate relief and allow people to payback lenders with less financial strain. For example, if a mortgage is scheduled to end in June 2040 and the borrower now foregoes three months of payment, the mortgage payments would be extended to September 2040.

“Our goal as policymakers should be to offer homeowners as many flexible options as possible to suit each individual family’s needs,” the trio of lawmakers wrote in a Newsday editorial on April 20. “This [proposal] allows homeowners to catch up on their payments at their convenience, without fear of foreclosure actions or damage to their credit. For many, it could be the difference between losing their homes and keeping them.”

Rice said she supports including provisions in the next federal stimulus package to broaden forbearance relief for all homeowners and multifamily property owners to include those who do not have federally owned or backed mortgages and to prohibit servicers from demanding a full, one-time lump sum payment after the forbearance period.

“I’ve heard from countless homeowners who are struggling to make mortgage payments due to the COVID-19 pandemic,” Rice said. “During this unprecedented crisis, Long Islanders should be solely focused on keeping their families safe and healthy, not worried about losing their homes.”

According to a recent study, Suffolk County residents require 55 percent of their income to afford an average-priced home. In Nassau, the number is even more staggering, with the average home costing residents 65 percent of their income.

The figures show that the need for increased protections on both the federal and state levels is critical to ensuring a financially viable future for people while avoiding another housing collapse, the lawmakers argued.

“Our priority is protecting the people of our districts and making sure that they come out of this crisis healthy and financially secure,” Kaminsky said. “This bill will help ensure that outcome and provide real relief for homeowners.”