OANA has reached out to our congressional representatives concerning the forbearance of mortgage payments during the Covid-19 emergency. The federal government, who has jurisdiction of loans backed by Fanny and Freddy, advised banks to cease foreclosures upon non-payment of mortgages as well as affiliated late fees. They also demanded that no late payments be reported to credit agencies. However, they still need to address how such defaulted loans will be made whole again, to avoid of an avalanche of foreclosures and tenant displacements. My bank, Wells Fargo, has complied with the above. However, their initial guidance was that the entire past due balance must be paid as soon as the forbearance period is over. No landlord should avail themselves of this program under these conditions. If the landlord’s tenants do not make due on their rent payments, this would force the landlord to carry the entire burden with no help from any other parties. It could put their whole loan in jeopardy. Recently Wells Fargo clarified their initial statement. The revised advice states that there may be a possibility of a loan modification, like moving the missing payments to the end of the loan or reducing the interest rate. Nevertheless, it will be up to the banks’ individual underwriter who will assess, qualify and conclude. There will be no guarantees or assurances of any leniency, disregarding the prior standing of a landlord/mortgagor. A request for landlords to be the sole absorbent of missing rent payments may lead to a spike in foreclosures, and increased efforts to replace illiquid renters with solvent ones. It is important to note that this will increase housing vulnerability for tenants also. Landlords will be incentivized, through no fault of their own, to replace underperforming tenants in order to make sure they have income to service...

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We request urgent action to address pressing mortgage payments for residential real estate, in light of the economic slowdown caused by COVID-19. Specifically, we’d like to emphasize such urgency as it pertains to single-family units, condos, co-ops and 1-3 multifamily buildings. We are fully supportive of relieving tenants from potential evictions. However, it cannot be at the expense of homeowners and landlords if we want the private sector to continue to provide single/multifamily housing units. Whether the owner has lost their own job (affecting single-family, condos or coops), or lost income from their tenants (In multifamily buildings), the repercussions of failed mortgages can lead to disaster. Although the financial system has significantly improved its resilience to financial distress since the last recession, the scale at which COVID-19 is impacting the economy will require decisive and swift action to avoid the mortgage defaults that could lead to another economic and housing crisis like we experienced in 2008. Based on the latest census, about 41% of all housing units in NYC are owner-occupied – which is a significant portion of our housing stock. We ask that Mortgage Holders be temporarily relieved of the responsibility of payments during this crisis, same as tenants who are protected against evictions or penalties for non-payment of rent. We also would like utility and tax bills addressed to make sure that housing is stable and meets our needs. As an example, we reached out to Wells Fargo, and all they are currently offering is a one-time relief of any penalties for late or non-payment of a mortgage. Nevertheless, they are still reporting it to the credit bureaus. This is an insignificant response to what is sure to be a major problem. During the financial crisis in 2008, banks were offering modifications to mortgages with a few months...

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