COVID-19 Impacts On Creditor's Rights

It is clear that secured creditors -- both in the consumer and commercial context -- will face a variety of monetary and non-monetary defaults as a result of the effects of the COVID-19 pandemic. It is important that secured creditors understand the applicable regulations when responding to their borrowers' requests for accommodation, as well as the practical and legal limitations before seeking to enforce loan default. Secured creditors should note the following:

1. On March 20, 2020, Governor Cuomo issued an Executive Order stating that "there shall be no ... foreclosure of any residential or commercial property for a period of ninety days" from March 20, 2020 (i.e., to June 18, 2020). This means that a secured lender could not sell a property at a foreclosure auction in New York before June 19, 2020. This Executive Order does not itself bar prosecution of an existing foreclosure action or the enforcement of rights in connection with a loan. However, in connection