New Law Expands NY Subprime Lending Reform to All Loans
New York Gov. David Paterson signed new foreclosure legislation protecting homeowners, tenants and neighborhoods. The new law expands on the governor’s subprime lending reform law enacted last year in an attempt to assist homeowners on the verge of foreclosure and minimize the impacts foreclosures have on communities. The law expands the 90-day foreclosure notice currently sent for subprime loans to all home loans. It also requires the lenders who serve the notice to make a regulatory filing with the Banking Department within three days with specified information to allow it and the Division of Housing and Community Renewal (DHCR) to provide assistance to homeowners. It expands the mandatory settlement conference to include borrowers of all home loans – not just subprime. The law requires that tenants receive written notice of the change in ownership of the property after foreclosure and allows them to stay for 90 days or the remainder of the lease. Under the law, plaintiffs in a foreclosure action who obtain judgment of foreclosure and sale must keep the foreclosed property. The law also prohibits distressed property consulting services from accepting upfront fees. New York has reacted to the mortgage crisis with a outreach and loan modification events, refinancing and mortgage programs like the introduction of forty-year fixed rate mortgage through the State of New York Mortgage Agency and neighborhood stabilization programs. In the first three quarters of 2009, there were 39,923 foreclosure filings in New York, an 11% drop from the first three quarters of 2008, according to the governor’s release. Over the same period, the national numbers increased 22%. “The laws we have passed in New York have stood as a national model for foreclosure mitigation. This effort is about keeping New Yorkers in their homes and protecting them during this economic crisis,” Paterson said. Write to Jon Prior.