New Dem of the Week: David Paterson
New York Governor
The goal of home ownership has been ripped away from many Americans over the last couple of years and become unattainable for others as a result of the subprime mortgage crisis that has ravaged the US economy. New York has been one of the hardest hit states, with nearly 39,000 homes facing foreclosure, according to the New York State Banking Department, leading to a severely weakened state economy and a worsening financial outlook for the state.
Last week, Governor David A. Paterson signed legislation that will provide more tools to New Yorkers to hold onto their homes. The new law requires lenders to send a pre-foreclosure notice to borrowers who are facing potential foreclosure at least 90 days before foreclosure proceedings may be initiated. This would give homeowners more time to seek help and work with the mortgage company to avoid foreclosure.
In addition, the bill establishes a mandatory settlement conference for foreclosure proceedings involving homeowners with certain subprime loans and requires mortgage companies to make an affirmative assertion that they have standing to bring the foreclosure action and have complied with certain laws. Lenders must also list in the foreclosure notice government-approved housing counselors serving the borrower's area, in an effort to address many foreclosure rescue scams.
In order to prevent future crises, this bill establishes strong consumer protections for subprime loans and minimum underwriting standards that protect borrowers, classifies mortgage fraud as a crime under the Penal Law, and requires all mortgage servicers providing loans on residential property in New York to register with the Banking Department.
Since taking office, Gov. Paterson has worked with bank regulators, housing finance agencies, community and church groups, and the lending industry to create this long-lasting solution. "We have still seen thousands of our families lose their homes, and no state has been hit harder by the broader effects of the lending crisis. Wall Street's woes have helped to drive New York into recession," said Gov. Paterson. "We have the responsibility to protect New York's families who are facing foreclosure, and we need to reform banking regulations to ensure this does not happen again."
Gov. Paterson worked closely with the sponsors in both chambers, Senator Hugh Farley and Assembly Member Darryl C. Towns, to ensure passage of the bill. "Working together, we have crafted legislation which will hopefully help families who are at risk of losing their homes because of the subprime mortgage crisis, but at the same time we are trying to ensure that future home buyers will continue to have access to the mortgage market," said Senator Farley.
With approval of this legislation, Gov. Paterson has provided thousands of New Yorkers with the resources they need to protect their future and save their homes.