Governor David A. Paterson today signed into law comprehensive foreclosure legislation which provides additional critical protections for New York State homeowners, tenants and neighborhoods in the wake of the ongoing foreclosure crisis. The legislation builds upon Governor Paterson’s landmark subprime lending reform law, enacted last year, by assisting homeowners currently at risk of foreclosure and minimizing the negative impacts that foreclosures have on communities. The Governor proposed the legislation as one of his program bills and submitted it as part of the agenda for the recent extraordinary session of the Legislature.

“This legislation protects homeowners by providing mandatory settlement conferences and protects tenants from premature evictions. It also safeguards New York neighborhoods from the decay caused by foreclosure by reducing the erosion of area property values and by preventing vacant homes from becoming sites of criminal activity,” Governor Paterson said. “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.”

“I want to thank my legislative colleagues for their work on this important legislation that will make a real difference for New Yorkers across the entire State,” the Governor added. “I also want to thank the State agencies that have participated in the implementation of these programs for their dedication to New York’s homeowners and tenants.”

This legislation, introduced at Governor Paterson’s request, expands the reforms achieved in last year’s law in several ways to protect homeowners, tenants and neighborhoods. The law will:

* Require the 90-day pre-foreclosure notice currently sent for subprime loans to be expanded to include all home loans. This measure allows additional time for many more homeowners to work with their lenders to find an affordable solution to prevent unnecessary foreclosures.

* Require those lenders who serve a 90-day notice on a homeowner to make a regulatory filing with the Banking Department within three days of that service with specified information. This regulatory filing will allow the Banking Department and the Division of Housing and Community Renewal (DHCR) to provide targeted assistance to distressed homeowners during the critical pre-foreclosure timeframe and closely monitor foreclosure statistics.

* Expand the scope of the early mandatory settlement conference to include borrowers of all home loans and not just borrowers with subprime loans.

* Establish protections for tenants in foreclosed properties by requiring that they receive written notification of the change in ownership of the property and be permitted to remain in their home for the remainder of their lease term or 90 days, whichever is longer.

* Require plaintiffs in a foreclosure action who obtain a judgment of foreclosure and sale to maintain the foreclosed property.

* Enhance consumer protections to prevent homeowners from falling prey to rescue scams, and prevent brokers who perform distressed property consulting services from accepting upfront fees.

Under Governor Paterson’s leadership, New York has brought together diverse stakeholders and service providers, including bank regulators, housing finance agencies, community groups and the lending industry, to develop lasting solutions to the foreclosure crisis.

New York’s extensive response to the mortgage crisis includes the funding and administration of grant programs for counseling and legal services; outreach and loan modification events that bring homeowners face-to-face with lenders and servicers; refinancing and mortgage programs such as the introduction of the forty-year fixed rate mortgage through the State of New York Mortgage Agency; neighborhood stabilization initiatives to return foreclosed properties to productive use; and enforcement actions through the creation of a Mortgage Fraud Unit within the Banking Department.

Legislation passed last year established protections to address the mortgage crisis in New York State. There were 39,923 foreclosure filings in New York State during the first three quarters of 2009, representing an 11 percent decrease when compared to the first three quarters of 2008. The 11 percent decrease year over year, compared to the national 22 percent increase over the same period, demonstrates the success of New York’s foreclosure prevention policies.

In addition, Governor Paterson has taken administrative steps to help stem the foreclosure crisis. In 2008, DHCR funded 64 foreclosure prevention programs across the State. As a result, at least one provider offering outreach/education, counseling and legal services to homeowners facing default or foreclosure is operating in each county. The 2009-2010 State Budget included an additional $25 million to support the foreclosure prevention measures.

(YWN Desk – NYC)