NY Governor Paterson Contains Repossessed Houses for Sale
New York Governor David Paterson has launched a comprehensive legislation that would deal with the rise in repossessed houses for sale and mitigate their effects.
The current bill would build upon the subprime lending law enacted in 2008 by adding provisions aimed at lessening the impact of repossessed houses for sale on homeowners, renters and neighborhoods.
Paterson cited the projection that New York homeowners could lose $64 billion in home equity by December this year due to the home price impact of repossessed houses for sale. He described the state’s commitment to prevent the erosion of property values, protect neighborhoods and help distressed homeowners and renters.
The comprehensive bill would expand protections in the foreclosure prevention bill enacted in 2008. One of the provisions of the current bill is the inclusion of all mortgage loans taken out before September 1, 2008 in the 90-day notice requirement for lenders before they proceed with foreclosure.
The bill would also require lenders to disclose their foreclosure proceedings to the Division of Housing and Community Renewal and the Banking Department. This would enable the agencies to provide assistance to homeowners and track statistics on foreclosures.
In the 2008 bill, only homeowners who took out subprime loans were eligible for mandatory settlement conference. The current bill would expand the provision to include all types of home loans.
Renters of foreclosed properties would also be protected. Lenders are required to notify in advance renters about foreclosure filings and to allow the renters to remain in the repossessed houses for sale for at least three months or until they use up all their security deposits.
To prevent neighborhood decay, owners of repossessed houses for sale are required to maintain the properties. To prevent fraudulent foreclosure prevention consultants from victimizing distressed homeowners, the bill prevents them from charging upfront fees.
More homeowners would also be helped with the expansion of the state’s foreclosure counseling program which was funded with another $25 million in the 2009-2010 budget.
Under the HALT Task Force, Governor Paterson has been coordinating the mortgage-related activities of the state’s housing finance and consumer protection agencies such as the Banking Department, Consumer Protection Board, NY Homes and DHCR.
Among the achievements of the state’s mortgage programs are the launching of the 40-year fixed-rate home loan through the services of the State of New York Mortgage Agency, the mandatory maintenance of repossessed houses for sale to ensure the stability of New York neighborhoods and the formation of the Banking Department’s Mortgage Fraud Unit.
