Assembly Speaker Sheldon Silver, Judiciary Committee Chair Helene Weinstein, Banks Committee Chair Darryl Towns and Housing Committee Chair Vito Lopez today announced the passage of a measure that strengthens current foreclosure law to protect homeowners and tenants. The bill (Extraordinary Session Assembly Bill A.7) was passed during an extraordinary session called by Governor Paterson.
The measure enhances the New York Responsible Lending Act of 2008, by requiring the Office of Court Administration to strengthen settlement conferences for foreclosure proceedings; authorizing and regulating "shared appreciation" agreements between the lender and borrower; and expanding notice to co-op owners who are subject to foreclosure to take advantage of counseling and attorneys to level the playing field with shareholders.
The bill also furthers the protection of tenants by requiring properties maintain a level of habitability and stability despite foreclosure, mandating that tenants receive notification during the foreclosure process, as well as information about the tenant's right to remain in the residence until the end of the lease or for 90 days, in the absence of a lease.
"With so many New Yorkers struggling to pay their mortgage or rent each month during these tough economic times, this measure will help protect those who face foreclosure, and the tenants of buildings being foreclosed upon," said Silver. "These safeguards and regulations are needed to make sure that no one is taken advantage of during such a difficult time such as that of foreclosure."
"This measure will protect a greater number of homeowners at risk of losing their homes by allowing them to benefit from newly strengthened settlement conference procedures," said Weinstein (D-Brooklyn). "It increases the effectiveness of the pre-settlement foreclosure conferences by requiring the production of specific mortgage-related documents and authorizing the Chief Administrative Judge to promulgate the necessary court rules to ensure good faith negotiations to modify the loan."
"By authorizing 'shared appreciation' agreements, where the lender agrees to a reduction in the principal amount owed on a mortgage, in exchange for sharing in the appreciation of the property upon its sale in the future, we can protect homeowners from losing their homes in foreclosure by providing an incentive to lenders to do loan modifications," said Towns (D-Brooklyn).
"I'm pleased that we enacted a foreclosure notification and tenant act, that will help marginal homeowners obtain due process and provide tenants with the necessary support and maintenance to remain in their homes," said Lopez (D-Brooklyn).
Silver also noted that, "The Assembly continues to work with Governor Paterson and the Senate to agree on a deficit reduction plan to close this year's $3 billion budget gap."