Millman and State Lawmakers Analyze New Laws Regulating Subprime Mortgages

December 12, 2008
New York, NY – This week Assemblywoman Joan L. Millman, Chair of the Assembly Standing Committee on Oversight, Analysis and Investigation, led a hearing to assess the effectiveness of the Foreclosure Prevention and Responsible Lending Act of 2008.

The hearing was a joint effort which also included Assemblyman Darryl Towns, Chair of the Assembly Standing Committee on Banking and Assemblyman Michael Benjamin, Chair of the Assembly Subcommittee on Regulated Mortgage Lenders. The following representatives from the banking community, consumer advocates, and mortgage brokers offered testimony and answered inquiries: New York State Banking Department Superintendent Richard H. Neiman, New York State Bankers Association President Mike Smith, Neighborhood Economic Development Advocacy Project Co- Director Josh Zinner, Empire Justice Center Staff Attorney Saima Akhtar, New Yorkers for Responsible Lending/ South Brooklyn Legal Services Staff Attorney Anne Flemming, Neighborhood Housing Services of New York City Chief Operating Officer Bernell Grier, New York Association of Mortgage Brokers President Richard Bionti, Legislative Director John Commons and Former President Gene Tricozzi.

“Due to the gravity of this issue and the devastating impact it has had on families in New York State, we need to stay one step ahead,” said Millman. “I am glad that my Assembly colleagues and I were able to hear from those directly involved in this crisis and re-evaluate what is working, what isn’t working, and what we may need to do legislatively to improve our response.”

Several provisions of the Foreclosure Prevention and Responsible Lending Act, designed to protect borrowers from predatory lenders, became effective September 1, 2008. Although it is difficult to measure the progress of these various protections due to the tight credit market, a recent report released by the New York State Comptroller’s office shows that the state law is working. According to the report, the provision of the law which requires lenders to provide homeowners with 90 days notice proceeding a foreclosure has slowed New York State’s foreclosure rate. In addition, the hearing gave lawmakers the opportunity to examine the 2007 Halt Abusive Lending Transactions Task Force, the federal Emergency Economic Stabilization Act, and the New York State budget allocation of $25 million to provide direct assistance to homeowners with subprime loans.