New York state homeowners facing foreclosure will soon be receiving help from the government due to the efforts of Assemblyman Andrew Raia (R,I,C - East Northport) and his legislative colleagues who voted to enact a law that seeks to provide remedies to the mortgage crisis by helping those at risk and preventing future foreclosures.
Assemblyman Raia, who is the Ranking Minority Member on the Banks Committee, noted that the bill strengthens Banking Law to prevent a mortgage crisis in the future by establishing standards for lenders and brokers to prevent borrowers from being placed in unaffordable home loans. It also registers and regulates mortgage loan servicers to enhance loan-servicing standards in the state and increases accountability standards by preventing illegal activity.
“The mortgage crisis in New York state has reached epic proportions, forcing many families to lose their homes and whole communities to suffer. In 2007, more than 52,000 foreclosures were filed - an increase of 10 percent from 2006 and 55 percent from 2005,” said Raia. “These statistics shed light on the magnitude of the crisis and it is our job to ensure that additional families don’t lose their homes. I am pleased to have worked with the governor to provide a solution to this growing problem.”
Elements of the bill aimed at helping residents currently at risk of losing their homes include: Pre-Foreclosure notice prior to commencement of legal action; early settlement conference to provide a second opportunity to reach resolution; ensuring that those who initiate foreclosure actually have the right to do so, and tough measures to prevent distressed homeowners from falling prey to rescue scams.
Measures included in the bill that are designed to prevent a future crisis include greater protections for homeowners by defining “subprime home loan” to eliminate things such as prepayment penalties, abusive yield spread premiums, negative amortization and optional adjustable rate mortgages. Other aspects of the bill also require brokers to act in the borrower’s interest and disclose all material facts.
Assemblyman Raia highlights the bill’s creation of a new crime – mortgage fraud – as one of its strengths. The bill will simplify prosecutions by defining and criminalizing residential mortgage fraud and allow prosecutor to charge a person guilty of such a crime (in excess of $1 million) with a Class B felony.
“By taking measures to both help homeowners at risk of losing their homes and preventing a future crisis, we can help offset the detrimental effects foreclosures have had, and will have, on Long Island families and our state’s economy. As Minority ranker on the Banking Committee, I will also continue to work hard on behalf of homeowners to ensure that they are protected from predatory lenders and illegal banking practices,” said Assemblyman Raia.