The Remarks Of Speaker Sheldon Silver

Unveiling Legislative Package Aimed At Addressing
Subprime Lending Crisis

State Capitol
Thursday, January 3, 2008 [11:15 a.m.]

Assembly Speaker Sheldon Silver announced legislation today at a Capitol news conference to address the subprime lending crisis. Silver was joined by Assemblymembers (from left) Darryl C. Towns, Ron Canestrari, Jeffrion L. Aubry, Janele Hyer-Spencer, Tim Gordon and Bob Reilly. Audio Excerpt A (24 seconds) Audio Excerpt B (25 seconds) Audio Excerpt C (24 seconds) Audio Excerpt D (22 seconds) View Transcript

Let me begin by introducing the Assembly Members who are here with me today:

• Assembly Member Darryl Towns, the Chair of our Standing Committee on Banks, who has been working on the sub-prime lending crisis for many months;
• Assembly Majority Leader Ron Canestrari;
• Assembly Member Jeff Aubry;
• Assembly Member Bob Reilly;
• Assembly Member Tim Gordon;
• And from Staten Island, Assembly Member Janele Hyer Spencer.

On their behalf, and on behalf of our Assembly colleagues, let me wish all of you and your loved ones a healthy and a happy new year.

Unfortunately, for millions of Americans, including tens of thousands of New Yorkers, this year will be anything but happy, as they face the possibility of foreclosure and the loss of their homes thanks to the national sub-prime lending crisis.

Back on May 29th of 2007, Chairman Towns and the Assembly's Committee on Banks held a public hearing to examine the lending industry and the foreclosure process, particularly in the secondary market utilized by banks, mortgage brokers and other lenders.

Armed with these findings, and with the leadership of Chairman Towns and Assemblyman Vito Lopez, the Chair of the Committee on Housing, we crafted - and today are unveiling - a comprehensive package of legislation that will help New Yorkers keep their homes and thereby protect the economic vitality of communities across New York State.

Because the sub-prime lending crisis is rather complex in nature, our comprehensive solution addresses both its roots and its branches. In fact, our "sub-prime legislation" provides greater, farther-reaching relief than is offered by any other proposal put forward to date.

Specifically, we provide $150 million in direct financial assistance for homeowners who are in default to help them "catch up" on back payments.

To qualify for assistance under our program, borrowers living in owner-occupied homes must be receiving counseling and be actively engaged with their lenders and/or loan servicing agents in developing an achievable mortgage payment plan or in modifying the original loan.

This is key. We are not "bailing out" lenders.

Lenders must be active financial participants in the process and picking up their share of the tab, so that the entire financial burden of this crisis does not fall solely on the state.

We are also investing $30 million in debt counseling and legal services to help those homeowners who are making their monthly payments but are staring down the barrel of an interest-rate hike that they cannot afford and are not able to re-negotiate on their own.

By making debt counseling and legal representation available to these struggling homeowners, we can prevent them from making the same mistakes and enduring the same nightmares in the future.

This is one part of our solution.

The Assembly Majority's comprehensive approach also incorporates a critical piece of legislation known as "The Responsible Lending Act of 2008," which is sponsored by our Banking Committee Chair, Assemblyman Darryl Towns.

This legislation addresses the predatory lending practices which are at the core of the sub-prime crisis. At the same time, we strengthen the legal requirements on lenders and brokers to take into account a borrower's ability to pay before making a loan.

To determine the effectiveness of our efforts, we are requiring the State Banking Department to monitor and to study the mortgage industry, and to report on the effectiveness of public efforts to reduce defaults and foreclosures.

There are other provisions, including a requirement for fair and accurate real estate appraisals, but in sum, this is the crux of our plan.

Before I turn the podium over to Assemblyman Towns, let me make one final observation.

Home ownership is the "cornerstone" of the American Dream.

To put the dream of owning a home within the reach of working men and women and then, to put them in the position of losing their homes, is callous at best.

It is predatory lending and it is wrong by any measure.

We unveiled this legislation before the start of the 2008 legislative session to send the message that time is of the essence.

New Yorkers are losing their homes. There is no time to waste.

We urge Governor Spitzer, as well as our colleagues in the Senate, to study our comprehensive legislative package and to join our effort to keep New Yorkers in their homes.