Establishes the urban homeowners assistance program to assist first time, low or moderate income, or minority homeowners avoid foreclosure by authorizing and directing the commissioner of the state division of housing and community renewal to enter into contracts with neighborhood preservation companies to provide for such assistance to residents in certain urban communities; makes an appropriation therefor.
STATE OF NEW YORK
________________________________________________________________________
4880
2011-2012 Regular Sessions
IN ASSEMBLY
February 8, 2011
___________
Introduced by M. of A. TOWNS, N. RIVERA, ROBINSON, ORTIZ, GIBSON --
Multi-Sponsored by -- M. of A. BRENNAN -- read once and referred to
the Committee on Housing
AN ACT to amend the private housing finance law, in relation to estab-
lishing the urban homeowners assistance program; and making an appro-
priation therefor
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The private housing finance law is amended by adding a new
2 article 16-B to read as follows:
3 ARTICLE XVI-B
4 URBAN HOMEOWNERSHIP ASSISTANCE PROGRAM
5 Section 930. Declaration of legislative findings.
6 931. Definitions.
7 932. Contracts with neighborhood preservation companies.
8 933. Payment to neighborhood preservation companies for homeown-
9 ership technical assistance and training.
10 934. Legal aid agreements.
11 935. Annual report to the legislature.
12 § 930. Declaration of legislative findings. The legislature hereby
13 finds and declares that there has developed a damaging impact of preda-
14 tory and subprime residential mortgage lending patterns in various
15 vulnerable neighborhoods and communities of the state and that the
16 relationship between the predominance of subprime loans and high concen-
17 trations of foreclosure actions being filed has been forecast and clear-
18 ly documented. The legislature further finds that the scarcity of
19 resources dedicated to housing counseling and home buyer education
20 services has left many first time, low and/or moderate income, or minor-
21 ity homebuyers at risk.
22 The legislature further finds that in many urban communities where
23 subprime lenders dominate refinancing and home equity mortgage markets,
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05889-01-1
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1 and where necessity combined with poor decision-making often places low
2 and/or moderate income homeowners in non-sustainable mortgage products,
3 the adjusted cost of a home is frequently exceeded as a result of refi-
4 nancing products, home equity products compounded with first mortgages,
5 and runaway fees. As a result many homeowners are rendered at risk of
6 foreclosure. Besides the personal tragedies these households face, fore-
7 closure further affects neighborhoods and communities by de-stabilizing
8 the character of the area. The legislature further finds that in order
9 to prevent and/or mitigate foreclosures, financial literacy must be
10 imparted to individuals who are about to purchase a home or are at risk
11 of foreclosure.
12 The legislature further finds that the neighborhood preservation
13 companies which have been established throughout the state are instru-
14 mental as providers of information, training and assistance to residents
15 in their service areas in need of housing services intervention in the
16 retention of affordable homeownership; that conditions aggravated by an
17 affordable rental housing crisis have overburdened their resources and
18 are being compounded by the demand for home ownership assistance and
19 foreclosure prevention; and that there is a necessity for the services
20 of neighborhood preservation companies familiar with the specific needs
21 of the residents in their service areas to provide targeted assistance
22 to existing and potential homeowners to secure permanent, affordable and
23 fiscally viable homeownership. The necessity in the public interest for
24 the provisions hereinafter enacted is hereby declared as a matter of
25 legislative determination.
26 § 931. Definitions. As used in this article, the following words and
27 phrases shall have the following meanings:
28 1. "Commissioner" shall mean the commissioner of the state division of
29 housing and community renewal.
30 2. "Division" shall mean the state division of housing and community
31 renewal.
32 3. "Neighborhood preservation company" shall mean a corporation organ-
33 ized under the provisions of the not-for-profit corporation law which
34 has been primarily engaged in one or more neighborhood preservation
35 activities as defined in subdivision five of section nine hundred two of
36 this chapter.
37 4. "Homeownership assistance activities" shall mean counseling for
38 default and foreclosure prevention, budget management, debt reduction
39 planning, credit repair, refinancing options, in the recognition of
40 predatory lenders, consumer scams, homeowner basics and the hiring of
41 contractors and all such other activities as may be deemed essential to
42 ensuring the prevention of foreclosure.
43 5. "Accessibility" shall mean cultural and linguistic accessibility to
44 diverse residents.
45 6. "Residents" shall mean individuals or families with incomes not
46 exceeding ninety percent of median income residing in municipalities
47 with populations of twenty-five thousand or greater inhabitants,
48 currently in residence or with evidence of forthcoming residency in the
49 service area.
50 7. "Service area" shall mean the established boundaries of a neighbor-
51 hood preservation company as specified in subdivision three of section
52 nine hundred three of this chapter.
53 8. "Significant" shall mean no less than seventy-five percent of the
54 specified contracted services.
55 § 932. Contracts with neighborhood preservation companies. 1. The
56 commissioner shall enter into contracts with neighborhood preservation
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1 companies for the performance of homeownership assistance activities.
2 Such contracts shall be entered into, however, only after appropriate
3 findings by the commissioner and shall be subject to the limitations as
4 set forth in this section.
5 2. Prior to entering into a contract with an existing neighborhood
6 preservation company, the commissioner shall have made a finding, that
7 the company is in good standing pursuant to the provisions of paragraphs
8 (a) and (b) of subdivision five of section nine hundred three of this
9 chapter and that there is a need for proposed homeownership activities
10 being proposed based on the documented submission of the company.
11 3. Prior to entering into a contract with an existing neighborhood
12 preservation company, the commissioner shall have made a finding that
13 the company has or is prepared to engage in services or has employed
14 persons to render cultural and linguistic accessibility to the diverse
15 target population.
16 4. Contracts entered into hereunder with neighborhood preservation
17 companies shall be limited in duration to periods of one year, but may
18 thereafter be renewed, extended or succeeded by new contracts from year
19 to year in the discretion of the commissioner; they shall be limited in
20 amount to forty-five thousand dollars per year and shall not be consid-
21 ered part of the aggregate sum limitations imposed under subdivision
22 four of section nine hundred three of this chapter.
23 5. Prior to renewing or extending a contract or entering a succeeding
24 contract with a neighborhood preservation company the division shall
25 determine that:
26 (a) the company shall have substantially completed the homeownership
27 activities specified in the contract to be renewed or succeeded;
28 (b) the company shall have received the sums and funds specified in
29 this section; and
30 (c) the activities carried out by the company pursuant to its contract
31 shall have resulted in a significant impact on the needs of the at risk
32 existing and potential homeowners in the service area.
33 6. Prior to terminating or not entering into a succeeding contract the
34 division shall:
35 (a) determine that the company is in violation of the terms and condi-
36 tions of the contract or that funds provided pursuant to the contract
37 are being expended in a manner not consistent with the terms or
38 provisions of this article; or
39 (b) determine that the significant need in the service area has been
40 fulfilled;
41 (c) provide the company with written notice, at least forty-five days
42 in advance, of its intent to terminate or not renew the contract and
43 provide the company with the opportunity to appear and be heard before
44 the division with respect to the reasons for such proposed termination
45 or non-renewal. At the same time that a company is notified of the divi-
46 sion's intent to terminate, or not renew the contract, the division
47 shall likewise inform the senate and assembly members who represent
48 areas within such company's geographic boundaries.
49 7. The division may temporarily withhold payments and may elect not to
50 enter into a succeeding contract with any neighborhood preservation
51 company if the company is not in compliance with the contract or has
52 without good cause failed to submit the documentation required under the
53 contract.
54 § 933. Payment to neighborhood preservation companies for homeowner-
55 ship technical assistance and training. 1. Each contract entered into
56 with a neighborhood preservation company shall provide payment to the
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1 neighborhood preservation company for urban homeownership assistance
2 activities which the company has performed.
3 2. Payment to neighborhood preservation companies pursuant to this
4 article shall be restricted to sums required for the payment of salaries
5 and wages to employees of such companies and fees to legal consultants
6 retained by them who are engaged in rendering homeownership assistance
7 activities to the target population.
8 3. Payments shall be made by the division to the neighborhood preser-
9 vation company, not less frequently than semiannually at or prior to the
10 commencement of the contract, to compensate the company for the homeown-
11 ership assistance activities which it shall undertake to perform;
12 provided that with respect to contracts entered into on or after June
13 thirtieth, the first such payment shall be made by the division begin-
14 ning on or after July first of the fiscal year for which an appropri-
15 ation in support of such payment is made and provided further that the
16 final such payment to the neighborhood preservation company shall be
17 made no later than March thirty-first of such fiscal year, unless such
18 payment has been withheld pursuant to the provisions of subdivision
19 seven of section nine hundred thirty-two of this article.
20 § 934. Legal aid agreements. A portion of the funds, not to exceed
21 twenty percent of the appropriation, for the activities specified under
22 this article shall be dedicated, on a competitive basis and based on
23 needs identified by each company, to legal aid organizations with estab-
24 lished ties to the neighborhood preservation company applicant's service
25 area for the provision of legal services. In the event that such not-
26 for-profit legal aid organizations are not available, the neighborhood
27 preservation company shall subcontract with individual attorneys or law
28 firms with the approval of the commissioner.
29 § 935. Annual report to the legislature. The commissioner shall submit
30 an annual report to the legislature on or before December thirty-first
31 on the implementation of this article. Such report shall include, but
32 not be limited to, for each company receiving funds under this article,
33 a description of such company's contract amount, the specific homeowner-
34 ship activities performed by such company, the number of persons served
35 by the company and, if applicable, its legal aid consultant and the
36 impact of the activities performed.
37 § 2. The sum of two million dollars ($2,000,000), or so much thereof
38 as may be necessary, is hereby appropriated to the state division of
39 housing and community renewal out of any moneys in the state treasury in
40 the general fund to the credit of the division of housing and community
41 renewal, not otherwise appropriated, and made immediately available, for
42 the purpose of carrying out the provisions of this act. Such moneys
43 shall be payable on the audit and warrant of the comptroller on vouchers
44 certified or approved by the commissioner of the state division of hous-
45 ing and community renewal in the manner prescribed by law.
46 § 3. This act shall take effect immediately.
