A new law recently went into effect that will protect New York homeowners from unscrupulous mortgage lenders who target borrowers with a high likelihood of default, and seek easy gains from foreclosures (Ch. 626 of 2002).

The anti-predatory lending law will put an end to the swindling of unsuspecting homeowners, who may be taken in by the fast talk of salespeople pushing loans.

Protecting hard-pressed consumers

Many victims of these predatory lending techniques have been elderly or from low-income households. Ineligible for prime-rate mortgages, they are bilked into accepting loans with excessive interest rates, or which are too large to be affordable. For this reason, the law was one of AARP’s top priorities since its introduction in the Assembly.

Seniors on fixed incomes are particularly susceptible to predatory lending schemes because they often have substantial equity in their homes, but may need access to cash to pay for home repair or health care bills.

The law helps prevent predatory lending by limiting interest hikes, banning loans deemed excessive compared to the income of the borrower, and requiring lenders to supply a list of credit counselors and a cautionary notice to borrowers.

Helping homeowners keep hard-earned savings

AARP called this law, which I sponsored, one of the strongest in the nation. Many New Yorkers work their whole lives hoping to retire in a house they can call their own. This law will ensure all that work wasn’t in vain.

For others, of lesser means or plagued by credit troubles, this law will prevent scheming lenders from exploiting their predicament, and save their homes from unnecessary foreclosure. Home ownership is a right for those who have earned it – and we can’t allow the theft of this right by the unscrupulous.

I am dedicated to protecting New York’s working families – especially in their homes. This law marks a victory for fairness and the right of our families to keep what they’ve worked for.