Gov. Eliot Spitzer, D-N.Y., has unveiled a proposal designed to offer assistance to New Yorkers who are at risk of losing their homes and enhance the protections in New York's anti-predatory lending statutes to prevent a similar crisis in the future.
According to the governor's office, the bill includes the following provisions: Lenders must send a pre-foreclosure notice to homeowners at least 60 days before initiating legal action against the homeowner; borrowers and lenders must participate in a settlement conference at the beginning of the foreclosure process; and lenders must make a determination of a borrower's reasonable ability to repay a loan when making a lending decision.
In addition, if the bill is approved, loan servicers servicing loans on residential property in New York state must register with the banking department; the crime of mortgage fraud will be defined under the penal law to make it easier for prosecutors to prosecute this type of fraud; and measures to protect distressed homeowners from falling prey to rescue scams will be instituted.
The proposal was developed with input from industry groups, nonprofit organizations and government agencies to ensure the legislation reflects the current lending landscape and gives consideration to possible impacts on the industry and consumers, the governor's office adds.
