NY State Senate Bill 2017-S1339

Archive: Last Bill Status - In Senate Committee Finance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to finance
Jan 09, 2017	referred to finance

co-Sponsors

2017-S1339 (ACTIVE) - Details

Current Committee:: Senate Finance
Law Section:: State Finance Law
Laws Affected:: Add §99-aa, St Fin L
Versions Introduced in 2015-2016 Legislative Session:: S5474

2017-S1339 (ACTIVE) - Summary

Relates to establishing the community restoration fund to use funds from judgments and settlements received in cases with lending institutions relating to subprime and predatory lending, and other mortgage and real estate industry practices to help communities recover from the foreclosure crisis and keep homeowners in their home.

2017-S1339 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S1339

 TITLE OF BILL :  An act to amend the state finance law, in relation
to establishing the community restoration fund

 PURPOSE :

To use funds from judgments and settlements received in cases with
lending institutions relating to subprime and predatory lending, and
other mortgage and real estate industry practices to help communities
recover from the foreclosure crisis and keep homeowners in their home.

 SUMMARY OF PROVISIONS :

Section 1 sets forth a statement of legislative purpose and findings.

Section 2 sets forth definitions of terms in this section.

Section 3 adds a new section 99-z to state finance law to establish
the community restoration fund from monies obtained by the Attorney
General in cases involving lending institutions for subprime and
predatory loans, mortgage servicing and other claims, to provide
powers and duties to fund and program managers, create a community
restoration fund counsel to advise in performance of said duties and
powers, outline use of funds.

Section 4 establishes the Community restoration fund council, sets
forth its purpose and scope and its membership.

Section 5 sets forth the requirements for the annual report.

Section 6 provides that urban development corporation be authorized to
conduct a rulemaking to promulgate any rules necessary to carry forth
the purpose of this legislation that must be completed within 180 days
of the effective date of this act.

Section 7 sets forth the effective date.

 JUSTIFICATION :

In the early 2000's the economy was moving along and homes sales and
loan approvals were occurring in record numbers as people felt secure
in reaching for the American Dream of homeownership. However, in 2008,
the bubble burst and many questionable tactics were uncovered showing
how loans were being given to people in high risk of foreclosure. When
the mortgage crisis occurred, foreclosures skyrocketed. While much of
the country has recovered, New York is still suffering.

A report by the Empire Justice Center found that while in 2014 the
national foreclosure rate fell to 2.1%, in New York the foreclosure
rate was 5.4%. In addition, the state delinquency rate is a full point
higher than the national delinquency rate. The report confirmed that
New York is still fighting this crisis and will be for some time. Many
of these foreclosures were based upon mortgages practices that are
coming under question, which resulted and will continue to result in
settlements to New York State. The state must use this money toward
helping those that were harmed by the actions of the lending
institutions. This legislation will create a statewide mechanism for
keeping New Yorker's in their homes by modifying underwater mortgages,
purchased distressed assets and improving them, injecting funds into
our communities and increasing the values of homes throughout New York
state.

 LEGISLATIVE HISTORY :

2015-16: S.5474 reported from Finance, committed to Rules.
 FISCAL IMPLICATIONS :

None. The fund does not affect the state budget because it is funded
by settlement proceeds and judgment collection from the attorney
general.

 EFFECTIVE DATE :
This act would take effect immediately.

2017-S1339 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1339
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              January 9, 2017
                                ___________
 
 Introduced  by  Sens. COMRIE, PERKINS -- read twice and ordered printed,
   and when printed to be committed to the Committee on Finance
 
 AN ACT to amend the state finance law, in relation to  establishing  the
   community restoration fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Statement of legislative purpose and findings. The legisla-
 ture finds and declares that  New  York's  mortgage  foreclosure  crisis
 continues.  Many  New  Yorkers  are  still unable to meet their mortgage
 obligations. There are delays in  the  foreclosure  process,  homes  are
 sitting  vacant  or  in  a state of ill repair because of drawn out loan
 modification and foreclosures, neighborhoods with high concentrations of
 foreclosures are losing value and the owners are losing equity.    Fore-
 closures  that  were  the  result  of the real estate downturn and great
 recession will continue to be a problem within the state.  The  legisla-
 ture  finds that it is necessary to create a statewide program to stabi-
 lize communities throughout the state by: (i) avoiding foreclosures  and
 ameliorating the effects of the mortgage foreclosure crisis; (ii) elimi-
 nating  blighted  properties  and  vacant lots that bring down community
 values and create attractive nuisances within communities; (iii) restor-
 ing property tax income to counties  and  towns;  and  (iv)  maintaining
 affordable  housing.    Accordingly  the  legislature hereby creates the
 community restoration fund.
   § 2. Definitions. As used in this act, the following words and phrases
 shall have the following meanings:
   1. "Community development financial institution" or  "CDFI"  means  an
 organization  located in this state which has been certified as a commu-
 nity development financial institution by the federal community develop-
 ment financial institutions fund, as established pursuant to  12  U.S.C.
 4701 et seq.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00315-02-7

 S. 1339                             2
 
   2.  "Fund manager" means a New York-based Community Development Finan-
 cial Institution ("CDFI") fund manager.
   3.  "Program  manager"  means a property holding company that will own
 and manage the assets purchased through the community restoration fund.
   § 3. The state finance law is amended by adding a new section 99-aa to
 read as follows:
   § 99-AA. COMMUNITY RESTORATION FUND. 1. THERE IS HEREBY ESTABLISHED IN
 THE CUSTODY OF THE STATE COMPTROLLER A SPECIAL FUND TO BE KNOWN  AS  THE
 "COMMUNITY RESTORATION FUND".
   2.  THE  COMMUNITY  RESTORATION FUND SHALL CONSIST OF MONEYS DEPOSITED
 THEREIN BY THE STATE COMPTROLLER FROM THE ATTORNEY GENERAL OF THE  STATE
 OBTAINED THROUGH JUDGMENTS AND SETTLEMENTS WITH LENDING INSTITUTIONS FOR
 SUBPRIME  AND  PREDATORY  LOANS,  FOR MORTGAGE SERVICING AND SECURITIZA-
 TIONS, CLAIMS RELATED TO MORTGAGE PRACTICES, MORTGAGE BACKED SECURITIES,
 CASES RELATED TO MORTGAGE AND MORTGAGE SECURITIES IN THE  LONDON  INTER-
 BANK  OFFERED RATE AND OTHER MORTGAGE FORECLOSURE RELATED CASES AND FROM
 FEDERAL, STATE OR  LOCAL  GOVERNMENTS  AND  PRIVATE  INVESTORS.  NOTHING
 CONTAINED IN THIS SECTION SHALL PREVENT THE STATE FROM RECEIVING GRANTS,
 GIFTS  OR  BEQUESTS  AND  DEPOSITING THEM INTO THE ACCESSIBLE ELECTRONIC
 INFORMATION SERVICE FUND ACCORDING TO LAW.
   3. THE MONEYS IN THE FUND SHALL BE USED TO:
   (A) PURCHASE MORTGAGE NOTES ON ONE, TWO, THREE AND FOUR  FAMILY  HOMES
 AT  DISCOUNTED  RATES  WITH  THE  INTENT OF MODIFYING THE MORTGAGE TO AN
 AFFORDABLE RATE TO KEEP CURRENT HOMEOWNERS IN THE PROPERTY; AND
   (B) ACQUIRE HOMES AT DISCOUNTED RATES FROM LENDERS, AND PURCHASE HOMES
 AT AUCTION OR THROUGH SHORT SALE WITH THE INTENT TO:
   (I) RENT OR SELL BACK TO HOMEOWNERS WITH AN AFFORDABLE LOAN;
   (II) FUND LOCAL, NOT-FOR-PROFIT-DEVELOPMENT  EFFORTS  TO  TURN  VACANT
 PROPERTIES INTO AFFORDABLE HOUSING;
   (III) REHABILITATE DISTRESSED PROPERTIES FOR NEW OWNERS IF THE PROPER-
 TY WAS VACANT; AND/OR
   (IV) DEMOLISH HOMES BEYOND REPAIR.
   4. THE URBAN DEVELOPMENT CORPORATION SHALL SELECT THE FUND MANAGER AND
 PROGRAM MANAGER THROUGH THE REQUEST FOR PROPOSAL PROCESS.
   5. THE FUND MANAGER SHALL:
   (A)  BE  RESPONSIBLE  FOR  THE  RECEIPT, MANAGEMENT AND EXPENDITURE OF
 MONIES HELD IN THE COMMUNITY RESTORATION FUND;
   (B) MAINTAIN BOOKS AND RECORDS PERTAINING TO ALL MONIES  RECEIVED  AND
 DISBURSED PURSUANT TO THIS SECTION;
   (C)  RECEIVE PUBLIC, SETTLEMENT AND OTHER FUNDS AND USE THOSE FUNDS TO
 PURCHASE ASSETS THAT WILL BE HELD BY THE PROGRAM MANAGER;
   (D) HAVE THE AUTHORITY TO ACQUIRE DISTRESSED ASSETS AND PURCHASE MORT-
 GAGE NOTES ON ONE, TWO, THREE AND/OR FOUR FAMILY HOMES, WHETHER CURRENT,
 DELINQUENT AND/OR IN FORECLOSURE, OCCUPIED, VACANT OR  ABANDONED,  WHERE
 PURCHASED:
   (I) BY A FUND MANAGER AT CURRENT APPRAISED VALUES;
   (II)  THROUGH  NEGOTIATED  SALES AT FHA DISTRESSED ASSET STABILIZATION
 PROGRAM SALES;
   (III) THROUGH AUCTIONS, SHORT SALES, REAL ESTATE OWNED  PROPERTIES  OR
 PROPERTIES  IDENTIFIED BY THE NOT-FOR-PROFIT ORGANIZATIONS ON THE COMMU-
 NITY RESTORATION FUND COUNCIL;
   (E) HAVE THE AUTHORITY TO TRANSFER DISTRESSED ASSETS  TO  THE  PROGRAM
 MANAGER;
   (F) WORK WITH THE COMMUNITY RESTORATION FUND COUNCIL TO DEVELOP STRAT-
 EGIES  FOR  ACQUIRING DISTRESSED ASSETS AND TO IDENTIFY OPPORTUNITIES TO
 ACQUIRE DISTRESSED ASSETS;

 S. 1339                             3
 
   (G) WORK WITH THE PROGRAM MANAGER AND THE COMMUNITY  RESTORATION  FUND
 COUNCIL TO IDENTIFY NOT-FOR-PROFIT DEVELOPERS ABLE TO IMPLEMENT DISPOSI-
 TIONS  TAILORED  TO LOCAL NEEDS, WHETHER SALES TO NEW HOMEOWNERS, USE AS
 AFFORDABLE RENTAL PROPERTY, OR  DEMOLITION  AND  REPURPOSING  FOR  OTHER
 COMMUNITY USES;
   (H)  MAKE FUNDS DIRECTLY AVAILABLE TO NOT-FOR-PROFIT ORGANIZATIONS AND
 DEVELOPERS FOR USE TO ACQUIRE, REHABILITATE  AND/OR  FINANCE  PROPERTIES
 DIRECTLY.  THESE  FUNDS  WOULD  BE  MADE AVAILABLE THROUGH A REQUEST FOR
 PROPOSAL PROCESS CONDUCTED BY A STATE AGENCY IN  CONSULTATION  WITH  THE
 FUND MANAGER;
   (I) DEVELOP A PLAN TO MAKE THIS A REVOLVING LOAN FUND; AND
   (J) APPLY FOR FEDERAL OR PRIVATE GRANT MONEY THAT BECOMES AVAILABLE TO
 CARRY OUT THE PURPOSE OF THIS SECTION.
   6. THE PROGRAM MANAGER SHALL:
   (A) OWN AND MANAGE THE DISTRESSED ASSETS ACQUIRED BY THE FUND MANAGER;
   (B) HAVE THE POWER TO MODIFY MORTGAGE NOTES ON THE ACQUIRED ASSETS;
   (C)  WITH THE INPUT OF THE COMMUNITY RESTORATION FUND COUNCIL, DEVELOP
 DISPOSITION STRATEGIES TAILORED TO THE NEEDS AND  MARKET  CONDITIONS  IN
 THE LOCAL COMMUNITIES WHERE THE DISTRESSED ASSETS ARE LOCATED;
   (D)  WORK  WITH  THE  COMMUNITY  RESTORATION FUND COUNCIL TO DETERMINE
 OPTIMAL OUTCOMES FOR ACQUIRED MORTGAGE NOTES AND PROPERTIES;
   (E) HAVE A RELATIONSHIP WITH A SPECIALTY MORTGAGE SERVICER WHOSE  ROLE
 IS TO ASSIST WITH MODIFICATIONS OF ACQUIRED MORTGAGE NOTES;
   (F)  WORK  WITH  THE  FUND  MANAGER AND THE COMMUNITY RESTORATION FUND
 COUNCIL TO DEVELOP MODIFICATION CRITERIA;
   (G) WORK WITH LOAN SERVICERS AND HOUSING COUNSELORS TO ASSIST  BORROW-
 ERS WITH APPLICATIONS FOR LOAN MODIFICATIONS AND REFINANCING; AND
   (H)  WORK  WITH  THE  FUND  MANAGER AND THE COMMUNITY RESTORATION FUND
 COUNCIL TO IDENTIFY NOT-FOR-PROFIT DEVELOPERS ABLE TO IMPLEMENT DISPOSI-
 TIONS TAILORED TO LOCAL NEEDS, WHETHER SALES TO NEW HOMEOWNERS,  USE  AS
 AFFORDABLE  RENTAL  PROPERTY,  OR  DEMOLITION  AND REPURPOSING FOR OTHER
 COMMUNITY USES.
   § 4. Community restoration fund council. 1.  There  is  hereby  estab-
 lished  the  community  restoration  fund  council  consisting of thirty
 members. The purpose of such council is to serve as an advisory board to
 both the community restoration fund and the program manager, assist with
 the identification of opportunities to acquire distressed assets, assist
 in the development of disposition strategies tailored to meet the  needs
 and  market  conditions in the local communities where distressed assets
 are located, work with the program manager to determine optimal outcomes
 for acquired mortgage notes and properties, work with the  fund  manager
 and program manager to determine the loan servicer's modification crite-
 ria,  and  work  with  the  fund manager and program manager to identify
 not-for-profit developers able to  implement  dispositions  tailored  to
 local  needs,  whether sales to new homeowners, use as affordable rental
 property, or demolition and repurposing for other community uses.
   2. The members of the council shall consist of:
   a. The commissioner of the  New  York  state  department  of  economic
 development;
   b. The commissioner of New York state homes and community renewal;
   c.  Twenty-eight  community  based,  not-for-profit  members  with two
 members from each of the regional economic development regions, with the
 exception of New York city where there  will  be  two  community  based,
 not-for-profit members from each borough.
   3. No member shall receive any compensation for his or her services.

 S. 1339                             4
 
   §  5.  Annual  report to the legislature. The urban development corpo-
 ration shall submit a report to the governor, the speaker of the  assem-
 bly  and the temporary president of the senate on or before the first of
 October, and annually thereafter, describing the use  of  the  community
 restoration  fund  pursuant to this act, including asset purchases, loan
 modifications, home sales, rentals, property rehabilitations  and  other
 information  provided  pursuant  to  this  act, including: the number of
 assets purchased, number of loans modified, number of properties  rented
 and  a  description of projects financed or assisted by fund monies; the
 amount and source of funds leveraged; and such other information as  the
 state agency may deem appropriate.
   § 6. The urban development corporation is hereby authorized to promul-
 gate  rules  and regulations in accordance with the state administrative
 procedure act that are necessary to fulfill the purposes  of  this  act.
 Such rules and regulations are to be completed within one hundred eighty
 days of the effective date of this act.
   § 7. This act shall take effect immediately.

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Senate Bill S1339

Sponsored By

Archive: Last Bill Status - In Senate Committee Finance Committee

co-Sponsors

2017-S1339 (ACTIVE) - Details

2017-S1339 (ACTIVE) - Summary

2017-S1339 (ACTIVE) - Sponsor Memo

2017-S1339 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S1339

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Sponsored By

Leroy Comrie

Archive: Last Bill Status - In Senate Committee Finance Committee

co-Sponsors

Timothy M. Kennedy

2017-S1339 (ACTIVE) - Details

2017-S1339 (ACTIVE) - Summary

2017-S1339 (ACTIVE) - Sponsor Memo

2017-S1339 (ACTIVE) - Bill Text download pdf

Comments