STATEN ISLAND, N.Y. -- Two Staten Island lawmakers who've taken the lead in addressing the subprime lending mess were on hand for the signing of a bill aimed at helping homeowners in foreclosure.
The measure, passed by the state legislature in June and inked into law yesterday by Gov. David Paterson, would give homeowners who have subprime loans an additional 90 days to try to stave off foreclosure.
Statewide, foreclosures are up 14 percent over last year, with more than 2,000 homes in jeopardy here, lawmakers said.
The bill, supported by Assemblyman Lou Tobacco (R-South Shore) and state Sen. Diane Savino (D-North Shore/Brooklyn), who joined Paterson at the bill-signing in Queens, would add a 90-day "grace period" to the typical 440-day foreclosure process, already the longest in the country.
Lenders now will be required to send "pre-foreclosure" notices 90 days prior to commencing foreclosure proceedings, thereby giving borrowers additional time to meet with lenders, as well as seek information through government-approved housing counselors on how to deal with their debt.
The law also addresses "rescue scams" designed to appeal to vulnerable homeowners. It also makes lending rules more stringent in an attempt to avoid future problems, and classifies mortgage fraud as a crime.
"This makes the kind of thing that has occurred a crime, where people who dreamed of owning a home were preyed on, scammed and conned," said Tobacco. "These reforms go to great lengths to prevent a future crises in the home-lending arena."
Ms. Savino called the bill consumer-driven and said it "offers homeowners direct relief."
She said even a few foreclosures have a "ripple effect," by lowering neighborhood property values and affecting the local economy.
Earlier this year, Ms. Savino and Tobacco sponsored a forum on foreclosure and heard from Island homeowners who said they were victims of predatory lenders.
Said Paterson: "We have a responsibility to protect New York's families who are facing foreclosure, and we need to reform banking regulations to ensure this does not happen again."
An estimated 50,000 homeowners statewide have been hit with foreclosures so far this year, with as many as 38,000 more in the offing by year's end, experts predict.