New Yorkers for Responsible Lending, a state coalition of 122 groups, praised New York State Governor George Pataki for signing into law yesterday the Home Equity Theft Prevention Act, which protects vulnerable homeowners from "foreclosure rescue" scams.
The bill, introduced in response to the alarming rise in home equity theft across New York State, reached the Governor’s desk after it was unanimously passed by both the Senate and Assembly.
"AARP commends the Governor for his leadership, Senator Hugh Farley (R, C - Schenectady) and Assemblyman Darryl Towns for their dedication, and the New York State Banking Department for working to protect what is many New Yorkers’ most valuable asset – their homes," said Lois Aronstein, AARP New York State Director.
"I was pleased to sponsor this important consumer protection bill," said Senator Farley. "We have seen an increasing number of cases in which scam artists take advantage of desperate homeowners. While they promise to help the family save their home, they actually engage in abusive practices which drain the equity from the home and leave the homeowner in even worse shape. By providing new statutory protections, this law will help eliminate these abuses and will help ensure that homeowners are treated fairly."
The Home Equity Theft Prevention Act requires written disclosure to homeowners regarding the terms of a title transfer that occurs when a home is in foreclosure, and provides the right to cancel the deal for five days after signing the contract. It prohibits making false statements with intent to defraud the homeowner and provides for a consumer education notice to be sent to all homeowners in foreclosure warning them about such scams.. The legislation establishes civil and criminal penalties for violating the law.
"I am so thankful to the New York State Legislature and Governor for cracking down on these criminals who steal people’s homes. No one else should have to go through this," said Michell Fayez Olabi, a mother of seven, who is fighting to get back the home she lost in the Rosedale section of Queens to a foreclosure rescue scam.
"This new law provides crucial protections for vulnerable homeowners from foreclosure rescue scams, which have become epidemic in New York," said Josh Zinner, Director of South Brooklyn Legal Services’ Foreclosure Prevention Project. "This law will prevent unscrupulous speculators from stealing millions of dollars in homeowners’ hard-earned equity."
"This is, without a doubt, a victory for the New Yorkers for Responsible Lending coalition, which has been at the forefront of exposing these abusive practices," said Sarah Ludwig, Director of the Neighborhood Economic Development Advocacy Project in New York City. "More important, this is a tremendous victory for seniors and other vulnerable homeowners who have built up precious equity in their homes."
"New Yorkers can be proud of the fact that we have some of the toughest anti-predatory lending and deed theft laws in the country," said Kirsten Keefe, Staff Attorney with the Empire Justice Center, in Albany. "Foreclosure rescue scams are a huge problem all over New York State, and this new law will curb these abuses."