Sen. Foley Speaks on the Passage of Landmark Mortgage Foreclosure Bill
Senator Brian X. Foley (D – Blue Point) announced the passage of landmark legislation (S. 66007) that protects homeowners across New York State from the foreclosure crisis.
The bill, which Foley helped craft as Chairman of the powerful Senate Banking Committee, expands upon earlier measures passed by the Senate to help home owners. The Mortgage Foreclosure Bill adds four critical measures to protect homeowners at risk of foreclosure and to prevent similar crises from occurring in the future.
These measures include:
- Safeguarding Distressed Homeowners: Requires that lenders and mortgage servicers provide a foreclosure notice to all distressed borrowers at least 90 days before any legal action may be commenced.
- Expansion of Mandatory Settlement Conference: Expands the number of borrowers who are eligible to receive the benefit of this settlement conference to holders of all types of home loans for a period of five years. Also requires litigants to negotiate in good faith to try to reach a mutually agreeable resolution.
- Protecting Neighborhoods and Tenants: Requires a plaintiff in a mortgage foreclosure action to maintain the property in compliance with certain sections of the NYS Building code or other local housing code. If property is occupied by a tenant, it must remain in safe and habitable condition.
- Protecting Distressed Homeowners from Rescue Scams: Precludes and licensees or registrants from accepting up-front fees in connection with performing the business of distressed property consulting. Additionally, this provides a mortgage broker with three days to disclose the exact amount and methodology of total compensation that the broker will receive.
“While the foreclosure crisis has devastated communities across our state, Suffolk County has been hit particularly hard,” said Senator Brian X. Foley, pointing to the fact that Suffolk has the second highest number of foreclosures in the state, second only to Queens County. “The Mortgage Foreclosure Bill we passed in the Senate is long overdue and will serve as a critical tool in helping keep families in their homes. The legislation will make it easier for home owners to fight foreclosure, incentivize banks to pursue settlements instead of foreclosures, and take on the growing industry of scammers looking to rip-off home owners at a time when they are most vulnerable.”
"Over the past year at the Long Island Housing Partnership, our counselors have seen over one thousand families in various stages of the foreclosure process,” said Peter Elkowitz, President & CEO of the Long Island Housing Partnership (LIHP). “Senator Foley's bill addresses many of the issues that make foreclosures so difficult to resolve for families and communities and we applaud this major legislative initiative."
Passage of this crucial is part of Senator Foley’s comprehensive efforts to tackle the foreclosure crisis in Suffolk County.
Earlier this year, Foley announced a $50,000 grant to establish a mortgage foreclosure law clinic at Touro Law Center in Central Islip. The clinic at Touro Law Center will serve residents from Central Islip and Brentwood – two of the communities hardest hit by the foreclosure crisis – and the surrounding communities of Suffolk County. The clinic will pair exceptional law students specializing in foreclosure and bankruptcy law with faculty supervisors who will offer free-of-charge legal services to local residents. Clients for the law clinic will include home owners in danger of losing their homes, individuals filing for bankruptcy, and people who have received notices from their bank.
Last weekend, Foley hosted a foreclosure prevention event where home owners were afforded an opportunity to meet one-on-one with their banks and mortgage servicers in an effort to settle loan modification plans. Over 300 constituents and a plethora of banks and mortgage servicers attended the event.
“Helping families deal with the foreclosure crisis will not only help local communities, it will help the entire state turn the corner on the economic recession,” said Foley who was tapped to be Chairman of the Senate Banking Committee in his very first year in the state senate.
New York State’s housing market continues to be hammered by the foreclosure crisis. A staggering 58,000 outstanding mortgage loans in New York entered some form of delinquency in September 2009. Over the next four years, over 230,000 additional homes are expected to be lost to foreclosures, costing the state’s economy over $4 billion.
New York State’s housing market has suffered a particularly severe fallout in the wake of the housing crisis in the U.S., with over 50,000 new foreclosure filings in 2008 alone, a 30 percent increase over the preceding year.