Governor David A. Paterson and Legislative leaders announced today that the Enacted Budget includes $25 million to help save thousands of homeowners from foreclosure. The Subprime Foreclosure Prevention Services Program includes grants and aid to non-profits to provide financial counseling, mediation, legal representation, negotiation, and other support services to borrowers who face default or foreclosure.
“It’s estimated that up to 50,000 New York families could lose their homes to foreclosure by the end of this year,” said Governor Paterson. “This program will help reverse this trend and allow a great many senior citizens and families who’ve been targeted by subprime lenders to hold on to their homes. I want to thank the State Legislature for its leadership in addressing this crisis and putting forward a thoughtful plan in the budget.”
The Subprime Foreclosure Prevention Services program will be developed and administered by the Division of Housing and Community Renewal (DHCR), in consultation with the Banking Department, and the Office of Court Administration.
Overall, it is estimated that 20 percent of subprime loans will end in foreclosure and over 50 percent of all foreclosure filings are on subprime loans. According to RealtyTrac, in 2007 there were 57,350 foreclosure filings in New York State, representing a 55 percent increase over 2005. These filings affected nearly 39,000, which equates to one in every 200 homes in New York State.
Senate Majority Leader Joseph L. Bruno said: “The subprime mortgage issue is a very serious matter facing thousands of New York families. This funding in the budget will help protect many homeowners from foreclosure. Senator Hugh Farley has done outstanding work as Chairman of the Senate Banking Committee, proposing measures to target unscrupulous lenders, strengthen accountability and protect homeowners. These budget funds agreed on by the Governor, Senate and Assembly will work well with the legislative steps we have taken to address the subprime issue.”
Assembly Speaker Sheldon Silver said: “With each passing month we hear more and more about the strain so many homeowners experience as a result of disastrous sub-prime lending. In this budget, the Assembly Majority will provide much-needed assistance to those who face losing their most important investment, a home. With the help of dedicated professionals, it is our hope that we can help families keep their dreams of homeownership alive.”
Senate Minority Leader Malcolm A. Smith said: “The national housing crisis that has caused tens of thousands of New Yorkers to be at risk of losing their homes will be able to seek relief and hopefully save their homes through the far-reaching and thorough solutions found in the 2008-09 budget. With the $25 million allocated in this budget, homeowners struggling to avoid foreclosure, through no fault of their own, will now be able to have access to a variety of services dedicated to eradicating this debacle, including educational counseling programs and legal services. I want to thank Governor David Paterson and my colleague Senate Minority Deputy Leader Jeffrey Klein for their tireless efforts tackling this issue. As this mortgage debacle is reaching critical proportions across the state, it is my hope and desire that we will never see a housing crisis of this magnitude again.”
Senator Hugh T. Farley, Chairman of the Senate Banks Committee, said: “Over the years, New York has taken several steps to address abusive practices in the mortgage industry, and we are currently working on additional measures. This new initiative will provide counseling and legal aid organizations with the necessary resources to assist and guide homeowners who are struggling with subprime loans, thereby helping these families to avoid foreclosure and stay in their homes.”
Assemblyman Darryl Towns, Chairman of Assembly Banks Committee, said: “The Assembly understands that for homeowners facing foreclosure, the best chance to save their house is committed financial and legal help. With this budget, the Assembly assists those affected by sub-prime lending to navigate a desperate and confusing terrain and keep the homes they have worked so hard for.”
Assemblyman Vito Lopez, Chairman of the Assembly Housing Committee, said: “The assistance this budget provides to sub-prime lending victims is an important step in addressing what has become a national crisis. Helping families in our towns, villages and cities keep the homes they’ve worked hard for is an obligation of the Assembly Majority as we deal with the fallout of the unethical practices of the mortgage industry.”
Deborah VanAmerongen, Commissioner of the Division of Housing and Community Renewal, said: “We are eager to collaborate with community non-profits to make this program work and provide peace of mind for the thousands of homeowners at risk.”
Richard H. Neiman, New York Superintendent of Banks, said: “We have seen through our outreach efforts and foreclosure prevention forums the critical role played by counseling and legal agencies and the resource challenges they face. This new funding will help to close that gap by providing needed support for New York families.”
