Governor Paterson, Senate Majority Leader Bruno, and Assembly Speaker Silver Agreement on Subprime Will Help Thousands in Foreclosure

Statement by Lois Aronstein, AARP NYS Director

Jun 20, 2008, 01:00 ET from AARP New York State

    ALBANY, N.Y., June 20 /PRNewswire-USNewswire/ -- AARP commends the
 Governor and the Legislature for reaching an agreement on legislation to
 address the housing foreclosure crisis in New York State. With over 1,100
 foreclose filings a month in New York, the relief this legislation will
 provide is greatly needed.
     The foreclosure crisis has hit the subprime marketplace the hardest,
 where many low- to moderate-income people as well as older adults have
 obtained their mortgages. Borrowers age 65 or older are 3 times more likely
 to hold a subprime mortgage than borrowers less than 35 years of age.
     According to public statements by our state leaders, the agreed-upon
 bill will require lenders to send pre-foreclosure notices to borrowers at
 least 90 days before foreclosure proceedings begin and will require
 mandatory settlement conferences for foreclosure proceedings.
     The legislation will allow borrowers time to seek help from a list of
 government approved housing counselors. The remedies in this legislation
 will work in conjunction with the $25 million the Governor and Legislature
 recently approved in the state budget to increase funding for housing
 counsels and legal assistance.
     The proposed law will also help keep a similar foreclosure crisis from
 happening again by ensuring sound lending in the suprime marketplace by
 requiring lenders to verify a borrower's ability to repay a loan. This will
 require lenders to make a reasonable and good faith determination of the
 borrower's ability to repay the loan, including the principal, interest,
 taxes, insurance, assessments, points, and fees.
     The agreed-to bill also requires brokers to act in the borrower's
 interest by recommending loan products that would be appropriate to the
 borrower. Additionally, this legislation will make mortgage fraud a crime.
     The proposal as it currently stands will not apply to those individuals
 now saddled with bad loans in the subprime market place. These loans will
 undoubtedly lead borrowers, especially those with adjustable rate
 mortgages, down the road to foreclosure.
     AARP strongly believes that the overall agreed-to bill will help those
 currently in foreclosure and will save thousands of New Yorkers from losing
 their homes, which for most is their single biggest asset. All New Yorkers
 should applaud the Governor, Senate Majority Bruno, and Assembly Speaker
 Silver for their sound leadership and working to achieve this historic
 agreement to address the foreclosure crisis.

SOURCE AARP New York State