Queens Tribune

New York State Assembly members Friday announced legislation, including $180 million in funds, aimed at bringing relief to borrowers affected by the subprime lending crisis, which has affected Queens worse than any other county in the state and particularly hurts those on fixed incomes.

The legislation, which has yet to be approved by the State Senate and the Governor, would provide $150 million in direct funds to New York State homeowners affected by the crisis, as well as $30 million for counseling and legal services. Assembly Speaker Sheldon Silver (D-Manhattan) stressed the measure is intended to help subprime borrowers stay in their homes and not to bail out predatory lenders who have operated in the worst interests of homeowners.

“Time is of the essence,” Silver told reporters at Manhattan’s City Hall. “New Yorkers are losing their homes. There is no time to wait.”
The goal of the legislation is “to keep New Yorkers in their homes; to keep New Yorkers in their communities,” Silver noted.

He also said it was “callous” for predatory lenders to put people in the position of losing their homes.
The $150 million would be expected to help as many as 50,000 people who are defaulting on their loans, Silver said. Grants would be given to borrowers in owner-occupied homes who are working with their lenders in modifying their loans. Lenders would also be required to help in alleviating borrowers’ debt.

Additionally, the legislation includes the Responsible Lending Act of 2008 to help prevent future crises. The bill would seek to eliminate predatory lending abuses such as lending without regard to whether a person can afford payments and accurate real estate appraisals. The New York State Banking Department would also be required to heavily monitor the mortgage industry.

“People who are in this business should understand who is likely to pay,” Silver said. “‘Buyer beware’ – that’s not our philosophy.”

Assembly Banking Committee Chair Darryl Towns (D-Brooklyn) stressed it was important for the Assembly to address subprime lending in the state.

“Homeownership because of this crisis is becoming a nightmare,” Towns said. “It’s a tremendous day and a tremendous opportunity for New York to blaze a trail throughout the country” in addressing the crisis.
In dealing with the City, Silver noted “Queens has the largest number of potential foreclosures than any other county in the state.”

Assemblyman Rory Lancman (D-Fresh Meadows) added that the legislation would be a great assistance to Queens homeowners.

In the borough, nearly 2,500 homes were foreclosed in 2007 and another 3,500 foreclosures are expected in 2008. Throughout the City, 2008 will bring an estimated 15,000 foreclosures.

Lancman said the legislation would help ensure the mortgage broker “act in the best interest of the borrower.”