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NY State Leaders Address Home Foreclosure Crisis Governor Eliot Spitzer recently met with Attorney General Andrew Cuomo and members of the Governor's Halt Abusive Lending Transactions (HALT) Task Force to address the sub-prime and foreclosure crisis in New York. The Governor and Attorney General an-nounced key initiatives their respective offices are taking to address the rising rate of foreclosures, assist homeowners currently facing delinquency or foreclosure, and reduce the risk of future sub-prime lending. The initiatives are as follows: • A $2 million matching grant program has been created to provide financial support for counseling groups and legal aid societies assisting homeowners facing delinquency or foreclosure. The availability of trained mortgage counselors is an important element in supporting and educating New Yorkers. The grant money, which will match private grants, will help ensure that community groups have the resources, tools and training needed to deal with the higher case loads. The funds are being allocated from settlement funds recouped from prior enforcement actions by the Banking Department. • Legislative Proposal - The governor has directed his staff to work with the Legislature, consumer advocates and the lending industry to develop legislation to address subprime lending and related home mortgage issues. Spitzer also highlighted a number of key initiatives undertaken by the HALT Task Force: • SONYMA has launched the $100 million 'Keep the Dream' program, a refinance program for eligible subprime borrowers facing mortgage hardship, as well as a new forty-year fixed rate mortgage product for first-time homebuyers. SONYMA has also dedicated $250,000 to counseling groups providing counseling services for the 'Keep the Dream' program and DHCR awarded grants of $388,000 for nonprofits counseling services across the state. • Banking Law 6-l was updated to raise the loan limits to Fannie Mae and Freddie Mae conforming limits, which expanded the number of borrowers protected under the law. This change was especially relevant to homeowners in downstate where home prices are higher. The Banking Department also issued regulatory guidance covering underwriting standards, workout arrangements, management practices, and consumer protection provisions that mortgage originators are encouraged to follow when marketing and selling certain non-traditional and subprime mortgage products. The announcement was met with broad approval by legislative officials as well as consumer advocates.
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