Governor David A. Paterson recently announced measures his administration is proposing to address the foeclosure crisis.

Primary elements include: 

• Mandatory Pre-foreclosure Notice: As a result of too little direct communication between borrowers and lenders, many New Yorkers are losing their homes when there could have been other options available. The proposed bill requires lenders to send pre-foreclosure notices to homeowners at least 60 days before initiating foreclosure proceedings. If the borrower engages a housing counselor or reaches out to the lender to negotiate a resolution, the lender will be precluded from initiating a foreclosure action against the borrower for 60 days.
• Mandatory Settlement Conferences: Requires borrowers and lenders to participate in settlement conferences at the beginning of the foreclosure process, and gives the court the ability to assign counsel to negotiate in the conference on behalf of the borrower. Affirmative Allegation of Ownership: The bill clarifies the requirement of the plaintiff in an action against homeowners to make an affirmative allegation that the plaintiff holds the mortgage note. Sometimes ownership status is uncertain, leading to questionable foreclosure practices.
• Foreclosure Rescue Scams: The bill would enact tough measures to help prevent distressed homeowners from falling prey to rescue scams. Prohibits payments prior to the performance of promised services to individuals claiming that they can save a borrowers home. 
• Expansion of Consumer Protections: Expands New York State’s Anti-Predatory Lending Law to protect a greater number of borrowers. In addition to expanding the current threshold to include loans up to $750,000, non-conventional loans will be protected by the provisions.
• Establish an “Ability to Pay Standard” for making and arranging all home loans, regardless of the principal amount.
• Duty of Care: Requires lenders, when making a lending decision, to ensure the borrowers reasonable ability to repay and clearly outlines the responsibilities of the broker to act on behalf of the borrower.
• Registration of Servicers: Requires all mortgage servicers servicing loans on residential property in New York State to be registered with the Banking Department.
• Residential Mortgage Fraud: Clarifies mortgage fraud as a crime under Penal Law.

To view the Press Release in its entirety, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 500 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.