New state law mandates more foreclosure notice

New state law mandates more foreclosure notice
Help is on its way from Albany for homeowners in areas like southeast Queens who are at risk of foreclosure.
By Ivan Pereira

In the wake of news that foreclosures have declined across the state over the last year, the governor announced the passage of a new bill that will protect helpless homeowners who are facing the loss of their homes.

The Governor’s Program Bill No. 46, which was passed in the state Legislature Nov. 16, forces lenders to engage their borrowers in better communication before their homes go into foreclosure. The bill expands on the legislation created by Gov. David Paterson last year to crack down on the subprime loan crisis that has devastated numerous communities in the state, including southeast Queens, which leads in the number of foreclosures.

“This legislation protects New York neighborhoods from the decay caused by foreclosure by reducing the erosion of area property values and by preventing vacant homes from becoming sites of criminal activity,” Paterson said in a statement.

Under the bill’s rules, a pre-foreclosure notice will be sent out 90 days in advance to give homeowners more time to work out their problems, according to the governor. The lenders who serve that notice must make a mandatory filing with the state Banking Department so the state agency and other groups can provide pre-foreclosure assistance early, Paterson said.

The governor touted his office’s work to curb the foreclosure meltdown, saying his earlier bills had been effective in saving homes.

There was an 11 percent decrease statewide in the number of foreclosures during the year, with nearly 40,000 filings during the first three quarters of 2009 compared to nearly 45,000 during the same period last year, Paterson said. Southeast Queens neighborhoods such as St. Albans, Springfield Gardens and Jamaica have the highest foreclosure rate in the state.

The state superintendent of banks, Richard H. Neiman, said that despite the drop in foreclosures, the legislation was needed since homeowners have been struggling due to the current economic crisis.

“While the foreclosure crisis began with borrowers in inappropriate subprime or exotic mortgages, the recession has expanded the impact of this crisis to homeowners with loans that were originally affordable,” he said in a statement.

Reach reporter Ivan Pereira by e-mail at [email protected] or by phone at 718-229-0300, Ext. 146.

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