New legislation by Senator Malcolm A. Smith may increase settlements for victims of foreclosure abuse.
“Home purchasing is the largest single investment that individuals make in their lifetime,” said Smith. “Banks committed crimes against homeowners and restitution needs to be fair. I am introducing this legislation that I believe will bring parity to my constituents in the city and state of New York. I applaud the efforts of Attorney General Eric Schneiderman to bring the banks to task for their erroneous dealings with home buyers.”
A settlement for $136 million was reached between the state and five of the nation’s most prominent mortgage service companies over perceived foreclosure abuse. According to a spokesperson from Smith’s office, this agreement includes relief for victims of wrongful foreclosure conduct and loan modifications, including “principal reductions for homeowners and funds that can be used to cornerstone foreclosure legal assistance and housing counseling programs.”
Under the attorney general’s proposed agreement, homeowners are expected to garner between $1,500 to $2,000 in retributions. Smith alleges that these amounts pale in comparison to the true monetary compensation homeowners should be given, calling them “unfair” and “insulting.”
According to Smith’s office, the proposed legislation could earn homeowners “the full amount of the down payment paid or 20 percent of the original appraised value of the qualifying residential real property.” If the eligible homeowner no longer lives in the house that was the subject of a foreclosure, they may qualify for the full amount of a down payment on new residential property.
“[Schneiderman’s effort] is the launching pad for my legislation which provides for increased financial payments to victims of the foreclosure crisis,” said Smith.