New York passes foreclosure protection bill

November 17, 2009 05:22PM

Governor David Paterson and the New York State Legislature have passed a bill that will provide additional protection to New York state homeowners and renters facing foreclosure. The bill will expand the mandatory 90-day grace period to holders of all types of home loans, not just subprime mortgages, so more homeowners will have a grace period to address their situation before facing foreclosure. The bill will also help distressed renters, allowing them to remain in their apartments for the remainder of their lease, or 90 days, whichever is longer, before receiving an official foreclosure notice. The bill also protects vulnerable homeowners by prohibiting brokers who offer distressed property consulting services from accepting any payment upfront, in order to avoid fraud. Lastly, the bill will allow the Banking Department and the Division of Housing and Community Renewal to find and correctly identify all residents facing foreclosure. This legislation comes at the same time as the news of Federal Deposit Insurance Corp’s massive real estate sales so far this year — the most since 1996, according to the group’s Web site. Bloomberg reports that the jump in the FDIC’s sales numbers is due to its takeover of more properties from failed lenders. The agency has sold 1,706 properties so far this year, compared with the entirety of 1996, when the FDIC sold 2,045. [Crain’s] and