NY lawmakers look to deter banks from foreclosing on homeowners

August 25, 2010 10:00AM

From left: State Sen. Jeff Klein, City Council member Brad Lander

A pair of New York lawmakers is expected to announce proposals today that would pile on the pressure for lenders to dole out mortgage modifications quickly to underwater homeowners, the Wall Street Journal reported. Among the legislative measures that State Sen. Jeff Klein and Brooklyn City Council member Brad Lander are set to announce is a $100-a-day fine for banks that fail to maintain foreclosed properties. They’re also proposing that lenders be required to post a bond for each property in their portfolio that is vacant due to foreclosure. While New York City is second in the country in mortgage modification activity, only 6.1 percent of eligible borrowers here have actually received modifications through the federal government’s Making Home Affordable loan modification program. “Lending insittutions aren’t taking this seriously enough,” Klein said. He hopes the new requirements would act as a foreclosure deterrent that would make banks “more willing to modify mortgages and keep people in their homes.” [WSJ]