NY Foreclosure Legislation Expected To Pass Today; Will Establish Court Supervised Mediation Conference; Proposed 1-Year Foreclosure Moratorium Dumped

In New York, The New York Times reports:

• The bill that Gov. David A. Paterson and leaders of the State Legislature announced last week to address the subprime lending and foreclosure crisis was, for Albany, that rarest of things — an effective compromise. The legislation will change how subprime loans are made and regulated and will alter the way many foreclosures are handled by the courts, establishing protections for homeowners that had not been in place.

***

• Two of the main provisions are firsts for New York State: One requires lenders to warn borrowers in writing at least 90 days before starting foreclosure proceedings, and the other requires the courts to hold a settlement conference between the lender and a subprime borrower facing foreclosure. Both provisions are aimed at bringing lenders and borrowers together before foreclosure becomes inevitable. Supporters say the measures increase the chances of settlements that modify the terms of the loans, prevent foreclosures and allow homeowners to stay in their homes.

For more, see In Confronting the Foreclosure Crisis, a Bill Strikes a Balance.

For a formal description of a statewide program announced last week by the New York Court of Appeals intended to educate homeowners and facilitate early foreclosure negotiations and settlements, see Residential Mortgage Foreclosures: Promoting Early Court Intervention.