Law Will Help Save Thousands of New Yorkers from Losing Their Homes to Foreclosure;
Reforms Will Help to Prevent a Similar Crisis in the Future

Governor Paterson Commends Federal Government for Following New York’s Lead and Taking Additional Action

Governor David A. Paterson today signed into law a critical subprime lending reform bill which directly addresses the mortgage crisis in New York State. The Governor signed the bill in Queens, one of the areas in New York that has been hit hardest by the foreclosure crisis. The new law will immediately help protect people from losing their homes and mandates reforms to help avoid a similar crisis in the future. The bill also takes into consideration the importance of striking the right balance between consumer protection and the availability of affordable credit.

This bill – a Governor’s Program Bill (S.8143-A/A.10817-A) passed by the state Legislature in June – works in two ways: immediately helping to prevent New Yorkers from losing their homes by assisting those who are currently facing foreclosure, and by attacking flaws in New York’s banking regulations to prevent such a crisis from happening again. It also served as a model for recent federal action as well.

“We have still seen thousands of our families lose their homes, and no state has been hit harder by the broader effects of the lending crisis. Wall Street’s woes have helped to drive New York into recession,” said Governor Paterson. “We have the responsibility to protect New York’s families who are facing foreclosure, and we need to reform banking regulations to ensure this does not happen again. This law does both, and spurred the federal government to do the same.”

New York’s Congressional Delegation pushed the issue in Washington, and late last month, President Bush signed the Housing and Economic Recovery Act of 2008 to help at-risk borrowers keep their homes by refinancing their mortgages into safe and more affordable government-insured mortgages. The measure also provides funds for New York State and its localities to purchase and renovate foreclosed properties in our most impacted areas. This initiative will help New York stabilize at-risk communities endangered by abandoned, foreclosed homes.

Data from the New York State Banking Department shows that approximately one in 200 New York homes is in the foreclosure process. Some areas of New York – such as Queens, Brooklyn and Long Island, and in Upstate New York, Monroe and Albany counties – are being disproportionately impacted