New HALT Report Shows New York Leader in Addressing Foreclosure Crisis
New Report Highlights State's Award of Over $23 Million in Grants to Groups Preventing Foreclosures
State Continues to Coordinate Efforts to Develop Long-Term Solutions
January 15, 2009
Governor David A. Paterson today accepted the report from the Interagency Task Force to Halt Abusive Lending Transactions (HALT). The report evaluates how the devastating housing market has affected New York’s homeowners and describes the State’s comprehensive approach to the foreclosure crisis. The report was presented by Superintendent of Banks and HALT Task Force chair Richard H. Neiman and Division of Housing and Community Renewal Commissioner (DHCR) Deborah VanAmerongen.
“The foreclosure crisis continues to overwhelm New York’s homeowners and housing market, demanding an effective response from our State and nation,” said Governor Paterson. “The report from the Interagency Task Force to Halt Abusive Lending Transactions outlines the steps New York has taken and demonstrates how an aggressive, coordinated response can help save homes. Our State’s achievements are a model for a more integrated national foreclosure prevention strategy.”
As of the third quarter of 2008, almost 45,000 New York homes were in foreclosure, a 43 percent increase over 2007. The HALT report details the State’s responses to this trend, including: the development of agency-administered grant programs, which awarded over $23.8 million in 2008 to nearly 90 non-profit groups that provide foreclosure prevention assistance; and the passage of legislative reforms, such as the Governor’s subprime legislation, which extends protections to more homeowners and establishes regulations to prevent future crises.
Superintendent Neiman said: “There is no single solution to the complex foreclosure problem. That is why we have adopted a continuum approach, to reach borrowers with assistance targeted to every stage of need- from the time they first experience payment difficulty through the court process. I am particularly hopeful that the increased opportunities for consumer counseling provided for by New York’s multiple grant programs will help many more families keep their homes.”
Commissioner VanAmerongen said: “Thanks to the efforts and commitment of Governor Paterson and the State Legislature, New York has been a national leader in addressing the foreclosure crisis that has hurt so many families and communities in our State. The grants we have awarded in the last five months will help thousands of families facing foreclosure to get the information and counseling they need to keep their homes.”
“I would also like to thank members of the Senate and Assembly for partnering with the Banking Department and other HALT Task Force agencies in Operation Protect Your Home, a campaign which contacted tens of thousands of borrowers across the State,” noted Governor Paterson. “This program offered homeowners an opportunity to meet with mortgage servicers and non-profit counselors to find foreclosure alternatives. Operation Protect Your Home provided critical options and information for borrowers at-risk, including steps to protect themselves from fraudulent mortgage rescue schemes.”
Since May 2008, when the HALT Task Force issued its last report, the subprime crisis has worsened and continues to undermine the stability of the national financial system.
The updated report concludes that a comprehensive approach to these issues, from pre-foreclosure proceedings to the treatment of bank-owned properties and abandoned homes, is key to the development of long-term solutions. The HALT Task Force has led New York in the coordination of foreclosure assistance and prevention efforts.
New York expanded on its anti-predatory regulations of 2000 with the passage of the Governor’s subprime legislation in June 2008. The reforms protected more subprime borrowers, instituted progressive changes to the foreclosure legal process, and built on New York’s solid consumer protection foundation. This legislation can serve as a model for developing minimum national standards for mortgage lending.
Data Collection and Analysis
New York completed a comprehensive analysis of the State mortgage market and used the data to develop foreclosure prevention policies and programs.
Grants for Foreclosure Prevention Services
Various State agencies developed and administered programs to grant funds to non-profit that provide homeowners with foreclosure prevention assistance. As of December 2008, over $23.8 million has been awarded to approximately 90 non-profits across the State.
A number of programs are committed to outreach and education. Operation Protect Your Home launched a series of foreclosure prevention forums across the State that invited nearly 36,000 New York homeowners to participate. The Banking Department launched a public service announcement campaign encouraging borrowers to contact Department officials for direct information as well as referral assistance. The State of New York Mortgage Agency’s Neighborhood Stabilization Initiative established a loan program with preferential terms for eligible consumers who purchased certain previously foreclosed homes in target areas.
New York is one of the first states to participate in the National Mortgage Licensing System, a multi-state project to register individual loan originators.
The full December 2008 HALT report is available on the New York State Banking Department’s Web site at http://www.banking.state.ny.us.pr081231.pdf.
In addition to the findings, the report expands on a previous response to the 2008-09 State Budget, which required the Housing Trust Fund Corporation, in consultation with DHCR, the Banking Department, and the Office of Court Administration, to provide a catalog of all funds allocated for subprime foreclosure prevention services. The list details total funds awarded to grant recipients, the services to be provided, the number of person or households to be served, and the number of persons not served. The report also reviews: the cases and causes of mortgage defaults in the state; the rate of foreclosures, the need for direct assistance to homeowners; and homeowners’ ability to successfully comply with their mortgage terms or negotiate changes to their contracts in order to remain in their homes.
Background on Interagency Task Force to Halt Abusive Lending Transactions (HALT)The HALT Task Force was formed in March 2007 and is comprised of members of the Governor’s Executive Chamber, the New York State Banking Department, the Department of State, the State of New York Mortgage Agency, the Division of Human Rights, the Consumer Protection Board, the Governor’s Office of Regulatory Reform and Division of Housing and Community Renewal.